The Progress and Challenges of Integration within the EAEU and the New Development Paradigm
Integration is to the benefit of all members of the union
Essentially, the fact that Eurasian integration is generating a large amount of interest – and that is clearly apparent at this forum – demonstrates that in fact, despite all the criticism and negative expectations of the EAEU, this is a project which is developing successfully. And indeed, trade between member nations is growing. I always cite the example of two nations which joined the EAEU after Kazakhstan, Belarus, and Russia. They are Armenia and Kyrgyzstan. Note how their levels of trade increased. In Armenia, it increased threefold, while in Kyrgyzstan it grew by 50% over the five years since they joined as members. So, these countries joined, and they clearly derived great benefit from the fact that we have in effect open borders for goods. <...> That is an enormous success in terms of us genuinely becoming increasingly closer — Alexey Overchuk, Deputy Chairman of the Government of the Russian Federation.
Eurasian integration has had a major impact on trade and the labour market
Undoubtedly, Eurasian integration has led to very positive results, and it is continuing to develop as a concept. If we were to list the accomplishments of Eurasian integration, they would include the creation of a single customs area and the ability of citizens of member states to easily access a shared labour market. And in terms of depth and scale, this is a market which is comparable to that of the European Union. A number of EAEU institutions have been established, such as the Eurasian Development Bank and the Eurasian Fund for Stabilization and Development. The EAEU’s regulatory framework is largely based on modern technical regulations – we are already talking about digital transformation. The Eurasian Economic Commission is currently holding talks, and an entire network of trade agreements with third countries have already been created. And without question, the numbers also indicate positive trends. In particular, mutual trade as a proportion of total trade in the EAEU has constantly grown, and has gone from a little over 1% in 2007 to 8.5% in 2019. In relative terms, this is comparable – and even better – than many other regional trade agreements — Alexander Shokhin, President, Russian Union of Industrialists and Entrepreneurs (RSPP); Member, B20 Advisory Caucus.
Targets for EAEU integration in the financial sector are not being met
By 2025, all the targets set out in the 2014 Treaty on the Eurasian Economic Union should have been achieved. So, where are we now? In terms of trade in goods, the figures show that we are at about 75% of the way there. In terms of services and labour resources, we’re at about two thirds – more than 60%. However, the financial market is lagging behind somewhat. Experts have assessed it to stand at about 40% [in terms of progress on KPIs – ed.]. So, more effort clearly needs to be made in this area in order to get it on a similar level and move forward — Mikhail Myasnikovich, Chairman of the Board, Eurasian Economic Commission.
The private sector and fiscal authorities are experiencing issues with introducing electronic navigation seals
Work is under way on an agreement to introduce electronic navigation seals which would allow barrier-free movement of goods within our union and for export. However, it is a complex process. Currently, there are lots of competing views put forward by freight dispatchers and recipients, and by the fiscal authorities. It is not only individual shippers or business entities which are complaining – it is already an intergovernmental matter. That is why we believe that this tool of the electronic navigation seal will mark a big step forward in facilitating the barrier-free movement of goods within our union and for export — Mikhail Myasnikovich, Chairman of the Board, Eurasian Economic Commission.
The level of investment in the EAEU is growing at an insufficient rate
Without question, there are issues surrounding the level of investment. In any case, we don’t have enough competitive goods to replace imports and go to the international market. That is why it is vital to explore the creation of joint ventures and greater investment. We are working very hard on this matter. <...> As our ultimate aim, I would say we need to have a Eurasian import-substitution programme in place — Mikhail Myasnikovich, Chairman of the Board, Eurasian Economic Commission.
Unlocking the vast transit potential of the EAEU
The EAEU possesses enormous transit potential. In order to achieve overall integration, and to strengthen [it – ed.], we need <...> to integrate elements of technological infrastructure with customs related economic aspects. We also need to have seamless transit corridors. Indeed, given our nations’ geographic position, we could in fact build two transit corridors. A northern corridor would go through Europe, the EAEU and Western China, while a southern corridor could connect Turkey with Azerbaijan, the EU, and Northern Europe. In order to achieve integration and build <...> seamless corridors, we need to implement <...> comprehensive technology solutions. Firstly, we must work together to create a common electronic document management system. <...> Secondly, we should identify where the main unresolved issues lie. In terms of rail freight, we can say that trains do not experience many [holdups – ed.]. Of course, time is spent at the station, and during sorting. Together with Russian Railways, we have developed a project which is today being implemented. Entitled ‘Digital Station’, it will pave the way to robotize around 17 operations, and also to robotize the station itself, which will control the switcher — Igor Rotenberg, Russian Entrepreneur; Chairman of the Board of Directors, National Telematic Systems.
Ensuring the Eurasian Development Bank supports integration projects which can bring benefit to several member states at once
I would like to speak about the role of the Eurasian Development Bank and the Eurasian Fund for Stabilization and Development in the development of the EAEU. We work for the benefit of our shareholders, which include the five EAEU member states and Tajikistan. This year, as we mark the 15th anniversary of the bank <...> we have adopted a strategy which naturally aims to meet the requirements of our shareholders to the greatest possible extent with regards to facilitating economic growth in our union. It seems to me that at this stage, it is very important that we add a full economic agenda and genuine integration projects to our union. In all likelihood, this will be the main focus of the strategy we’re adopting this year. What project-based work would I consider to be most important and relevant? I call them ‘end-to-end integration projects’. They are projects which encompass several states, which create multiplier effects for said states, and which form an economic framework for the Eurasian Economic Union — Nikolai Podguzov, Chairman of the Management Board, Eurasian Development Bank.
Having union member states work in close cooperation with business
The business community is working actively and successfully with the Eurasian Economic Commission. <...> An advisory board focusing on interaction between the commission and the EAEU’s business community is facilitating this process, as are a number of other bodies. Without question, we must also draw attention to our new stage in increasing integration. I am referring to the adoption of the 2025 Strategy, which will create new opportunities in this area. As you know, a road map was adopted in the development of this strategy, which contains many points of interest [to – ed.] the business community too — Alexander Shokhin, President, Russian Union of Industrialists and Entrepreneurs (RSPP); Member, B20 Advisory Caucus.
Shared approaches to regulation within the union, which will make it easier to do business
We [the ASI – ed.] work with union members across several different areas. I believe that we need to create a comprehensive offering for the EAEU from the point of view of partnership and formulating new shared best practices across completely different areas. Again, we need to develop shared approaches to regulation. <...> In this regard, we are also ready to work together with colleagues and different regions to examine these approaches in terms of regulation pertaining to our entrepreneurs and investors working in the EAEU. These approaches should be of equivalent worth and significance, and an entrepreneur should be able to understand the rules of the game as they pertain to countries – our territories. I think this could lead to real success and a substantive contribution — Svetlana Chupsheva, Chief Executive Officer, Agency for Strategic Initiatives.