Dr.Roza Sarbayeva
Al-Farabi Kazakh
National University
The purpose of this research paper is to identify the main stages of development of integration processes in Eurasia. It explores the history of the emergence and development of the Eurasian idea of the President of Kazakhstan N. Nazarbayev, the factors of Eurasian integration, the prospect of creating the Eurasian Union, the relationship of leaders of three states to the idea of Eurasian integration, the possibility of expanding range of participants of the Eurasian project, as well as some theoretical and practical aspects of the acceleration the integration processes. The problems of customs relations were considered. This paper presents a wide range of existing official positions and expert opinions reflecting fundamental unity and well-known differences in the approaches to understanding the nature and purposes, the pace and consequences of Eurasian integration. The author introduces us with the main document – Eurasian Economic Integration Declaration which notes that the further development of the integration of three countries meet their national interests, help reach common objectives to improve the well-being and quality of life, promote sustainable socio-economic development, facilitate all-round modernization and strengthen national competitiveness in the global economy, as well as answers the questions: “What impact have the post-soviet integration processes on the economies of the countries of Customs Union?”, “What are the advantages and disadvantages of CU?”, “What factors hindering integration processes in Eurasia in contemporary world?”.
Introduction
Kazakhstan has always played significant role in many integration projects and processes in Eurasia. Kazakhstan has organized the World Traditional Religious Leaders Congresses, OSCE Summit in Astana; chaired in it in 2010, chaired Organization of Islamic cooperation, Organization of Shanghai Cooperation and CICA; held Turkic summits; and initiated Customs Union, CIS, Eurasian Economic Union. Even, the idea of creating of Eurasian Union undoubtedly belongs to the President of Kazakhstan.
At the beginning of the 90s, after the Soviet Union collapse, President of the Republic of Kazakhstan Nursultan Nazarbayev started promoting initiatives on the Eurasian integration, despite the changing political environment. The older generation remembers well the crisis of the former USSR republics after the superpower’s demise, the imminent threats of inter-ethnic and inter-religious clashes, when all the emerging nations were on the brink of survival. At that dramatic time in 1994 President of Kazakhstan delivered his address at the Moscow State University about the idea of forming the Eurasian Union. At that time our President also faced difficult tasks: to preserve the unity and integrity of the country, to improve the economy and prevent ethnic and social conflicts. All these tasks were successfully fulfilled. Our President’s integration initiatives are under successful realization now. Time has proved the vitality of the idea of Eurasian integration. This significant integration project of the Eurasian Union, voiced by N.Nazarbayev in 1994, laid the foundation for the development of all integration processes on the post-soviet space, establishment of the Eurasian Economic Community (EurAsEC), the Customs Union and the Common Economic Space.
“The XXI century, N.Nazarbayev said, is a time for a deeper integration, dialogue and partnership to address new global challenges the humanity is facing now. It is the only pledge of the future prosperity and a way to avert clashes of civilizations with use of the stockpiled arsenal of mass annihilation weapons”.
This quotation from N.Nazarbayev’s “Strategy for post-industrial society and partnership of civilizations” is indication of his wisdom and clear vision of global-scale problems.
In the “Izvestia” newspaper, 3 October, 2011 the Russian PM V.Putin described the Common Economic Space of Russia, Belarus and Kazakhstan, to be launched on January 1, 2012, as a breakthrough project on the post-soviet space. And it is materialization of our President’s idea.
On November 18, 2011 Presidents of Belarus, Russia and Kazakhstan signed Eurasian Economic Integration Declaration, in which the parties announced the launch of the next phase of integration – the Common Economic Space. The document notes that the further development of integration of three countries meet their national interests, help to reach common objectives for the improvement of well-being and quality of life, promote sustainable socio-economic development, facilitate all-round modernization and strengthen national competitiveness in the global economy.
The Common Economic Space has become effective since last January 1, due to the removal of customs barriers presupposes free movement of capitals, technologies and work force in the territory of three countries. It will further contribute to the efficient cooperation between Kazakhstan, Belarus and Russia and pave the foundation for successful economic development of the states.
Eurasian Union – a project of post-soviet states with a common political, economic, military, customs, humanitarian, cultural space, expected to be created on the basis of the CIS integration structures – EurAsEC, OSCE and Customs Union. It is assumed that the union will be based on the model of a powerful supranational union capable of becoming self-sufficient market (the population of which at least 200-250 million people). The project for creation of Eurasian Union is the most ambitious post-soviet geo-economic and geo-political project aimed at consolidating cultural and educational potential of the new independent states. At the same time, the draft of the new union, according to its initiators and ideologues, is designed to give an adequate response to the current global challenges and threats, to overcome the inertia of de-modernization processes in the CIS.
Experts support the new project and say that the creation of the Eurasian Union means a new quality of post-soviet integration, which turns out from meaningless declarations to understandable and attractive to citizens and businesses, sustainable and long-term project that is independent of fluctuations in the current political and other conditions.
A key element of the economic structure of the Eurasian Union – CES, which, by design, will initially be based on the agreed actions in key institutional areas in macroeconomics, to ensure the competition rules in the field of technical regulations and agricultural subsidies, transport, tariffs of natural monopolies. And the next step is the common visa and migration policy.
The construction of the Customs Union and the Common Economic Space lays bases to form the perspective of the Eurasian Economic Union and the gradual expansion of the Customs Union member states Kyrgyzstan and Tajikistan, with the prospect of joining this project Ukraine and Moldova, which are also members – observers of the EurAsEC.
As a political prognosis by ideologues of the new association, it is postulated that the creation of the Eurasian Union will allow post-Soviet states to join the leaders of global growth and civilization progress. With common natural resources, capital, human development, the Eurasian Union will be competitive in the industrial and technological race, the competition for investors, for the creation of new jobs and advanced production facilities. Along with other key players and regional structures, such as the EU, U.S., China and APEC, the Eurasian Union will ensure sustainability and the “equilibrium” of global development.
The strategic importance of the Republic of Kazakhstan in the new association is predetermined by a number of objective circumstances. Kazakhstan is a natural “core” of the process of Eurasian integration. Country organically combines the “segments” of Muslim and Christian civilizations, Turkic and Slavic cultures that are important elements of the political and ideological diversity that allows it to create a unique experience of intercultural and inter-religious and inter-ethnic interaction by using it as part of integration process. Following the strategy of its national leader, the country determined its national idea and the strategic mission – a dynamic and stable development in an interconnected and multipolar world.
Kazakhstan has its own model of ethnic harmony and it is recognized and appreciated by leading international organizations, including the UN and OSCE. Implementing the concept of the First President of the country, Kazakhstan has created and developed a model of the “Eurasian democracy”, based on its unique political experience with the construction of a legal and democratic state, the institutions of a market economy in the difficult conditions of transformation processes 1990-2000’s.
Thanks to the efforts of its leader and creative activity of the multinational people of Kazakhstan – it is a nation state with consolidated nation and political space. This allowed the young state to avoid the “culture and civilization clashes” and the confessional problems that complicated the political development and formation of other Central Asian countries. This enabled Kazakhstan to become an example and guarantee of stable development for neighboring Central Asian states.
Kazakhstan is the author of a number of strategic international initiatives formulated by Nazarbayev on the international forums, including initiatives on nuclear disarmament. Implementing a multi-vector foreign policy, Kazakhstan has been consistently developing a dialogue with influential international organizations, representatives of various cultural and civilizational communities, which invariably increases its foreign policy weight.
In addition, Kazakhstan is the author of the original and successful model of economic reform, which is a key element of the policy of President Nursultan Nazarbayev. This has enabled the country to take its right place among the fastest growing countries in the world, which is of particular importance in connection with the ongoing management of the country committed to strengthening political stability. It is no coincidence that today, in close collaboration with its Russian and Belarusian counterparts – President Vladimir Putin and President Alexander Lukashenko – Kazakh President Nursultan Nazarbayev has formulated its own vision of goals, objectives and expectations for future unification.
Recognizing the importance of security, the President of Kazakhstan sees the Eurasian project possibility to collectively close to external economic, military, political, informational, technological, environmental, and other threats – in his view, the EU (Eurasian Union) should not become some form of the “Iron Curtain”.
In the context of global processes occurring today, it is essential that the Eurasian Union is thought by Nazarbayev as an open project in the context of broad engagement with the European Union and other relevant organizations.
Nazarbayev emphasizes that the Eurasian Union will not be a “restoration” or “reincarnation” of the USSR, or the revival of some “imperial model”. His thought coincides with the position of the leadership of Russia, Belarus and other countries. According to the President of Kazakhstan, the EU will not be directed against the so-called “”China’s economic expansion”, as the strategic partnership with China is determined among the foreign policy priorities of Kazakhstan and its partners in a new and evolving Union. And intensive political dialogue and close economic cooperation as well as cooperation within the SOC and CICA. A key condition for the development of innovative capacity of the EU is an active increase of investment and technological cooperation with the U.S., EU, China, and Asia-Pacific Economic Cooperation.
The national leader of Kazakhstan particularly emphasizes the inextricable link between the creation of the EU and construction of a new global system of security. Adopted in December 2010, Astana Declaration of OSCE Summit first designated the aim to create a common and indivisible Euro-Atlantic and Eurasian security space, which is fundamentally impossible without the support of regional alliances. From the point of view of the president of Kazakhstan, in case of the “ internal arrangement” and competent foreign policy Eurasian Union has the potential to become an integral part of the new global architecture, designed to response to challenges of the global economic crisis. Therefore, a new union should be created as a competitive global economic integration union with the internal mechanisms, but not as a new “bureaucratic structure”.
As a result, all participants of the Eurasian integration have to implement strategy that has ultimate goal of the establishment of an innovative economy. This will allow them to get out of the status of the “peripheral exporters of raw materials” and take a right place in the global “division of labor”.
According to the President of Kazakhstan, the Eurasian Union should be formed as a self-sufficient regional financial institution, which will be a part of a new global financial system, and is designed to help mitigate the effects of the global crisis. Therefore, common payment system based on supranational unit of account, and the common currency of the participating countries can be regarded as quite natural results of integration.
Nowadays this topic becomes very actual, in connection with the changed geopolitical reality, emergence of new threats and challenges for the countries of the former USSR. I would like to outline that there are certain forces in the world which do not want any integration in the former USSR. The West, in particular, does not want to see us develop our own modern and competitive production. The world is volatile. The events in the North Africa show that even the relatively favorable countries may be hit by the outside-inspired cataclysms.
If to consider the points of view of the opponents of this idea these days the Eurasian integration has its opponents. As soon as the Eurasian idea appeared, skeptics have argued that the implementation of this idea leads to revival of the Soviet Union and the loss of national sovereignty. No “restoration” or “reincarnation” of the USSR can be imagined today. In Kazakhstan and Belarus the opponents say that participation with Russia in joint projects will result in the loss of their country’s sovereignty. In Belarus, some people strongly against participation in alliances with Asian countries, which is contrary to the European civilization choice of their state. In Kazakhstan, there are those who believe that their country should be united with Turkic states. In Russia, they believe that it will have to bear the burden of economic support of their weak partners. Some Western experts declared that the Eurasian Union should be protected from the so-called Chinese economic expansion. Arguing in this way, the authors of these statements cannot understand the true meaning of integration and what benefits may they have.
Today it becomes obvious that countries are integrating in many parts of the world – even the Americans, who for decades believed that they do not need it, now trying to become the center of the movement in the region. North Atlantic integration under NAFTA also consists of three countries – the U.S., Canada and Mexico. But no one talks about the imperial ambitions of the United States. However, the attitude of the West, especially the United States to the integration trends in the former Soviet Union in the light of the emergence of the Customs Union and the Common Economic Space, we know from the statement of the former U.S Secretary of State Hillary Clinton made last December in Dublin: “The United States will try to prevent the reconstruction of the Soviet Union in the new version under the economic integration. Now efforts are being made to “resovetisize” region. This will be called in another way – the Customs Union and the Eurasian Union, or something like that. But let us not delude ourselves on this point – we know what the true purpose of it is, and try to find effective ways to slow down and prevent it”. The United States are very concerned about the creation of the Eurasian Union. It becomes evident that America is still looking through the prism of the “cold war” on the associations in the post-soviet area. But our Western colleagues have to understand that a new model of integration is being created in the former Soviet Union, which is based on economic cooperation.
It is noteworthy that the ratio of population to the creation of the Customs Union and Common Economic Space is rather positive. “In the study “The Integration Barometer” which was made by the Center for Integration Research together with the international research agency “Eurasian Monitor” – said the director of the Center for Integration Research E. Vinokurov, it is examined the attitude of the citizens of the CIS countries to the process of Eurasian integration. So: 80% in Kazakhstan, 72% in Russia, 60% in Belarus supported the TC. Non-economic factors may also explain the TC assessment. This may be the political prestige of the country, socio-cultural rapprochement, human contact, where people have the opportunity to meet with their families and friends, etc. People appreciate the integration not only for economic growth, but for other benefits that are not measured in GDP”.
Integration in trade-economic sphere and structural reforms in the countries of CU are connected processes. Thus, trade relations between CU members are the main instrument of stabilization of economy and way out from the financial crisis. Let me point out some issues and perspectives in the creation of Customs Union.
The advantages of the Customs Union:
1. CU enhances the regional market and promotes exports of three countries, making them one of the most attractive markets in the world. Establishment of the Customs Union allowed forming a new common market of 170 million inhabitants. For Kazakhstani producers market will grow by more than 10 times, which should provide a powerful impetus for the development of new modern facilities.
2. Acceleration of economic growth in member countries and openness of international integration. According to experts, the Customs Union will allow three countries to achieve by 2015, the total GDP of $ 400 billion. Each state party will increase its GDP by 15.
3. Lack of customs borders between the countries allows entrepreneurs to cut costs and speed up the circulation of goods.
4. Attraction of investments in the economy of countries, as well as the establishment of joint Kazakh-Russian and Kazakh-Belarusian enterprises. So foreign investor, before investing will take into account not only the amount of domestic Kazakh market, but the total population of three countries.
5. One the most important advantages of the Customs Union – doubling of revenues from customs duties in the budget.
6. Unfortunately, about 95% of exports go to the primary sector, and 80% of foreign investment directed there. Therefore, the main effect, the country’s leadership expect from participation in the Customs Union – to diversify the economy.
8. From joining the Customs Union the agricultural sector may win, as a huge market will be opened to a domestic producer of agricultural products.
9. A number of international instruments will be adopted in the framework of the Customs Union – technical, veterinary and sanitary regulations. Technical regulations of CU members will be united.
The disadvantages of the Customs Union:
1. It would be difficult to Kazakhstan to defend its economic and political interests, considering the dominance of Russia.
2. With the introduction of the Common Customs Tariff Kazakhstan raises its average tariff, which leads to higher prices for goods from the third countries, in particular from China, Turkey, Korea and many other countries, which is a great drawback for consumers.
3. Due to the rise in prices of goods in Kazakhstan inflation is expected of 0.5% -1%.
4. Competition can be a heavy burden and a challenge for domestic business and it will be hard to sustain for many producers.
It is necessary to note that Kyrgyzstan, Tajikistan and Armenia are ready to become members of the Eurasian Union today. I am confident that other countries will join them soon. The most obvious reasons and the prerequisites for the creation of the Eurasian Union are the economic needs of the participants in the unification process, the orientation of their national economies to Russia since the Soviet Union. Among the important distinguishing social and cultural factors are languages, cultural and historical experience, and evaluation of the historical past.
Conclusion
In the article, an attempt is undertaken to tell you about the role of Kazakhstan and its President in successful implementation of the integration processes on the post-soviet space and the significance of economic integration for further development of our country. Integration of Kazakhstan in the Eurasian Union is considered from the european and national opponents viewpoint in the given article. According to the author the Customs Union and the Common Economic Space should not compromise the political sovereignty of our country in any way.
I believe, the idea of our President Nursultan Nazarbayev on the establishment of the Eurasian Economic Union since January 1, 2015 should provide both economic growth and building-up the common defensive capacity in Central Asia.
The implementation of declared by the president of Kazakhstan strategic approaches and initiatives would allow the Eurasian Union to achieve full internal integration and realize its foreign policy potential turning into one of the key factors for the stability of the global political and economic systems. Therefore, today it is necessary to discuss actively the process of Eurasian integration in the political, scientific and expert community.
Notes
1. Nursultan.Nazarbayev. Eurasian Union: From the Idea to the History of Future/ «Известия-Казахстан», 26 october, 2011. http://www.akorda.kz/ru/speeches/articles/evraziyskiy_soyuz
2. VV. Putin. New integration project for Eurasia – future that comes today // Izvestija, 4 October 2011 г. //http:// Izvestia.ru/news/504081
Customs Union of Russia, Belarus and Kazakhstan: The Issues of Formation and the Prospects of Development (International Scientific and Practical Conference). Russia, May 2011
3. EDB Integration Barometer 2012 – Saint Petersburg, 2012. – p. 68
4.Ilya Zlatkin. A Sovereign Surge, Not a Soviet Resurgence: The Mutualism of Eurasian Reintegration. The journal of Russian and Asian Studies, June 2012
5. Katharina Hoffmann. Eurasian Union – a New Name for an Old Integration Idea. Russian Analytical Digest No. 112, 20 April 2012
6. Mukhametzhanova D.Sh. Kazakhstan and world integration processes. – Almaty: KISS, 2011.- С.
About the author:
Sarbayeva Roza is a PhD lecturer at the Kazakh National University named after al-Farabi. She is specializing in internal and external policy of Kazakhstan and Central Asia, the author of several research articles on the integration processes in post-soviet countries. She is a researcher at the Eurasian Center of the Kazakh National University named after al-Farabi. She participated in many international seminars and conferences related to political issues (Russia, Great Britain, Germany, France, Poland, Kirgizstan, Uzbekistan etc.).
