First Vice PM Sagintayev: EEU - important strategic project

vASTANA. KAZINFORM - Kazinform news agency offers its readers a comment made by the First Deputy Prime Minister of Kazakhstan Bakytzhan Sagintayev on the upcoming signing of the Treaty establishing the Eurasian Economic Union, published in the republican newspaper "Kazakhstanskaya Pravda".
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First Deputy Prime Minister of the Republic of Kazakhstan Bakytzhan Sagintayev

This year could be called a milestone for the integration process. Tomorrow, May 29, the Presidents of Kazakhstan, Russia and Belarus will sign an agreement on the establishment of the Eurasian Economic Union (EEU). In March 1994 the Kazakh leader announced the idea of the Eurasian Union at MSU. Back then it was of no interest to his colleagues. Clearly, Nazarbayev was ahead of time. Today the Eurasian Economic Union (EEU) is almost established.

Nazarbayev suggested declaring the day of signing the treaty the Day of Eurasian Integration and to make Astana a capital of the union. He emphasizes that the EEU has nothing in common with the USSR and is not its mythological "copy," as the USSR "completely filed as a history." The EEU will be an economic project only - without infringement on political independence.

Preparation for the event took long time. Back in November 2011, the Presidents of Kazakhstan, Russia and Belarus have set a goal to get [prepared for the signing of the treaty by January 1, 2015. Since then, much has been done on preparation, improvement and harmonization of the draft global treaty that is currently ready for signing.
As I mentioned above, Eurasian economic union is not a political union. The subjects of the contract are exclusively questions of economic cooperation.

The union will have two permanent bodies - the Eurasian Economic Commission and the court. The Commission will consist of two levels - the council and the board. The Council will be represented by three Deputy Prime Ministers. The board will join three representatives from each state. The Court of the Union will be consisting of six judges (two from each state).

I would like to note that we are entering a new level of equal economic partnership which opens up great opportunities for the economy of our country.

The process of the Eurasian economic integration has led to positive changes in the economy of Kazakhstan. First of all, it is an opportunity to boost competitiveness. An opportunity to join economic potentials and establishing joint productions surpass expenditures which appear at initial stages of establishing a major union.

Thus, since the establishment of the Customs Union (CU) the volume of foreign investments in the manufacturing industry in has increased almost twice reaching USD 3.4 billion in 2012, compared with USD 1.8 billion in 2009.
While total foreign direct investment grew by 34 % to USD 28 billion. Kazakhstan's trade turnover with Russia and Belarus in 2013 exceeded USD 24 billion (in 2011 - USD 23.0 billion, and in 2012 - USD 23.8 billion).

In general, for the entire period of the CU operation, trade with the member-states has increased by 88.3%.
In the period from 2010 to 2013 the average annual growth rate of trade turnover was 18.4 %.
Since the establishment of the CU exports to partner countries increased by 62.7%. The share of processed goods in total exports to the countries of the Customs Union increased from 44 to 54 % (USD 3.2 billion in 2013).

There are positive developments in production of vehicles, finished products of iron or steel, plastic, rubber, paper, and household appliances. There are concerns that Russian and Belarusian enterprises may pressurize domestic producers. I would like to note that Kazakhstan has made arrangements to develop by 2016 a new methodology of calculation of state support for agriculture based on international principles.

Kazakhstan is a country distant from major markets and it has no outlet to the sea ports.
In this regard, it is important for Kazakh exporters to have access to transport infrastructure of the partner countries. In addition this opportunity will contribute to reducing transport costs and increasing the competitiveness of Kazakh products in third markets.

We agreed that the formation of a common market of oil and petroleum products will be implemented step-by-step by 2025. As a result, the mutual trade will not apply export duties and restrictions.
Common electricity market is planned to be launched by 2019 through the integration of national electricity markets of Kazakhstan, Russia and Belarus.

As part of the gradual formation of a common energy market there will be developed a concept (before July1, 2015) and a program on the creation of common electricity market (before July 1, 2016), which will be approved by the Supreme Economic Council at the level of Heads of States.

Total pharmaceutical market will start operation in 2016. At the same time the Kazakh side has defended the need to form the market on the basis of appropriate standards of pharmacy practice. Corresponding agreement will be developed and signed no later than January 1, 2015.

In addition, service markets to be established in the framework of the Eurasian Economic Union.
Liberalization is supposed to be carried out on the basis of "road maps" in accordance with the decisions of the heads of states.

To implement internal programs we have achieved industrial revision of pre-existing agreements and gained the right to use specific industrial subsidies without prior approval from the Commission.

Working on the draft treaty we cooperated with business community in the face of the National Chamber of Entrepreneurs which unites more than 800 thousand businessmen.

Eurasian integration will help Kazakhstan to realize the strategic objective, outlined by the Head of state, entering top 30 developed countries.

President Nursultan Nazarbayev has clearly stated that 'economic integration will strengthen national statehood, make Kazakhstan more stable through the development of the economy'.

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