June 12, 2018 in Bishkek, a research and practical discussion “The role of Kyrgyzstan in the concept of “Greater Eurasia” took place. The event was held at the Academy of Public Administration under the President of the Kyrgyz Republic. It was organized by the educational institution, in cooperation with the “Eurasianists – New Wave” Foundation, the “Pikir” Regional Experts Club with the support of the analytical portal “Eurasian Studies”. Leading Kyrgyz, Russian and German economists and political researchers from Bishkek universities, Kyrgyz entrepreneurs, representatives of relevant departments of the Kyrgyz Govermnent, heads of NGOs and the media participated in the event.
Giving a welcome speech, the rector of the academy Almaz Nasyrov dwelt on the relevance of the event. “Thanks to joining the Eurasian Economic Union, we have, on the one hand, the opportunity to develop the economy, and on the other – the prospect for humanitarian cooperation with the member countries of the Union. Now on the agenda new questions are brought out. Quite a lot is said about the Chinese project “One Belt – One Road” and its conjunction with the EAEU. The recent visit of the President of Kyrgyzstan Sooronbai Jeenbekov to China was indicative. We once again became convinced that cooperation with China will intensify”, the speaker emphasized.
As the organizers of the meeting explained to the participants, the above-mentioned concept is aimed at linking regional integration processes throughout the Eurasian continent and creating, as a result, a common space “from Lisbon to Shanghai”.
“We […] suggest thinking about creating a Greater Eurasian Partnership with the participation of the Eurasian Economic Union, as well as countries with which we already have close relations: China, India, Pakistan, Iran. And of course, I mean our partners in the CIS, other interested states and regional blocks”, the Russian president Vladimir Putin stated on 17 June 2016 at the SPIEF.
During the discussion, it was stressed that “Greater Eurasia” represents an attempt to form a new geopolitical community – a wider Eurasian development space, to overcome differences between economic and political partners that have remained since the Cold War. As the most important guarantor of such rapprochement, the initiators propose the creation of a system of international agreements excluding the possibility of domination of any one power over the rest in the region.
The following issues were discussed during the event:
- Key aspects of the Greater Eurasia / Greater Eurasian Partnership concept;
- Opportunities for Kyrgyzstan from the creation of a common economic, humanitarian space of Greater Eurasia;
- The place of Kyrgyzstan in the projects of the China – EAEU – EU transport corridors.
One of the organizers of the meeting, head of the Eurasian sector, CCEIS, HSE, editor-in-chief, analytical media “Eurasian Studies” Yuri Kofner. As a researcher at the International Institute for Applied Systems Analysis (IIASA) in Vienna, Austria, he told the participants about the main challenges and prospects for the Kyrgyz economy, that can be expected from the implementation of the concept of a common economic space of the EU and the Eurasian Economic Union.
From such potential cooperation the EU would aim at obtaining the following benefits: trade liberalization, i.e. increase in European exports; the introduction of a national regime for European businesses and the improvement of antimonopoly regulation (facilitated access to the Eurasian market); energy security (from the supply side).
The interests of the EAEU would include protection of sensitive and uncompetitive industries; attraction of European investments; transfer of technologies for the modernization of the economy; and energy security (from the demand side).
“The Munich-based ifo Institute conducted an econometric analysis of the impact that the creation of a free trade zone between the EU and the EAEU could have on Kyrgyzstan. Models show that GDP growth would be approximately 2.3 percent annually. Each Kyrgyz resident would have an additional 25 euros of income each year. But this would be possible provided that the tariff and non-tariff barriers between the EAEU and the EU would be completely removed”, Yuri Kofner stressed.
“The analysis shows that the sugar industry could benefit the most from the creation of an EU-EAEU FTA. The volume of production could grow almost 4 times. It would also be possible to increase sales of vegetables, fruits and nuts. But it is worth remembering that production in Kyrgyzstan does not meet the requirements that exist in both the EAEU and in the EU. This applies to laboratories to determine the quality of products. If Kyrgyzstan fulfills all the conditions, if it will comply with the regulations of the Eurasian Economic Union, then from a technical point of view it will have a chance to enter the European market”, the expert concluded.
“The recently concluded agreement on trade and economic cooperation between the EAEU and China, I would call an interactive platform for a phased reduction of non-tariff barriers,” Yuri Kofner, researcher at IIASA, said at the roundtable. According to him, the document gives a general idea of those areas where the parties could cooperate. However, practical obligations in it are not prescribed. Instead, a simple mechanism is outlined that defines the creation of various working groups.
The deputy director of the branch of the “Eurasianists – New Wave” Foundation in Kyrgyzstan, political scientist Denis Berdakov, made a number of recommendations on the most preferable ways of integrating Kyrgyzstan into the economic trends of Greater Eurasia: “We are, first of all, the center of the continent – Central Asia and its complex geographic and the political environment, where the interests of global players converge. From the European point of view, the main threats for the region are terrorism and drug trafficking from Afghanistan, Pakistan and the Arab world”.
“At present, the Chinese Belt and Road Initiativeis the only international project aimed at developing the transit potential of Central Asia. The concept, put forward by the Chairman of the People’s Republic of China Xi Jinping, is not an integration project of an exclusionary nature, but an open-type cooperation project. This concept does not exclude the existing mechanisms of regional cooperation such as the Eurasian Economic Union. However, the countries of the EAEU will need to coordinate among themselves actions with regard the BRI. Otherwise, this conjunction, which is being talked about a lot, can be reduced to a set of bilateral projects between Beijing and the Central Asian countries. In addition, the US is trying to build a “New Silk Road” in Central Asia, which should connect the region not horizontally, but vertically, and withdraw the goods of Central Asia to the Indian Ocean”, the political scientist said.
According Berdakov, the fate of Greater Eurasia as a single space depends on the “share of the flow of goods, which will pass through it by land”.
The co-chairman of the “Pikir” Regional Experts Club, political scientist Igor Shestakov shared the prospects and problems of implementing integration projects of the EAEU. “Last year the Eurasian Economic Commission published a remarkable work, the so-called “White Paper “, containing information on the obstacles to free trade within the internal market of the EAEU. In total, the document recorded 60 obstacles that hinder deeper integration within the Union. I want this work to be really continued and completed. As for our country, at international forums, Kyrgyzstan is often remembered as a country of the Eurasian Economic Union with the largest concentration of illegally imported goods. Immediately participants of such forums begin to recall contraband in the market “Dordoi”. Conscientious entrepreneurs should not suffer because of this negative image. The road for counterfeit products must be closed”, Shestakov noted. The political scientist also added that the fight against smuggling should not become a political tool. “One can not allow one country to play a role in the economic destiny of another. I think that these issues will be resolved this year. After all, Russia, presiding in the bodies of the EAEU in 2018, gives them special attention”, the expert concluded.
Professor Zhumakadyr Akeneev. Dr. Sc. (Economics) proposed to develop public-private partnership in Kyrgyzstan. “The Fund for the Management of State Property of the Kyrgyz Republic has data on the book value of assets of 226 state-owned enterprises and joint-stock companies with state ownership. Their total cost, according to the documents, is $ 8.7 billion. However, individual objects cost 100 times more. For example, the Toktogul HPP estimated at $ 1.3 billion, according to expert opinions, costs more than $ 240 billion. Therefore, now in the KR more and more people come to the idea of creating a development fund for Kyrgyzstan, which would work on the principle of public-private partnership. We need to attract private capital. Naturally, the benefit of a private partner is to make a profit, as in any other commercial project. Without benefit, no private person will come to PPP. In partnership with the state partner, the private enters the sphere where he could not enter before that. Since this is a traditional sphere of public services, for example, energy or health. Therefore, it is profitable for a private partner, since he will have an advantage in the new sphere and support from the state. The state, in turn, receives innovative technologies and effective management tools”, argued the economist.
In turn, the chairman of the Committee for Industrial Policy, Export, Infrastructure of the Chamber of Commerce and Industry of the Kyrgyz Republic, economist Kubat Rakhimov informed his colleagues about the main prospects for the formation of transport infrastructure as a driver of the economic development of the EAEU. “It is necessary to study what role Kyrgyzstan can have in the global transport system, analyze what to import, how and for what. Only a limited range of goods is profitable when transporting from Asia to Europe and even more so in the opposite direction. Speaking of Chinese products, I would like to focus on shoes. It is shoes from China that must be transported by land, because it spoils from transportation by sea, and it turns out to be too expensive for the plane. This is a potential niche, which must be made a full re-export direction”, the expert said.
The speakers came to the conclusion that the Kyrgyz Republic already now has to develop a strategy for the most optimal combination its national interests as part of the Eurasian Economic Union and the “Greater Eurasian Partnership.”