President Touts Benefits of Eurasian Integration During Moscow Visit

ASTANA –President Nursultan Nazarbayev delivered his hallmark speech devoted to Eurasian integration at Moscow State University on April 28. Symbolically, the idea of creating a Eurasian Union was initially proposed by President Nazarbayev slightly more than 20 years ago in a lecture at the same university.

In his recent speech, Nazarbayev noted that the soon-to-be-established Eurasian Economic Union (EEU) between Belarus, Kazakhstan and Russia builds on the work of the Customs Union (CU) and Common Economic Space (CES). In its own turn, the EEU will create a common market of more than 170 million people and common economy valued at $2.2 trillion.

Integration is expected to increase the cumulative gross domestic product of the three countries by nearly $900 billion by 2030.

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Source: Agency of Statistics of Kazakhstan

President Nazarbayev stressed that Eurasian integration provide its participating states a “common strategic advantage on the eve of the Third Industrial Revolution.”

The year 2013 was marked as a breakthrough in Kazakhstan-Russia relations: the countries signed a unique Treaty on Good-Neighbourliness and Alliance, said President Nazarbayev.  In addition, at the end of the last year the two countries concluded a bilateral agreement on military cooperation. Kazakhstan and Russia cooperate successfully in all spheres, including energy, space, defence, culture and trade.

The leaders of Kazakhstan, Russia and Belarus are confident in the unique capabilities of the integration to resist and help alleviate global risks, including the financial crisis that is still not overcome in North and South Americas, South-East Asia, in the Persian Gulf region and the Arab world. As Nazarbayev put it, in the conditions of all-encompassing  globalisation, regional integration is a key factor for economic and civilisational development and raising global competitiveness of any nation.

The ambitious Eurasian initiative has faced considerable and often not justifiable criticism from pundits, the Kazakh leader said. Many have accused member states of creating regulations and policies that would benefit one member state while impairing the interests of other members of the union. This criticism has no basis. Firstly, the structure of the EEU Commission and its ruling council means that no single state can dominate the decision making process. Resolutions are based on the decision of the majority of the council, but each state has a veto on the process. In this case, the issue is brought up to the level of the head of states where the decision is made by consensus.

Secondly, the EEU will create a system of clear indicators that would assess the influence of Eurasian integration on life standards of the population, productivity and competitiveness of each member state.

Lastly, according to President Nazarbayev, “the creation of our economic union is not a frozen tenet. We are to face many challenges in the future. The choice to integrate is not a magic wand that guarantees miracles.” Thus, the Eurasian integration process is subject to further advancement, including collaboration on devising a formula for equal benefits to each member state.

Similarly, the myths about reincarnation of the Soviet Union have no basis, the Kazakh leader stressed.  There is no institutional basis for the reconstruction of the Soviet Union. Moreover, over more than two decades of independence all republics of the former Soviet Union have built on their national state institutions.

According to the Kazakh leader, all negative assessments of the EEU stem from the concerns over the substantial potential of the Eurasian Economic Union, its capability to become a serious competitor to other centers of the “global economic gravity.”

President Nazarbayev stated that the main mission of the Eurasian Economic Union in the first half of the 21 century is based on two main pillars. First, the union is aimed at becoming a key economic macroregion of the world. Against the backdrop of shifting “economic gravity” eastwards, the Eurasian Economic Union located between the largest industrial massives – the European Union and Asia-Pacific –is destined to serve as a geo-economic bridge between East and West. In doing so, the Eurasian Economic Union will not be a mere intermediary between Europe and Asia, but rather develop as a new centre of global innovations and favourable destination for multinational businesses. The second important element of the Eurasian Economic Union mission is to help each member state achieving the goal of entering the group of the most developed countries.

In order to achieve such an ambitious goal, Nazarbayev proposed a number of concrete priorities and actions. First, it is essential to the EEU to develop and adopt a Programme of Eurasian Innovation Technology Cooperation for the period until 2025. To implement the Program, the President suggested establishing a Eurasian Innovation Council that would be in charge of developing innovations across the three member states in a wide range of spheres: advanced processing of raw materials, space, chemical industry, machinery, agriculture, energy and transport. “Concrete projects [in the innovation spheres] must become a driving force of the economic integration by producing competitive goods, creating working places and boosting national revenues,” said Nazarbayev.

Another important task for the EEU is to create a trans-Eurasia infrastructure. In order to achieve this, Nazarbayev proposed to create a Common Eurasian Communications Network, construct a railway along the Minsk – Moscow – Astana – Almaty route, modernise existing roads and railways, and construct the “Eurasia” channel connecting the Caspian Sea and the Black Sea.  The President emphasized the importance of the transportation corridor “Western Europe – Western China,” which goes through  Kazakhstan, Russia and Belarus. A new railroad allowing access to China and South-East Asia has been constructed while another one, joining Kazakhstan and other EEU countries with Iran and other Persian Gulf counties is under construction.

Cooperation in the energy sector has a primary role in ensuring the successful functioning of the EEU. President Nazarbayev suggested establishing a Common Internal Gas Network that would supply gas to all member states at jointly accepted common tariffs. It is essential to develop a common project called “Eurasian Energy” for deeper integration within the energy sector, including construction of a nuclear energy plant in Kazakhstan by joint Kazakh-Russian entities, he said.

Besides, Nazarbayev proposed a number of initiatives for cooperation in the areas of financial sector, small and medium businesses development and agriculture. As he put it, it is absolutely essential to establish information-analytical centers for the Eurasian integration. As such, he proposed to utilize the resources of the Eurasian Bank of Development as well as to establish a Eurasian Agricultural Academy.

Speaking of the benefits the Eurasian integration processes have already brought Kazakhstan, Nazarbayev said the country’s trade within the Customs Union have grown 60 percent, including in high-value added products being traded both ways. Cumulative international reserves of Kazakhstan have reached $100 billion. Over the last four years, 780 new enterprises have been established and 250 new kinds of products have been produced.

According to the Kazakh leader, the experience of the Eurasian Economic Union has provided and will continue to provide further impetus to other organisations working with Russia, Kazakhstan and Belarus. As such, the Commonwealth of Independent States, the Collective Security Treaty Organisation as well as more than 40 specialised intergovernmental institutions of the CIS already benefit from the dynamic processes of Eurasian Integration.

Additionally, the EEU experience could be helpful for stronger ties in the Shanghai Cooperation Organisation, the Conference on Interaction and Confidence Building Measures in Asia and for an initiative to create the Common Continental Security Programme proposed by President Nazarbayev at the Organisaton for Security and Cooperation in Europe summit in Astana.

Currently, the G8 and G20 are unable to tackle, with needed effectiveness, crises in the world economy, global politics and international law, Nazarbayev said. The President reiterated that his G-Global initiative, which allows for all countries to participate in a scholarly and political way in proposing solutions for global problems, is based on the fundamental principles of the 21st century: evolution, justice, equality, consensus, global tolerance and trust, global transparency and constructive multi-polarity.

The Eurasian Economic Union is created on the same principles and is aimed at making a solid contribution to tackling global challenges. “Trust, equality, beneficial cooperation and allied relations, these are common values of Kazakh and Russian people, which we must hand down from generation to generation,” Nazarbayev stressed.

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