Commonwealth opportunity to create their own market. Net exporters,

Topic: EconomicsConsumer Science
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Last updated: November 13, 2019

Commonwealth of Independent States is a community of states which was established with the signing of the Declaration no. 142-N of the Soviet of the Republics of the Supreme Soviet of the USSR by the Russian Federation, Ukraine and Belarus in December, 1991.The dissolution of Soviet Union had significant implications for energy trade in the region. After the establishment of geographical frontiers five of the countries became net energy exporters while couple of others were highly dependent on other providers for energy. The net exporters discovered that neighboring countries took control of their pipeline access to regional and European markets. After this incident, the governments established an alliance in which they tried to take advantage of the extraction of rents through limiting access to transit pipelines.

Meanwhile the lack of connection between Western and world market eliminated the necessity for net exporters to do trade in Western standards and provided them with an opportunity to create their own market. Net exporters, which were used to very low energy prices, had faced with enormous terms of trade shocks.The debt of energy trade payments has risen dramatically, especially in exporting countries, and the difficulty they had while clearing the debt caused a massive external debt problem.

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Between importing and exporting countries, different payment methods like various forms of barter had surfaced. Cross-border energy trade has become an issue which occurred continuously and that is one of the main reasons which caused disunity in energy trade. There is a broad consensus within the international financial institutions (IFIs) on the nature of energy sector problems in the CIS countries and on appropriate reform strategies. By international standards, energy intensity levels in the CIS remain extremely high, notably among the region’s net energy exporters, but also in some energy-deficit countries, such as Belarus and Ukraine. The slow progress towards the efficient usage of energy for both industrial and household, often reflects continued (mostly indirect) subsidization of domestic energy prices and the incomplete restructuring of major state which Supreme Soviet announced that the Soviet Union had ceased to exist as a state. The origins of the dissolution of the Soviet Union can be traced back to the election of Mikhail Gorbachev as General Secretary of the Communist Party of the Soviet Union March 11, 1985.

He took the office intending to revive USSR’s economy, to accomplish his goals he had made reforms; infamously the twin policies of Glasnost (openness) and Perestroika (restructuring) created profound changes in economic practice, internal affairs and international relations. The Glasnost, which accelerates the reversal of the reform process and the disintegration of the state reveals the fact that the theory of adverse reaction in history and sociological bases should be examined further among the astonishing views of those who support these periods. The rationale for the government party of the Soviet Union, which was tending towards innovations, has not gone beyond the idea of expanding political considerations, which are seen as a source of blockages in the economic and armed struggle, especially in the imperialist countries. Afterwards, it turned out that the Soviet’s disinclination to find viable solutions has caused problems for the working class and the lack of effort to improve their thoughts and lives has shown that the government never really took an action. Gorbachev tried to preserve the integrity of state by liberating economy as socialism in USSR ceased to function, on the contrary, he has led to the disintegration of the state.Broadly, the reforms that he made were mostly about redeeming the state mechanism from its unwieldiness. Giving autonomous authorizations to inefficient government agencies and businesses, them creating their own production plan, the focus on a profit-oriented production like in the capitalist system instead of shutting budget deficits, the use of resources on raising economic welfare, the usage of sources  on increasement of economic welfare levels instead of arms race and thus signing non proliferation of arms treaties with the US are some of the main developments caused by the Perestroika Principle.One of the main reasons on the failure of Perestroika was during Gorbachev’s six years in power, he introduced at least 10 programs for the “radical restructuring” of the Soviet Economy which were never implemented.

Instead, economic reforms were limited to uncoordinated and vague measures. This increased the pressure on Gorbachev to grant autonomy for Republic’s within the Soviet Union. A failed coup by hard-line members of government who wanted to oust Gorbachev and reverse his forms.The 1991 Soviet coup d’etat attempt, was organized by the hard-line members of government officials, also known as Nomenklura which is was a group of people within the Soviet Union and Eastern Bloc countries. Although the coup lasted only two days, Gorbachev returned to the office, the incident damaged the stability of the Soviet Union and is believed to have contributed to both the abolishing of the CPSU and the dissolution of the USSR.

With some having already declared their independence from the USSR, ten republics did so between August and December as it soon became obvious that USSR was falling apart on December 25. Gorbachev resigned as the president of Soviet Union and the Declaration no. 142-N of the Soviet of the Republics of the Supreme Soviet of the USSR was signed.With this treaty, Soviet Union was officially abolished and on December 21, 1991 former Soviet Republics have also signed this treaty with the exceptions of Estonia, Latvia, Lithuania, Georgia and Ukraine. The treaty includes the official declaration of Dissolution of the Soviet Union and creation of CIS.

The declaration recognized former Soviet Republics’ sovereignty, even though five of the signatories namely Uzbekistan, Armenia, Azerbaijan, Kyrgyzstan and Moldova ratified it much later and some of the former Soviet Republics didn’t ratify the declaration at all. Both Turkmenistan and Ukraine withdrew their full membership, in 2005 and in 2014, respectively; Ukraine’s reason being the invasion of Crimea.

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