On January 1st, 2012, the Single Economic Space (SES) of Belarus, Russia and Kazakhstan is launched, opening the door to a new period of integration (preceded by our three states’ Customs Union). Commodities, services, capital and labour will be able to move more freelyThe formation of a Eurasian Economic Union will be the next stage of co-operation between Minsk, Moscow and Astana — as presidents Alexander Lukashenko, Dmitry Medvedev and Nursultan Nazarbayev agreed at the Kremlin in November. They signed a declaration on Eurasian economic integration, while agreeing to establish a supranational regulating body: the Eurasian Economic Commission. In future, our union of three may welcome new members, becoming an efficient, fully-fledged military-political block — similar to the European Union.
Profitable to all
On signing the declaration on Eurasian economic integration in Moscow, Mr. Lukashenko, Mr. Medvedev and Mr. Nazarbayev stressed that the major goal of the SES and the future Eurasian Union is to enhance people’s wellbeing and quality of life. For Belarus and Kazakhstan — whose economies are much smaller than that of Russia — the preservation of national sovereignty during the process of integration is vital. Accordingly, the voices of Minsk and Astana in solving common issues need to be as weighty as that of Moscow. While preserving independence, our three states also need to become more mutually dependant. The declaration mentions a ‘co-ordinated economic policy’, ‘co-ordinated parameters of major macroeconomic figures’ and ‘strengthening of co-operation in the foreign currency sphere’. Our three states will co-ordinate actions, agreeing on important aspects such as foreign debt, budget deficit and the volume of agricultural subsidies.
The Eurasian Economic Commission is to regulate SES work, taking on 175 national functions. The Commission would be the successor to the Customs Union Commission, based on the ‘principles of mutual benefit, equal rights and national interests of all parties’. Since the SES is to expand and amplify supranational bodies’ tasks, the Commission would have two levels (differing from the Customs Union Commission, which had just one): the Council and the Board. Their functions and authorities would differ, with each representing its interests. The most sensitive issues would be studied by the heads of state at the Supreme Eurasian Economic Council and only consensus decisions would be adopted. As Mr. Lukashenko, Mr. Medvedev and Mr. Nazarbayev stress, Minsk, Moscow and Astana agree on the creation of supranational bodies and the Single Economic Space as ‘this is profitable to all’.
The Ambassador Extraordinary and Plenipotentiary of Belarus to Russia, H.E. Mr. Andrei Kobyakov, has been involved in Eurasian integration issues for many years. He speaks of the SES’ advantages, stressing that turnover between our three states is expected to grow. This should lead to stronger Belarusian, Russian and Kazakh national economies. As Mr. Kobyakov notes, most importantly, the SES opens doors for our three countries’ citizens. Workers will be able to move freely which, as the Ambassador explains, ‘will ease the finding of good, highly-paid jobs, while establishing and developing individual businesses’.
Many are worried by such integration, especially as Belarus’ economy significantly differs from that of Russia and Kazakhstan. The state sector receives major focus here while Russia and Kazakhstan have more privately owned enterprises. Moreover, Belarus more actively regulates economic processes. Nevertheless, Mr. Kobyakov is convinced that no obstacles exist to integration and that the Belarusian economy is in no way at risk. He asserts that, importantly, the SES is creating equal conditions for our three countries’ companies. An open and transparent competitive environment is being created. According to the Ambassador, ‘time and competitiveness will show which is more efficient: private companies or state run enterprises’. “Those who work better will win,” he adds.
Specialists also see no problem in our three states’ differing economies. Raw materials, oil and gas play a huge role in Russia and Kazakhstan, while Belarus lacks such natural wealth. However, our Republic boasts powerful industrial potential — primarily, its machine building complex. According to Mr. Kobyakov, this is to our advantage, as our economies mutually supplement one another. Belarus is interested in supplying reasonably priced hydrocarbons while Kazakhstan needs Belarus-made machines and equipment. As a result, each would benefit from integration. The SES aims to enhance the competiveness of each country’s economy.
View from Minsk
Experts call the pace of Belarus-Russia-Kazakhstan integration ‘record breaking’. In fact, it has taken our three states only a short period of time to cover the same ground which took decades for the European Union. As Mr. Lukashenko believes, the pace at which the SES has been established has been possible because of Moscow acting as the centre of integration processes and reconsidering some of its approaches. “Plenty of ideas have appeared since the Soviet Union’s collapse,” he said. “However, it was always said that nothing would be possible if Russia failed to take practical steps towards integration, rather than declarations and announcements.” In fact, these practical steps and Russia’s respect for its partners’ interests (sometimes neglected in the past) have made it possible not only to declare but to really establish the Single Economic Space.
The President of Belarus also notes that some people within our three countries still strongly oppose SES integration, asserting that it could lead to a loss of national sovereignty. “Attempts have been made to frustrate the process. However, we’ve overcome this, clearly announcing that we won’t lose our sovereignty and that nobody is coercing us,” Mr. Lukashenko notes, speaking of the voluntary and trust-based atmosphere of co-operation. “We are going forward because it’s profitable to all our three states.”
According to Mr. Lukashenko, the advantages of the Customs Union and the Single Economic Space are already being felt. He explains, “Importantly, our conflicts, lack of understanding, ‘war’, ‘sugar’ and other trading wars will become things of the past. We’ve declared and are already almost operating under these conditions, which envisage the free movement of commodities, services, capital and people. Isn’t this to people’s advantage? Of course, we do this for our people. Everything is done with this in mind.”
Minsk considers that ‘there is no need to reduce the pace of our economies’ rapprochement’. The European Union can serve as an example, being further down the road than Minsk, Astana and Moscow.
During their November meeting at the Kremlin, Mr. Lukashenko, Mr. Medvedev and Mr. Nazarbayev announced that the Eurasian Economic Union could be established by 2015. According to the Russian and Kazakh presidents, Belarus is an ‘accelerator’ of this process.
In his interview for Rossiya TV Channel, Mr. Lukashenko stressed that the Eurasian Economic Union could even be established by 2013. “We’ve prepared the basis [the Single Economic Space] within a year and a half. Let’s finish by late 2013. You know, Dmitry Medvedev and Nursultan Nazarbayev say that we’re quite able to do this”,” he said. The Belarusian President believes that the most important phase — movement towards the Union — has already begun. “The momentum of this movement won’t allow us to deviate from our path. Importantly, we are moving towards greater unification and greater unity.”
Minsk also considers that mutually beneficial co-operation with other integration unions is essential — such as with the EU. Eventually, the European Union and the Eurasian Union could even integrate, resulting in a single economic space stretching from Lisbon to Vladivostok. Naturally, such prospects are for the future.
A possible transition to a single currency — following the EU’s example — could be a topical issue for Eurasian integration in coming years. In his interview for Rossiya TV Channel, Mr. Lukashenko announced, “We’d probably use the Russian rouble as our single currency, if it were of interest to all sides.” However, the transition to a single currency must be well thought-out, the Belarusian President believes; he has no desire to repeat the Eurozone’s mistakes.
A great job is never easy
The establishment of the SES and the transition to the Eurasian Economic Union have received much coverage in the media. The French Press Agency has reacted to Minsk-Moscow-Astana integration with an article which reads: ‘The three countries have already established the Customs Union but the creation of a Eurasian Union — with its own executive body — will be a step forward’. Describing the functions of the Eurasian Economic Commission, the agency notes that ‘this is a body which would act under principles similar to those applied by its European Brussels-based counterpart’.
“Time will show what the Eurasian Union will become. I’d like to see it more ‘European’ than ‘Asian’,” comments one Russian State Duma deputy, Anatoly Lokot. “I’d like this union of three to be joined by our Ukrainian brothers, as their participation would strengthen this powerful union further.”
Kyrgyzstan and Tajikistan could also join the Eurasian Union in the future, with Kyrgyzstan’s new President — Almazbek Atambayev — already advocating the move. According to him, ‘a strategic partnership with Russia is needed’.
“Any integration — as seen from the Belarus-Russia Union State example — is a blessing for people, being a response to their natural desire to live without borders, border controls and customs declarations, with relatives able to visit each other,” Mr. Lokot explains, speaking of the desire of former Soviet republics to move closer.
Adil Kaukenov, the Head the Quorum.kz analytical group, stresses another aspect, “International experience shows that it’s impossible to shut yourself off, relying exclusively on your own force. This leads to either isolation or serious economic stagnation.”
Mikhail Kovalev, the Dean of the Economics Department at the Belarusian State University, has his own view, saying, “A bridge is needed to connect the Chinese economy and the EU economy. The Eurasian Economic Union could be such. I think that our common historical past could inspire us to establish a common economic, scientific, educational and labour space.” Some experts also believe we could share a political and military space.
Of course, sceptics do exist — within the EU and in Belarus, Russia and Kazakhstan. Some cautious views are expressed, with some being afraid that integration is happening too quickly. Having failed to settle all Customs Union related issues, our three countries have shifted to the Single Economic Space. Mr. Kovalev notes that some ‘hidden rocks’ exist. Soon, ‘Russia will join the WTO while the three states of the Customs Union have already co-ordinated all tariffs’; correction is needed.
Discussing the pace and degree of integration, most experts do not doubt that the move’s strategic benefits are obvious, outweighing all current difficulties.
By Vitaly Vasiliev
