Eurasian Economic Union (EEU) integrates trade, investment and humanitarian cooperation of neighbouring countries.
By Agha Iqrar Haroon,
Development Observer for Central Asia and Eastern Europe
Eurasian Economic Union integrates trade, investment and humanitarian cooperation of neighbouring countries and it has become reality despite of negative and unfounded criticism of many political circles. On May 29, 2014 in Astana – the capital of Kazakhstan, the signing of an agreement to establish Eurasian Economic Union took place. The organisation will commence work on January 1, 2015. The Eurasian Union will be a new form of economic integration between Russia, Belarus and Kazakhstan, who already share a customs union incorporating 85% of GDP of the CIS region.
20 years earlier, on March 29, 1994, the president of Kazakhstan Nursultan Nazarbayev first proposed the idea of integration – Eurasian Economic Union. His concept was that shared history, common economic bases, close cultural ties and similar national aspirations gave people a chance to build multilateral international connections.
Though misunderstood and underestimated by most politicians of the former USSR at the time, the idea nowadays became widely popular in the business community and socio-humanitarian level. Numerous integration platforms emerged, and now successfully operate: Eurasian Development Bank, Eurasian Business Council, Eurasian Media-Forum, Eurasian Universities Association and many others.
Formation of the Eurasian Economic Union is linked with the need to help integrate trade, investment and humanitarian cooperation of neighbouring countries.
The primary purpose of the union is to foster economic cooperation and mutually beneficial forms of trade. Eurasian Economic Union can indeed be interesting from a pragmatic point of view as it aims to improve access to goods in their traditional markets.
The decisions that brought integration were neither superficial, nor quick. They were thought through and fostered by the public and the government, and most importantly – are based on economic requirements of all participating countries, the confluence of their interests, expectations and hopes.
Most experts agree that Eurasian Union, Customs Union and the perspective CIS common economic area will be able to shelter the participating countries from what ex-president Dmitry Medvedev called the strengthening turbulent processes that shake the global economy.
For counties experiencing this turbulence it is more than apparent that it is better to weather it together – sharing resources, capabilities, scientific and technological cooperation, in other words, using all the advantages of collective pull of resources and strengths.
The formation of Eurasian Economic Community, as a first step towards Eurasian Economic Union planned for 2015, was an informed political decision based on the facts that economic integration is mutually beneficial, provides access to resources necessary to improve the wellbeing of the nation, strengthen the economic potential and foster scientific-technological development.
Recently, efforts have been made by the leadership of EEU countries to speed up the process, as the meetings to discuss important integration procedures and their realisation became more frequent.
Principally, for the first time on the post-soviet area a supranational organisation is formed – The Eurasian Economic Commission. The commission is practically a prototype for the governing body of the union…
The main parameters for the current stage of integration process are already affixed to the relevant documents. It is clear that the Customs Union will currently be the main instrument of these processes. We are talking about lowering barriers for trade, investment and labour mobility, as well as creating common economic standards. The customs union of course will be a mechanism for building relationships with other integration groups and counties, because the world is moving towards formation of continental and possibly transcontinental blocks.
Today the integration processes between European Union and NAFTA (USA, Canada, and Mexico) are already taking shape. European Union and China are sharing active consultations on free trade zone; USA has the Trans-Pacific. In general, regional approach has become a modern trend, as solving all the issues solely through WTO is difficult.
In case of EU, many countries jumped to an unjustified conclusion that Customs Union and Eurasian integration is an attempt at restoring Soviet Union. Consequently Customs Union’s many offers for cooperation and requests for experience sharing have not been answered in Europe.
Alternatively, the European Union could have made an effort to share its experience and help build Eurasian integration processes to insure EU would have a reliable partner in the east. Unfortunately, this was not the case due to the prevalence of the XX century believe that any association with Russia is a threat to western interests.
Nonetheless, the Supreme Eurasian Economic Council and the Eurasian Economic Commission are operating successfully. Kazakhstan, Belarus and Russia apply Common Customs Code and coordinate macroeconomic policy. The cumulative economic volume of three counties is over 2.2 trillion USD. Industrial output for 2013 is – 1.5 trillion USD. The prospective value added to GDP by 2030 from integration effect is estimated at around 900 billion USD. It is symbolic that the signing of the historic integration document will take place in Kazakhstan capital Astana on the 20th anniversary of the birth of the idea. A number of other countries have shown interest in participation.
Eurasian integration offers participating countries a strategic advantage in the coming third industrial revolution, which is taking place during the dramatic shift of world order towards multipolarity. The current global instability – is not just an economic crisis, but also that of international law and global politics, which G8 and G20 prove unable to handle. That is why in 2012 president N. Nazarbayev proposed a G-Global initiative, supported by 160 countries. G-Global incorporates the fundamental principles of the XXI century: evolution; justice; equality; consensus; global tolerance and trust; global transparency; constructive multipolarity.
The idea of Eurasian Economic Union with the wide popular support, including of scientific society, became a strategic program for practical actions: EurAsEC, free trade zone for the majority of CIS countries, Customs Union and Common Economic Space of Kazakhstan, Russia and Belarus.
The main goal of Eurasian Economic Union in the first half of ХХI century is to become a key global economic macro-region, placing participating countries on level with the most developed countries. Eurasian Economic Union must include a system of indicators to measure the integrations influence on populations’ welfare growth, productivity and economic competitiveness. The whole process of Eurasian Integration most importantly must be functionally and practically devoted to solving this civilising mission.