Well-Regulated Regional Integration a Pathway to Globalization, Kelimbetov Says

Kazakhstan’s Deputy Prime Minister Kairat Kelimbetov addressed the roundtable, “Regional economic communities: Integration to compete and pathway to inclusive globalization,” on June 20 at the St. Petersburg International Economic Forum, where he reiterated that regional organisations like the Eurasian Economic Union (EEU) and the Common Economic Space (CES) were not movements away from globalisation, but pathways for regions to join globalisation processes. He also noted that work is underway to develop regulatory measures and practices that adhere to best international practices and that the first fruits of that work will be seen in May 2014.

Agreeing with previous speaker Tatiana Valovaya, member of the board and minister of principal areas of integration and macroeconomics of the Eurasian Economic Commission, who called integration a pathway to unification, Deputy Prime Minister Kelimbetov said, “Any regionalisation is probably an attempt by a cluster of countries… to join in the globalisation process. Before 2007, globalisation brought only positive trends: world economic growth, the credit boom, which then ended up with the events of 2007 and 2008, and post-Soviet countries, at least, for the first time faced the threat of a global financial crisis… As a systemic response, this regionalisation is in a way an attempt to respond to the challenges of today.” He commented on the overall growth of world trade and geographical specialisation and noted that Kazakhstan wants to diversify its specialisation beyond the export of minerals and other natural resources.

The deputy prime minister also stressed that Kazakhstan is continuing with the process of accession to the World Trade Organisation (WTO) and continues to work with large, multilateral organisations.

“Working with many multilateral institutions like the World Bank and the OECD (Organisation for Economic Cooperation and Development) is an integral part of the work of the Common Economic Space and the future Eurasian Economic Union,” he said.

Kelimbetov also stressed that EEU was based on international best practices, as well as a desire to develop the region’s own best practices and maintain the members’ economic identities. He noted the example of the European Union and the long process of European integration, which he said was being carefully studied. “We need strict compliance with principles that form the basis of our organisation… The legislation of the CES will include laws without exceptions to the rules, rather than with exceptions. We’re working on this and by May 2014 we’ll have the first results.”

Angel Gurría, Secretary General of the OECD, who spoke first after the initial remarks by moderator Viktor Khristenko, chairman of the board of the Eurasian Economic Commission, was very positive in his remarks about the potential of regional integration to boost the global economy. However, he also cautioned about the need for consistent regulatory structures within them, without exceptions.

“Let’s go for regional economic communities, absolutely, yes, but let’s not lose sight of the bigger target, which is a more multilateral trading system,” he concluded.

Addressing these comments about the regulatory structure of the EEU and other regional organisations, Deputy Prime Minister Kelimbetov said, “First and foremost, this is about regulation, about developing supranational regulators that will enable us to moderate many processes more successfully and flexibly. Then, of course, acquiring new competencies, because we are somewhat technologically lagging today. We need to catch up. There are many methodologies of how to do that; we can see how transboundary clusters are created around the globe and what markets are targeted.”

The deputy prime minister noted the global economic shift toward Asia and Kazakhstan’s involvement in the economic processes of the Shanghai Cooperation Organisation, stressing that “Integration is underway at all levels.”

This year’s St. Petersburg International Economic Forum focused on finding solutions to the challenges facing the global economy. In a message to participants, Russian President Vladimir Putin said, “The programme this year includes issues related to reforming the global financial system, improving the way national debt is managed, stimulating investment in the real economy, strengthening food security, and ensuring the sustainable development of global energy.” This year, the B20 summit of global business leaders, which generates recommendations and commitments from the worldwide business community, was also held within the framework of the St. Petersburg Forum.

The forum brought together more than 7,000 participants, including heads of major companies and representatives from key regions of the world. German Chancellor Angela Merkel and Dutch Prime Minister Mark Rutte were among the participants. The forum this year resulted in the signing of 102 agreements worth 9.6 trillion Russian rubles (about $292.5 billion), including an agreement between Russian Railways JSC, Kazakhstan Temir Zholy and Belarusian Railways worth 202.7 billion Russian rubles (about $6.2 billion).