More Economic Initiatives As Russia Assumes EAEU Chairship – OpEd

Russia takes over this year the rotating chairmanship of the Eurasian Economic Union (EAEU) – an organization that unites Armenia, Belarus, Kazakhstan, Kyrgyzstan and the Russian Federation. It was created by treaty that entered into force on January 1, 2015. 

Its key objectives include increasing cooperation and economic competitiveness for the member states, and the promotion of stable development in order to raise the standard of living in member states. 

The principle of free movement of people, goods and services are far being implemented. The region has no single currency. At this stage, it appears it has some glaringly obvious limitations. The members harbour deep sentiments of subjugation, and are concerned about Russian influence, especially after the Russian invasion of Ukraine. 

In the new emerging global economic order, the Eurasian Union members are still struggling to deal with their internal issues and most importantly their post-Soviet slippery or thorny relations with Russia. But, in his New Year message, President Vladimir Putin expressed confidence that they would work together to further enhance multi-dimensional cooperation and continue their coordinated work within the EAEU.

Earlier in December the five members gathered primarily to review performance, discus challenges and set future plans. At that Bishkek summit, a package of documents was signed. In addition, decisions were made to continue the creation of a single market of services within the EAEU.

The discussion focused on the EAEU activities, prospects for the further deepening of integration processes, in particular improving the operation of the single market for goods and services. The participants also adopted an instruction “On the sources and mechanisms for financing industrial cooperation projects within the Eurasian Economic Union.”

“Our integration association has performed effectively and continued to grow steadily. In the context of volatile global markets and an unfavourable global political situation, it has taken timely and effective steps to not only stabilise the macroeconomic situation in our countries, but also to improve a number of important development indicators, stimulate growth in key economic sectors, and support the economic ties that have developed within the EAEU,” Putin noted at the meeting.

In particular, the unemployment rate for the first nine months of 2022 in the EAEU states decreased very noticeably – by 18 percent – and is slightly above one percent, 1.1 percent of the workforce. Agricultural production rose 5.4 percent, which is a very noticeable and very good growth. This is all the more important amid the growing food crisis in the world, which is certainly unfortunate.

The amount of construction has grown by as much as 4.7 percent. This is also a very good indicator, considering that construction drives a lot of other industries. The total increase in investment in fixed assets reached 6.6 percent, which is also very good. By the way, economic development as a whole, has experienced a 20 percent decline in the economy. In 2023, it will move in the positive direction.

Uninterrupted trade in all vital goods in the EAEU has been ensured. The EAEU has adopted a number of fundamental decisions aimed at removing the remaining customs and administrative barriers. Meanwhile, work has accelerated in the transition to national currencies in mutual settlements. The process of creating a common payment infrastructure and integrating national systems for the transmission of financial information has begun.

The five states are closely cooperating in the field of transport and logistics; the volume of mutual freight transport is growing, largely to the additional arrangement and the increase in the capacity of border crossings between our countries. Although here, of course, there is still work to be done.

The EAEU is carrying out a number of integration infrastructure projects aimed at creating and effectively using the East-West and North-South international transport corridors. It will continue to successfully develop mutually beneficial industrial cooperation. 

It has now adopted a decision to establish a new specialised industry financing mechanism in the EAEU. This mechanism will make it possible to grant loans and subsidies to promising joint projects, including those related to setting up import substation-oriented production facilities.

Cooperation in energy is developing ever more actively. Following that meeting, a decision was made to establish a council of heads of authorised bodies of the EAEU states in energy. 

Russia, naturally, supports the creation of the coordinating structure which will professionally deal with the issues related to providing national economies with key energy sources and creating common energy markets on a long-term basis for the EAEU. 

As Russia assumes the chairmanship the Eurasian Economic Union, a broad future priorities have been outlined.

First of all, the necessary to update the strategic benchmarks of EAEU development. The current basic document, Development Areas of Economic Integration, covers the period until 2025, and it is important to begin drafting new strategic planning documents that chart the main goals for further integration and interaction in the medium and long term.

The second is strengthening the technological sovereignty of the EAEU member states and creating a common foundation for innovation in key sectors including industry and agriculture. 

Third, to continue efforts to jointly introduce information technologies, including in electronic document flow, the automated exchange of transport and customs information between the agencies and carriers of the member states, as well in product labelling and traceability. These are the areas where digital solutions already have been helping to prevent the turnover of unsafe and substandard products on the Union’s market.

The next is that the five members concentrate on building up investment cooperation, creating favourable conditions for mutual investment, simplifying relevant administrative procedures and enhancing guarantees for protecting the rights of investors. It is believed that the simultaneous introduction of advanced tax control mechanisms for aligning tax regulations in the EAEU should be an integral element of this work.

Naturally, Russia would intend to expand scientific, technical and educational contacts. It is about new ideas and initiatives to encourage the practice of inter-university cooperation and upgrade the practical training and academic exchange programmes. It is useful to involve more young specialists in the integration agenda via student tourism programmes, the promotion of common historical, social and ethical values, and support for joint youth projects in entrepreneurship, volunteering, culture and sports.

As the Eurasian Economic Union and its integration work in general are attracting the attention of more and more international players, and many foreign states are interested in developing ties with the association. There was the proposals to expand this work, including with regional structures, such as the SCO and ASEAN.

Russia welcomes the invigoration of the EAEU’s international business ties and contacts. It will help further expand the range of preferential and non-preferential agreements with foreign partners. The next regular meeting of the Supreme Eurasian Economic Council and at the Eurasian Economic Forum are tentatively planned for May 24–25, 2023.