EAEU plays the role of a shock absorber of external shocks

_ Evgeny Vinokurov, PhD (Economics), director, Center for Integration Studies, Eurasian Development Bank. Bishkek, 15 September 2017.

At a meeting with Vladimir Putin, President Almazbek Atambayev once again discussed the results of Kyrgyzstan’s participation in the EAEU. I believe that, despite all the difficulties, the Eurasian Economic Union plays the role of shock absorber of external shocks for all its participants.

The EAEU is a young integration association. It was created on the basis of a certain understanding of the long-term political and economic goals of the participating countries. In addition to solving geopolitical problems, the goal of the EAEU is to help countries realize the potential of economic ties within the region, modernize national economies, and create conditions for increasing global competitiveness.

Eurasian economic integration demonstrates serious success. There is a Customs Union and a common customs tariff, a common labor market is forming. One by one, the old All-Union standards are replaced by new technical regulations, an additional «Eurasian integration infrastructure» is functioning — the EAEU court, the Eurasian Development Bank, the Eurasian Stabilization and Development Fund.

The past year didn’t stop the negative dynamics in mutual trade. At the same time, the rate of decline of indicators for the EaEU countries was significantly lower than outside the union.

At the same time, there are limitations for further development. In 2015-2016, the phase of rapid initial progress came to an end. This is indicated by complex processes of coordinating positions on the Customs Code and the general market for medicines and medical products. Both topics were the most important in 2016.

The EAEU, to some extent, plays the role of a «shock absorber» of the negative impact of external shocks. The volume of intra-union trade decreased by 6.7 percent compared to the fall in foreign trade turnover by 12 percent. The dynamics of foreign trade in Armenia should be noted. In 2016, exports of this country in value terms increased by 20 percent, in the countries of the EAEU — by 53 percent. The export of this country to Russia grew by 51 percent, to Kazakhstan — by 43 percent, to Belarus —2.1 times. Mutual investments in the EAEU rose by 8 percent in 2016 after three years of falling.

The dynamics of foreign trade of another new member of the EAEU — Kyrgyzstan — was also positive. Exports to the EAEU countries increased by 4.4 percent in 2016, exports to third countries — by 5.2 percent.

The Union is actively working to reduce the level of non-tariff protection of the markets of the EAEU. 81 obstacles have already been eliminated. But over 450 obstacles still remain. About 80 percent of them are with exemptions and restrictions. The rest don’t actually comply with the norms and legal field of the EAEU.

The pragmatic approach to Eurasian integration is based on understanding it not as a goal, but as an instrument for solving the economic problems of the states involved, the most important of which today is the modernization of economies.

Source: https://24.kg/

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