Greater Eurasia

Priorities for the EAEU’s next five-year plan

May 5, 2019
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_ Yuri Kofner, Head, Eurasian Sector of the Center for Comprehensive European and International Studies of the Higher School of Economics, Editor-in-Chief, analytical media, Eurasian Studies. Moscow, April 25, 2019. Interview by Dmitry Podobed. The interview was first published in the special issue of the interstate journal “The Bulletin of the Economy of the Eurasian Union” devoted to the priorities of the second five-year plan of the EAEU (in Russian, Euromedia. April – May 2019).
The development of the Eurasian Economic Union (EAEU) is becoming increasingly dynamic in the economic, trade and geopolitical dimensions. However, the EAEU’s potential is far from being exhausted. What tasks would the Eurasian Union need to solve in order to remain in demand as a vibrant integration bloc?
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– The EAEU is on the threshold of its first anniversary and Eurasian cooperation has been going on for more than 20 years. What conclusions can be drawn from the creation of this Union? Is it justified to say that it has established itself as a successful integration block?
– 29 May 2019 marks the 25th anniversary of modern Eurasian integration, when the president of Kazakhstan, Nursultan Nazarbayev put forward this idea in his lecture at the Moscow State University. At that time, immediately after the collapse of the USSR, this was a courageous initiative. 2019 also marks five years since the signing of the Treaty on the EAEU. Since then we can outline at least three conclusions about the Eurasian integration project:
Firstly, the EAEU is beneficial for its member states. After all, it is a large single market with a population of 180 million people, which contributes to the growth of trade, an increase in the production of goods and services with a higher added value, and allows for an increase in exports of various non-primary industrial goods.
Secondly, the EAEU strengthens the bargaining positions of all its participants in relations with third countries.
Thirdly, we can list some of the individual benefits for each of the member states.
For Armenia the EAEU is a way out of artificial geographic isolation. For Belarus – the creation of a multilateral platform to safeguard the country’s interests in trade with Russia. For Kazakhstan – the reduction of transport costs and better access to the world oceans, i.e. markets. Kyrgyz citizens draw benefits from having equal access to the Union’s large labour market. In turn, the Russian Federation receives labour migration, which is necessary for sustainable economic growth. Moreover, Russia benefits from the creation of a certain “cordon of economic prosperity” around its borders.
It should be important to note that the EAEU is the first in history peaceful unification of the peoples and countries of Eurasia, which is founded on a pragmatic, voluntary and equal basis.
– The supranational governing body of the EAEU is the Eurasian Economic Commission (EEC). How do you see its role in the development of the Union? What are the current challenges facing the EEC now and for the future?
– The headquarters of the EEC looks nothing like an old fashioned Soviet style ministry, but rather like an ultra-modern office of some international consulting company. With such an atmosphere going for it, the EEC is constantly trying introduce the best international practices, standards and policies.
In terms of overcoming current challenges and further steps, the following would needed:
Firstly, in order to fully achieve the implementation of the current integration agenda until 2025, it is important to expand the powers of the Commission and to increase its budget.
Secondly, the Council of the EEC at the level of extremely busy vice-premiers still serves as a platform for interstate coordination, rather than as an effective supranational administrator. Looking once again at the experience of the European Union, this function should be transferred to an institution of permanent government representatives with the EEC Council (in Europe they are called Coreper I and II), which would perform the work of preliminary coordination of the positions between governments and turn it into a permanent, straightforward and transparent process.
– One of the important aspects of the EAEU’s economic development is the digital agenda. In your opinion, what role does it play in the integration processes in the Union? What benefits can the Eurasian bloc get through its successful implementation?
– The digital economy is a completely new direction of post-Soviet integration. Initially, it was not even spelled out in the Treaty on the EAEU. However, the heads of the member states of the Union considered it so important that in 2016 an information technology department was established within the EEC and the “EAEU Digital Agenda until 2025” was launched. Analysts from the World Bank have calculated that the implementation of this agenda will add an additional 1.5% to the growth of our countries’ GDP.
Leading economists of the world are sure: digitisation will completely change the economic structure in production, distribution and management. The challenge lies in the fact that the digital economy by its nature is outside the formal geographical boundaries. This challenges integration functionaries, e.g. of the Eurasian Commission, with the task of developing new approaches to managing the digital transformation.
It is good to note that the export of digital services is becoming an important component of the overall export of services of EAEU countries. In the EU, its share is almost 40%, in the EAEU – about a quarter.
– You are in charge of the Eurasian Sector of the Center for Comprehensive European and International Studies at the Higher School of Economics (HSE) and are editor-in-chief of the “Eurasian Studies” portal. What is the purpose of these organisations and their role in Eurasian integration?
HSE’s Eurasian Sector is the first ever academic chair and research centre in the post-Soviet space that deals with Eurasian integration issues not only in terms of geopolitics, regional studies or history, but mainly in terms of economic aspects. We study the processes of economic integration both within the EAEU and in the Greater Eurasian space. The sector was established in September 2017.
Today it has three main activities.
The first is educational: we regularly conduct special lecture courses on Eurasian integration with the participation of leading experts from the EEC, the Eurasian Development Bank (EDB) and other relevant institutions. Soon we will also launch our own master program.
The second is research. Our main customers are the Eurasian Economic Commission and the Russian government. Official cooperation has been established between the EEC and HSE.
The third direction is popular science. On a regular basis, we hold round tables, strategic workshops, situational analysis sessions and other events. Many of them are open to the general public.
For example, in December 2018, as part of a research order by the Eurasian Commission, we conducted an educational, research and discussion exchange program with the participation of 15 young leading researchers from top universities and research institutes from all of the five EAEU member states. The main event of the exchange was an excursion through Eurasian Economic Commission and a meeting with its chairman Tigran Sargsyan.
The sector also holds the largest library with all publications on Eurasian integration.
The media portal “Eurasian Studies” has both a Russian and an English version. Both are in high demand. The Russian portal is a collection point for all major research articles, analytical reports and official documents on Eurasian topics, therefore it is in demand among students and young researchers. The English version is the only platform for foreign experts where they can read objective information about the situation in the EAEU.
– Despite the obvious advantages of the Eurasian Economic Union, there is still a lot of work ahead. In your opinion, where should most emphasis be placed in the future?– In my opinion, there are four directions that need to be implemented.
Before everything else, we first need to fully implement the declared provisions of the EAEU Treaty: the four freedoms of movement and the creation of a single internal market of the Union, both cross-sectoral, as well as within specific sectors, for example, electric power, transportation services, oil and gas, and finance.
Secondly we should launch prominent flagship projects of the Eurasian Union and introduce the “Made in EAEU” brand. This would be important, so that both our citizens and foreign observers, could in a simple way notice some obvious achievements of integration. These flagship projects could be both various services to the population, as well as distinct industrial products. In the second case, it would be necessary to support the creation of technological production chains with the participation of three or more member states of the Union. For example, at present the EEC with the participation of national ministries is trying to establish Eurasian industrial corporation for the production of tractors, energy-efficient electrical transformers and a common satellite system. In terms of services would be worthwhile to work on the abolition of roaming charges, as well as on lowering the prices for air travel between our countries.
As very promising I see the idea of introducing of a certificate for geographical and cultural indications of foodstuffs that are traditionally produced in a certain region or according to certain national traditions. Examples for the application of such an indicator could include Armenian brandy or Kyrgyz “Maxim”, a traditional cold beverage.
As the third direction I support the proposal by Russian President Vladimir Putin, who suggested adding to the economic integration track some aspects of humanitarian cooperation in the fields of education, science, tourism and sports.
And it’s not about politics. Economists will tell you: one cannot follow through on economic integration without adding certain aspects of humanitarian cooperation. Otherwise one will not be able to fully realise the four freedoms: the free movement of goods and services, capital, enterprises and labour. For example, it will not be possible to create a single labour market if we do not cooperate in the field of education. It will not be possible to establish industrial cooperation without cooperation in the scientific and technical sphere. And so on.
Finally, the fourth direction would be to strengthen existing institutions of Eurasian integration – the Eurasian Commission, the EAEU Court, the Eurasian Development Bank and the Eurasian Fund for Stabilisation and Development (EFSD) – in terms of budget, personnel and competencies. In parallel we could establish new institutions: a platform of dialogue and potential in-depth partnership between the EAEU and the other CIS countries, as well as the above mentioned permanent representatives of the governments of the EAEU member states.
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