Eurasian integration is time imperative

April 11. Kazpravda. Almaty


Eurasian integration is time imperativeEurasian integration, leading to creation of the Eurasian Economic Union, is fully consistent with the interests of Kazakhstan.

The prospects of Eurasian integration was the topic of  the roundtable, initiated by the Institute of Economics at Turan University and attended by reputable scientists , economists, university rectors, leaders of businesses, financial and academic institutions, representatives of NGO and experts .

According to experts, the member-nations of the Eurasian Economic Community have made considerable headway in integration. The integration of national economies opens up ample opportunities and will improve the investment climate in Kazakhstan, Russia and Belarus, improving thereby the environment for business development, helping increase the industrial production volume and giving more jobs.

The single Eurasian space is also an endurance test to the country’s financial institutions, banks, insurance and brokerage companies. But transnational regulator of the Eurasian Union , according to experts , will not be created until 2025. Chairman of Kazakhstan Financiers’ Association Serik Akhanov explained in this connection that in the near future it will first be coordinated with the market, then the Government before it is adopted. The transnational regulator will cover a range of financial sector’s areas: banking, insurance, stock market and development of risk management in financial institutions of the member-countries.

Rector of the Turan University, Professor Rahman Alshanov, emphasized that Kazakhstan is able and willing to create a competitive economy, and it is important for it to develop trade relations to boost the sales market and to forge economic alliances with neighboring countries, which the currently forming Eurasian Union prioritizes. Integration on the Eurasian space will help shore up the national economy and enhance Kazakhstan’s political standing in the world, he believes.

There are more than 300 regional-scale unions, including economic, customs, free economic zones, which suggests that the regional associations are developing even faster than the WTO. Competition is growing, which is why more optimal ways need be sought. At the same time the member-states have natural competitive advantage – the geographical proximity, affinity of the economies and other factors.

An illustrative example of the Customs Union and the Common Economic Space productivity is Almaty, Alshanov said, citing figures: its 2013 external sales with the CU countries made $ 8.6 billion , whereas in 2012 it was $ 7.5 billion. And it is also important, the experts noted, that the national currency – one of the main constituents of the sovereignty – has become stronger and stable, enabling freedom to Kazakhstan in pursuing its own fiscal policy.

It was also mentioned that last year the leading trade partners to Kazakhstan were China and Russia. In terms of turnover, China first surpassed Russia and is set to double the sales with the countries of Central Asia, including Kazakhstan, which accounts for over 70% of their trade in the CA region . Therefore, the meeting emphasized, the creation of sustainable markets is expedient to Kazakhstan. Given the need for new sales markets for the new domestic products, which the booming industry produces and the stiff competition, integration is the right solution, economists say.

Eurasian idea to Kazakhstan implies primarily its closest neighbor – Russia, with which it has a common 7 000- km border and long -established economic and trade ties. Expanding access to the Russian market is to Kazakh businessmen a several-fold increase in output, which requires production extension, additional investment, manpower and new logistics.

Chairman of Kazakhstan Financiers’ Association Serik Akhanov noted that the financial institutions in Kazakhstan are more integrated into the global economy, compared to other CIS members. The meeting also broached the emergence of supranational currency and a supranational regulator for the Customs Union states’ banks, in connection with which Serik Akhanov reminded that the most important and difficult point in integration is harmonizing the policy of financial institutions’ regulation.

Of the 17 agreements relating to the creation of the Eurasian Economic Union, 3 have been signed on macroeconomic, monetary policy and the development of financial markets. This fact actualizes the main question to Kazakhstan Government – how to protect national financial institutions in terms of competition? Firstly, economists say, it is necessary to strengthen the competitiveness of financial institutions themselves, which depends on the size of their assets, management quality and level of risk management system. In addition, financial culture, the culture of savings among the population needs be developed. The universities should prioritize training of professionals in management.

The National Bank and the government are working to create favorable conditions for the financial sector; the concept for development of the financial sector in Kazakhstan is in the making. As Director General of the Belkamit Machinery Plant Pavel Beklemishev observed, “the state and politicians create the conditions and the business must rightly use them. Misuse of these conditions will get us nowhere”.

The meeting adopted a resolution, saying that the emergence of a new Eurasian union, based on free will and equality and purposed to create a mutually beneficial common economic space , is fully consistent with long-term interests of Kazakhstan. It is necessary firstly, under the increasing economic and cultural integration in the global and national economies, the trend towards globalization of the world economy, intensification of competition and other factors.