Five years Eurasian Economic Union: challenges, accomplishments and prospects. Part I. Economic development of and living standards

_ Jurij Kofner, head, Eurasian sector, Centre for Comprehensive European and International Studies, Higher School of Economics; research assistant, International Institute for Applied Systems Analysis, IIASA (Vienna)[1]. First published for the Institute for Security Policy (ISP). Vienna, 5 August 2019.

Being preoccupied for the past five years with serious challenges to the future of European integration, such as Brexit, immigration, the Eurozone, the Ukrainian crisis, rising international populism and protectionism, EU policy makers had little time to pay attention to the fact that regional integration to the east of the European Union had been making strides forward.

On 29 May 2014 the heads of three core post-Soviet states – Belarus, Kazakhstan and Russia – signed the Treaty on the Eurasian Economic Union (EAEU), which a year later was joined by Kyrgyzstan and Armenia, after the later rejected the planned Association Agreement (AA) with the EU and then replaced it in 2017 with a Comprehensive and Enhanced Partnership Agreement (CEPA).

The Eurasian Economic Union is a formally supranational trade and economic bloc that aims to create a common internal market based on the free movement of goods and services, labor, capital, and enterprise. In 2019 its nominal collective GDP was $1.9 trillion with a population of 184 million.

In 2019 the EAEU is officially celebrating its five-year anniversary. The aim of the subsequent four articles is to look into the following questions: What have been the achievements of this new integration project so far? Which challenges does it still face? Is it even a viable rules-based organization or is it rather “a club of autocrats”, which is “doomed to failure”, as some commentators would periodically predict? What are its prospects for its next “five-year cycle”[2]?

There are different ways for approaching these questions. In these articles we have chosen a simple, but logical way of looking at the EAEU’s three main objectives, outlined in the EAEU Treaty (Box 1), and then to check to which extent they have been achieved, where there are still challenges and also what could be done to accomplish them in the future.

In the last, fourth, article we will also outline current trade and economic relations between Austria and the EAEU and give policy recommendations concerning the idea of a common economic space “from Lisbon to Vladivostok”.

Box 1. Objectives of the EAEU

Article 4

Main Objectives of the Union

The main objectives of the Union shall be as follows:

1.      to create proper conditions for sustainable economic development of the Member States in order to improve the living standards of their population;

2.      to seek the creation of a common market for goods, services, capital and labour within the Union;

3.      to ensure comprehensive modernisation, cooperation and competitiveness of national economies within the global economy.

Source: Treaty of the EAEU (2014).

Question 1. Did the EAEU create proper conditions for sustainable economic development of the member states in order to improve the living standards of their population?


In order to answer the first question, in this article, we will first analyze the institutional framework of the Eurasian Economic Union. Then we will check how the Union’s performance changed according to international business ratings. Finally, we will review its main socio-economic indicators from 2014 to 2018.

Institutional setup


The EAEU has four administrative bodies, the top three out of which make intergovernmental decisions and only one supranational body – the Eurasian Economic Commission (EEC) with its board of 10 supranational ministers is responsible for different sectors of the Union’s economy, akin to the European Commission (EC) with its commissioners. It also has its own court, as well as an affiliated development bank and fund.

From an institutional standpoint, the EAEU is the world’s second most integrated regional bloc after the EU (Box 2). However, after the collapse of the USSR, reluctance of the post-Soviet national leaders to delegate powers to yet another supranational body means that Eurasian “reintegration” is still largely intergovernmental in nature. This condition limits the EAEU’s governance not only legally, but also financially and in manpower.

Box 2. Bodies of the EAEU and the EU in comparison

EAEU EU
Supreme Eurasian Economic Council – convenes biannually the heads of state and responsible for strategic decision making. European Council (Concilium)

 

 

Council of the European Union

Eurasian Intergovernmental Council – consists of the heads of government and in charge of coordinating national policies.
Council of the EEC – consists of the deputy heads of state.

Board of the EEC – with 10 supranational ministers in charge of various economic sectors (customs, transport, digitalization, etc.) and its ca. 1000 employees (situated in Moscow).

European Commission
Court of the EAEU (based in Minsk) Court of the EU
Eurasian Development Bank (EDB) and Eurasian Fund for Stability and Development (EFSD) with formal headquarters in Almaty – main regional development institutes important for investments in infrastructure and integration projects, as well as for regional macroeconomic stability. European Investment Bank

 

European Regional Development Fund

 

European Fund for Strategic Investments

 

European Stability Mechanism (ESM)

Financial regulator of the EAEU (to be created by 2025 in Astana) – control of the common financial market.

European Central Bank (ECB)

Source: Compiled by the author.

The Eurasian Economic Union covers a territory 4.5 times the size of the European Union. Still, the EAEU’s administrative bodies employ a staff force, which is 60 times smaller than that of its European neighbor (Table 1). Only ASEAN has a smaller staff at its disposal.

At the same time, the EAEU’s annual budget is 0.01% that of the European Union. Even the budget of the African Union is 5 times larger than that of the Eurasian Economic Union[3]. Only MERCOSUR and ASEAN have a smaller annual budget (Chart 1, Table 2).

Chart 1. Comparison of the annual budgets of major regional integration blocs (2017-2019, $ mln)

Source: Authors calculations based on official data of the regional integration bloc’s respective administrative bodies. *MERCOSUR Secretariat and Parliament budget only.

Even though Russia “dominates” the Eurasian Economic Union economically (87% of its GDP), demographically (80% of its population) and geographically (85% of its territory), one can argue that formally it does not do so politically, since decisions on EAEU policy have to be made by consensus and are limited to a purely economic agenda. Each member state has an equal voice regardless of its GDP or population size. This “cooperative hegemony”, as it is called, can be understood as a binding contract between the regional center, in this case Russia, and the periphery, i.e. the other EAEU member states: the first agrees to some preferences and follows the policy of a certain self-restraint in exchange for the loyalty of the second.

Due to this administration structure, the supranational component of the EAEU is rather weak, and the Union is dominated by intergovernmental modes of decision making. In this hierarchy the supranational EEC Board occupies the lowest level, below three intergovernmental bodies. Thus, the Union’s governance can also be defined as intergovernmental liberalism. On the one hand, this limited supranationality impairs the decision-making process and slows down integration. On the other hand, liberal intergovernmentalism is a mode of regional integration, which, under the given history, is most suited for the independent states of the post-Soviet space.

As already said, the Eurasian Economic Union is concerned with economic matters and the EEC officially covers a broad aspect of economic policy. However, de-facto its powers are rather limited to areas such as tariffs, trade remedies, product conformity, sanitary and phytosanitary measures, as well as trans-border competition.

At the same time, one should not underestimate that for the first time in history the EAEU in itself is a completely peaceful and voluntary, as well as, arguably democratic, equal and market-based, unification of the countries and peoples of the Eurasian space, same as the EU is to Europe.

The headquarters of the EEC looks nothing like an old-fashioned Soviet style ministry, but rather like a modern office of some global consulting company. With such an atmosphere going for it, the EEC is constantly trying to study and potentially implement the best international practices, standards and policies.

Based on the EU experience and WTO rules, the EAEU is aimed, at least in its intentions, at creating greater legality and a more rigorous institutionalized setting by which its member states should abide. The EAEU has international legal personality and enforces its own system of Union-wide law. However, the EAEU Court has shown mixed results so far and one cannot declare the existence of a Eurasian “acquis communautaire” as of yet.

On the one hand, we see positive developments in EAEU legal practice. Firstly, in recent rulings the court proclaimed the principles of direct applicability and direct effect of EAEU Treaty provisions, which is an important aspect of legal supranationality. Secondly, there has been a growing number of requests for clarification of the provisions of EAEU law by EAEU member states and bodies indicating the increasing role of the court. Thirdly, in 2018 for the first time a company won a case in the court, thus creating more confidence by economic agents in the Union’s court and common legal space[4].

At the same, the Eurasian legal system is still in the making. The EAEU Court’s jurisdiction is rather limited and its scope can be compared to that of the European Court of Justice before the 1980’s. Firstly, the EEC cannot file a case in the court to seek enforcement of EAEU law by a member state. Secondly, national courts cannot ask the EAEU Court for preliminary rulings, i.e. they cannot request the court to interpret union law. Without such a procedure, national courts may end up interpreting Union law differently.

Currently the member states are negotiating over amendments to the EAEU Treaty, which would add the possibility of majority voting and expand the powers of the Eurasian Economic Commission in certain areas. The EEC itself has asked the member states to approve the creation of a separate agency and fund, which could finance innovative start-ups and industrial cooperation. The idea of creating a “Societae Eurasica”, i.e. of a Union-wide commercial legal personality with special subsidy rights, are also on the table.

These steps should be well greeted. However, before creating new institutions and along with expanding supranational powers, one should more importantly increase the staff and budget of the EAEU’s governing bodies. No less important would be to strengthen intergovernmental communication, which is necessary for an efficient stipulation, negotiation and implementation of EAEU policy. One way to achieve this would be to transfer this function to an institute of permanent government representatives with the EEC Council, similar to the EU’s COREPER I and II, which would perform the preliminary coordination of positions between governments and transform it into a constant, straight-forward and transparent process.

International rankings


At the beginning of 2019, the Eurasian Economic Commission published a report that analyzes the positions of the EAEU member states in 16 international ratings, which assess various spheres of economic development for the period from 2010 to 2018[5].

In 2017-2018 the EAEU countries performed the best in the following ratings: Armenia entered the top 30 countries of the world (29th place) in the Fraser Institute’s “Index of Economic Freedom”. Belarus is in the top 5 countries in the “Doing Business” ranking (Chart 2, Table 3) in terms of “property registration” (5th place). Kazakhstan entered the top 30 countries in the “Doing Business” ranking (28th), and also ranked 1st and 4th in terms of protecting minority shareholders and enforcing contracts, respectively. The Kyrgyz Republic is in the top 10 countries in the “Doing Business” ranking in terms of “property registration” (8th place). The Russian Federation entered the top 20 countries in the “Doing Business” rating in terms of “connection to electric networks” (12th place), and is also in the top 30 countries of the world (22nd) in terms of human capital and innovation research of the “Global Index innovation”.

According to the study, the EAEU overall occupies the highest positions (index values) in the following areas:

Macroeconomic stability:

  • Reliable money: money supply growth – 8.66 on a 10-point scale, standard deviation of inflation – 8.83 on a 10-point scale (Fraser Institute Index of Economic Freedom);
  • Credit market regulation: loans to individuals – 8.48 on a 10-point scale, control over interest rates – 9.84 on a 10-point scale (Fraser Institute Index of Economic Freedom);
  • State of the fiscal system: 87.2 points on a 100-point scale (Heritage Foundation Index of Economic Freedom).

Business climate and investment attractiveness:

  • Creation of a new business: 9.68 points on a 10-point scale (Fraser Institute Index of Economic Freedom);
  • Cost of compliance with tax laws: 8.1 on a 10-point scale (Fraser Institute Index of Economic Freedom);
  • Tax burden: 86.6 points on a 100-point scale (Heritage Foundation Index of Economic Freedom);
  • Connection to electric networks: 19 out of 190 economies (“Doing Business” rating);
  • Property registration: 12th place out of 190 economies (“Doing Business” rating);
  • Enforcement of contracts: 17 out of 190 economies (“Doing Business” rating);
  • Ease of getting loans: 28 out of 190 economies (Doing Business rating).

Chart 2. EAEU in the “Doing Business” rating (2014-2018)

Source: World Bank Group.

Human potential:

  • Education: 28 out of 149 economies (Prosperity Index);
  • Human capital: 0.8506 p. On a scale of 0.001 – 0.999 (e-government development index).

Foreign trade potential:

  • Freedom of foreign trade: the average tariff rate – 8.5 on a 10-point scale (Index of Economic Freedom of the Fraser Institute);
  • Market size: 11 out of 137 economies (Global Competitiveness Index).

Digital economy:

  • Availability of information and communication technologies: 10th place out of 139 economies (Network Readiness Index);
  • E-government development: 33 out of 190 economies (e-government development index).

In comparison with developed economies, such as the USA and Germany, the EAEU is in lower positions in all considered ratings. At the same time, for example, in ratings by the Fraser Institute and the Heritage Foundation, the Doing Business rating and the Human Development Index the EAEU ranks higher than the BRICS countries, Vietnam and several post-Soviet states.

The EAEU’s positions are rather weak in the following areas: international trade (Doing Business rating); income inequality (Inclusive Development Index); customs performance (Logistics Performance Index); access to domestic and foreign markets (Index of countries’ involvement in international trade); quality of governance (Bertelsmann index). Here further implementation of integration measures and international cooperation could be promising.

Within the Union member states could exchange their best regulatory practices in the following fields: quality of institutions, efficiency of logistics and customs administration, development of innovative potential and human capital.

Socio-economic indicators


Having analyzed at the Union’s institutional setup and its business climate according to various international ratings, we now would like to focus our attention on the question, if the EAEU was able to promote stable economic development and improve the living standards of its citizens.

Economic growth and sustainability

While the EAEU’s real GDP fell from 2.4 trln in 2014 to 1.9 trln in 2018, its GDP by purchasing power parity (PPP) actually grew from $4.4 trln to $4.7 trln (Chart 3, Table 4). This discrepancy in numbers can be explained by a sharp devaluation of the national currencies of the member states against the US $ in 2014-2015 (Chart 4, Table 5).

Chart 3. EAEU GDP (2014-2018; nominal, real and by PPP; trillion $)

Source: EEC Statistics Department and author’s calculations.

Chart 4. EAEU member states annual average exchange rate change (2014-2018, units of national currency against the US $, % change y.o.y.)

Source: EEC Statistics Department. *1 July 2016 Belarus changed the denomination of the Belarusian ruble by a ratio of 1:10 000.

In 2014-2015 the Union’s largest economy – Russia – was hit by several adverse factors:  the Ukrainian crisis, international sanctions and a drop in oil prices, which also directly affected Kazakhstan. This led to a recession in the Russian Federation, and consequently in the other member states, which rely on the remittances and consumption from Russia. In 2015 its economy contracted by 2.5%, that of Belarus by 3.8%. By 2016 Armenia’s GPD growth rate slowed down to 0.2%. However, from 2017 onwards the Eurasian economies recovered again. In that year the EAEU’s GDP growth rate reached 1.9%, in 2018 – already 2.5% (Chart 5, Table 6).

Chart 5. EAEU annual GDP growth rate (2014-2018, index of physical volume of GDP, % change y.o.y.)

Source: EEC Statistics Department.

The average growth rate of the Union during the past five years was at 0.8%. This was very low for a group of developing and emerging economies, for whom the average GDP growth rate was around 3.5 to 7% during that period. Even the developed economies grew faster, such as the EU and the USA, which had an average growth rate of 2.1 and 2.4%, correspondingly. Only South America had a comparable low growth rate (Chart 6, Table 7).

Chart 6. EAEU’s GDP growth rate in comparison (2014-2018, % change y.o.y.)

Source: EEC Statistics Department, World Bank Group, IMF.

With another slowdown, and potentially even recession, expected for 2019-2020, the Russian government is unlikely to meet its goal 4% annual GDP growth.

Another important factor of a country’s or regional bloc’s economic power is its population size. The population of the Eurasian Economic Union grew by 2.6% from 179.1 mln in 2014 to 183.8 mln in 2018 (Chart 7, Table 8).

Chart 7. EAEU Population (2014-2018, thousand people)

Source: EEC Statistics Department.

The EAEU’s GDP per capita by purchasing power parity grew from $24 686 in 2014 to $25 740 in 2018. That is an increase of $1 054 per citizen or 4.3% over the past five years in total with an average growth rate of 1.2% (Chart 8, Table 9).

Chart 8. EAEU GPD per capita (2014-2018, $)

Source: EEC Statistics Department and authors calculations.

During that period the EAEU’s overall unemployment rate decreased from 5.4 to 5.1%. The biggest decline in unemployment was in Kyrgyzstan – by 1.1 pp., whereas unemployment is very high in Armenia and even increased from 17.6 to 20.4% (Chart 9, Table 10).

Chart 9. EAEU unemployment rate (2014-2018, %)

Source: EEC Statistics Department.

The overall percentage of people in the Eurasian Economic Union (EAEU) living under the poverty line increased from 10.4 to 12.1% from 2014 to 2017. Whereas the poverty rate decreased in Armenia by 4.3 pp., in Kazakhstan by 0.2 pp. and in Kyrgyzstan by 5.0 pp., it increased in Belarus by 1.1 pp, and in Russia by 2.0, the later being the principal factor for the overall statistical increase (Chart 10, Table 11).

Chart 10. Poverty rate (2014-2018, % of population below poverty line)

Source: EEC Statistics Department and author’s own calculations.

From 2014 to 2017 economic inequality in the EAEU measured by the Gini coefficient decreased slightly from 0.398 to 0.394. Economic equality increased most in the Union’s two smaller member states – Armenia (by 0.014 pp) and Kyrgyzstan (by 0.037 pp). Kazakhstan and Russia become more unequal during that period, by 0.009 pp and 0.006 pp, respectively (Chart 11, Table 12).

Chart 11. EAEU economic inequality (2014-2018, Gini index)

Source: EEC Statistics Department and author’s calculations.

The more equal the contribution of the member states to the overall GDP of an integration bloc, the better for its sustainable economic development. Unfortunately, as already said, the EAEU is very dependent on Russia’s economic performance and its role remained high during that period: 86.7% in 2014 and 86.8% in 2018 (Chart 12, Table 13). However, it is worth noting that the large weight of one of the member states is common for many other regional integrations, including USMECA and MERCOSUR.[6]

Chart 12. EAEU GDP structure by member state (% of total)

Source: EEC Statistics Department and author’s calculations.

Macroeconomic stability

Macroeconomic convergence is another very important factor for sustainable economic development of a given integration bloc. According to the EAEU Treaty, the member states must conduct an agreed macroeconomic policy with the following convergence criteria:

  • the annual deficit of the consolidated budget of a state-controlled sector shall not exceed 3% of GPD;
  • the government debt shall not exceed 50% of GDP;
  • the inflation rate (consumer price index) per annum shall exceed the inflation rate in the member state with the lowest value by not more than 5%.

The inflation rates in the EAEU member states are relatively high, with an average inflation rate of 7.5% in the EAEU over the past five years (2014-2018). During the past five years Belarus overshot the inflation convergence criteria three times (by 10.1 pp. in 2014, by 4.8 pp in 2015 and by 8.2 pp in 2016), Kazakhstan two times (by 11 pp in 2016, by 1.4 pp in 2017) and Russia two times (by 6.8 pp in 2015, by 3.5 pp in 2016).  In 2016 Armenia experienced a deflation rate of -1.4%. In 2018 all the EAEU member states met the inflation convergence criteria (Chart 13, Table14). 

Chart 13. EAEU inflation rate (2014-2018, % change y.o.y.)

Source: EEC Statistics Department.

Except for Belarus, which always had a sound budget surplus, all of the four other EAEU member states missed the budget deficit convergence criteria at some point during the last five years: Armenia (by 1.8 pp in 2015, by 2.5 pp in 2016, by 1.8 pp in 2017), Kazakhstan (by 1.4 pp in 2016, by 1.2 pp in 2017), Kyrgyzstan (by 1.5. pp in 2016), Russia (by 0.4 pp in 2015 and by 0.7 pp in 2016). Again in 2018 all EAEU member states met this criterion (Chart 14, Table 15).

Chart 14. EAEU budget deficit (2014-2018, % in relation to GDP)

Source: EEC Statistics Department and author’s calculations.

Over the past five years the EAEU as a whole had a comparatively low average government debt of 12.5% of the Union’s GDP. Only Armenia and Kyrgyzstan didn’t meet the government debt convergence criteria. From 2016 on Armenia exceeded the acceptable level by 7 pp in average and Kyrgyzstan by 9 pp in average during the whole period. Both were able to slightly decrease their excess by the end of the period (Chart 15, Table 16).

Chart 15. EAEU government debt (2014-2018, % in relation to GDP)

Source: EEC Statistics Department and author’s calculations.

A recently published study by the Eurasian Economic Commission, which compares the degree of integration of various regional economic blocs, has shown, that the EAEU increased its macroeconomic convergence from 56% in 2014 to 59% in 2017. In this aspect it came second to the EU, which achieved a macroeconomic convergence of 91% in 2017, but was ahead of both ASEAN (33%) and MERCOSUR (34%)[7]. Deeper macroeconomic convergence within the EAEU might be achieved if, similar to the system in the EU, the EEC would be given the right to impose sanctions on member stats that violate the criteria.

Conclusions


So, did the EAEU create proper conditions for sustainable economic development of the member states in order to improve the living standards of their population?

In general, the answer is affirmative, but challenges remain.

The Eurasian Economic Union and its 2014 treaty created modern administration institutions and greater legality in the post-Soviet space. However, Eurasian economic integration is slowed down by a lack of supranational powers, a limited budget and administrative staff.

During the past five years the Union improved its positions in international ratings, especially in the “Doing Business” review of the World Bank Group. However, the EAEU still needs to improve in areas such as the quality of governance, market openness and customs performance.

In spite of adverse external shocks, the EAEU was able to show economic growth with an increase in GDP per capita and a decrease in unemployment. One might even argue that without the EAEU, the economic performance of its member states might have been worse. However, the Union’s GDP growth rates are slower than they should be. Income inequality, as well as the poverty rate remain an issue to be tackled. Despite a relatively good and increasing macroeconomic convergence between its member states, the EAEU’s wealth creation is geographically imbalanced, since it depends largely on Russia’s economic performance.

Furthermore, the Eurasian economy suffers from an incomplete single market and from an excessive proportion of energy and raw materials in the wealth creation process. This will be looked at in the following two articles.

Annex:

Table 1. Staff size of the administrative bodies of regional integration blocs in comparison

EAEU ASEAN AU EU
Staff ~ 1 000 (2019) ~ 300 (2016) ~ 1900 (2019) ~ 60 000 (2018)

Source: Official pages of the respective regional integration organizations.

Table 2. Comparison of the annual budgets of major regional integration blocs (2017-2019, $ mln)

2017 2018 2019 (planned)
EAEU 126.4 128.9 133.7
MERCOSUR* 6.85 7.12 6.85
ASEAN 18.3
AU 850.8 763.3 681.5
EU 134 500.0 144 681.0 148 199.0

Source: Authors calculations based on official data of the regional integration bloc’s respective administrative bodies. *MERCOSUR Secretariat and Parliament budget only.

Table 3. EAEU in the “Doing Business” rating (2014-2018)

2014 2015 2016 2017 2018
Armenia 37 45 35 38 47
Belarus 63 57 44 37 38
Kazakhstan 50 77 41 35 36
Kyrgyzstan 68 102 67 75 77
Russia 92 62 51 40 35
EAEU 88 63 50 40 35

Source: World Bank Group.

Table 4. EAEU GDP (2014-2018; nominal, real and by PPP; bln $)

  2014 2015 2016 2017 2018
Nominal GPD 2 401.2 1 626.8 1 487.8 1 815.8 1 914.0
GPD deflator 107.7 107.2 104.3 105.8 110.2
GDP deflator/100 1.077 1.072 1.043 1.058 1.102
Real GDP 2 229.5 1 517.5 1 426.5 1 716.2 1 736.8
GDP by purchasing power parity (PPP) 4 421.0 4 194.2 4 205.0 4 488.5 4 730.0

Source: EEC Statistics Department and authors calculations.

Table 5. EAEU member states annual average exchange rate change (2014-2018, units of national currency against the US $, % change y.o.y.)

2014 2015 2016 2017 2018
Armenia -14.9 -0.5 -0.5 -0.1
Belarus -55.9 -25.2 3.0 -5.7
Kazakhstan -23.7 -54.3 4.7 -5.8
Kyrgyzstan -20.1 -8.5 1.5 -0.0
Russia -59.8 -10.3 12.8 -7.2

Source: EEC Statistics Department. *1 July 2016 Belarus changed the denomination of the Belarusian ruble by a ratio of 1:10 000.

Table 6. EAEU annual GDP growth rate (2014-2018, index of physical volume of GDP, % change y.o.y.)

2014 2015 2016 2017 2018
Armenia 3.6 3.2 0.2 7.5 5.2
Belarus 1.7 -3.8 -2.5 2.5 3.0
Kazakhstan 4.2 1.2 1.1 4.1 4.1
Kyrgyzstan 4.0 3.9 4.3 4.7 3.5
Russia 0.7 -2.3 0.3 1.6 2.3
EAEU 1.1 -1.9 0.3 1.9 2.5

Source: EEC Statistics Department.

Table 7. EAEU’s GDP growth rate in comparison (2014-2018, % change y.o.y.)

2014 2015 2016 2017 2018 Five-year average
EU 1.7 2.3 2.0 2.5 2.0 2.1
USA 2.5 2.9 1.6 2.2 2.9 2.4
China 7.3 6.9 6.7 6.8 6.6 6.9
African Union 3,9 3,5 2,2 3,7 3,8 3.4
ASEAN-5 4.6 4.9 4.9 5.3 5.3 5.0
South America 1.3 0.3 -0.6 1.3 1.2 0.7
EAEU 1.1 -1.9 0.3 1.9 2.5 0.8

Source: EEC Statistics Department, World Bank Group, IMF.

Table 8. EAEU Population (2014-2018, thousand people)

2014 2015 2016 2017 2018
Armenia 3 017.1 3 010.6 2 998.6 2 986.2 2 972.7
Belarus 9 468.2 9 480.9 9 498.4 9 504.7 9 491.8
Kazakhstan 17 160.9 17 415.7 17 669.9 17 918.2 18 157.3
Kyrgyzstan 5 776.6 5 895.1 6 019.5 6 140.2 6 256.7
Russia 143 666.9 146 267.3 146 544.7 146 804.4 146 880.4
EAEU 179 089.7 182 069.6 182 731.1 183 353.7 183 758.9

Source: EEC Statistics Department.

Table 9. EAEU GPD per capita (2014-2018, $)

2014 2015 2016 2017 2018
Armenia 3 852 3 512 3 524 3 869 4188
Belarus 8 289 5 829 4 997 5 729 6283
Kazakhstan 12 807 10 510 7 715 9 030 9 462
Kyrgyzstan 1 331 1 163 1 179 1 296 1 332
Russia 14 252 9 356 8 765 10 753 11 312
EAEU 13 215 8 919 8 127 9 892 10 408
EAEU (PPP) 24 686 23 036 23 012 24 480 25 740
EAEU (PPP, % change y.o.y.) -6.7 -0.1 6.4 5.1

Source: EEC Statistics Department and authors calculations.

Table 10. EAEU unemployment rate (2014-2018, %)

2014 2015 2016 2017 2018
Armenia 17.6 18.5 18.0 20.8 20.4
Belarus 5.1 5.2 5.8 5.6 4.8
Kazakhstan 5.0 5.1 5.0 4.9 4.9
Kyrgyzstan 8.0 7.6 7.2 6.9 6.9
Russia 5.2 5.6 5.5 5.2 4.8
EAEU 5.4 5.8 5.7 5.4 5.1

Source: EEC Statistics Department.

Table 11. Poverty rate (2014-2018, % of population below poverty line)

2014 2015 2016 2017 2018
Armenia 30.0 29.8 29.4 25.7
Belarus 4.8 5.1 5.7 5.9
Kazakhstan 2.8 2.7 2.6 2.6
Kyrgyzstan 30.6 32.1 25.4 25.6
Russia 11.2 13.3 13.3 13.2
EAEU 10.4 12.0 12.2 12.1

Source: EEC Statistics Department and author’s own calculations.

Table 12. EAEU economic inequality (2014-2018, Gini index)

2014 2015 2016 2017 2018
Armenia 0,373 0,374 0,375 0,359
Belarus 0,275 0,276 0,279 0,270
Kazakhstan 0,278 0,278 0,278 0,287
Kyrgyzstan 0,429 0,408 0,406 0,392
Russia 0,416 0,413 0,412 0,410
EAEU 0.398 0.393 0.395 0.394

Source: EEC Statistics Department and author’s calculations.

Table 13. EAEU GDP structure by member state (% of total)

2014 2015 2016 2017 2018
Armenia 0.5 0.7 0.7 0.6 0.7
Belarus 3.3 3.4 3.2 3.0 3.1
Kazakhstan 9.2 11.3 9.2 9.0 9.0
Kyrgyzstan 0.3 0.4 0.5 0.4 0.4
Russia 86.7 84.2 86.4 87.0 86.8
EAEU 100.0 100.0 100.0 100.0 100.0

Source: EEC Statistics Department and author’s calculations.

Table 14. EAEU inflation rate (2014-2018, % change y.o.y.)

2014 2015 2016 2017 2018
Armenia 3.00 3.7 -1.4 1.0 2.5
Belarus 18.1 13.5 11.8 6.0 4.9
Kazakhstan 6.7 6.6 14.6 7.4 1.5
Kyrgyzstan 7.5 6.5 0.4 3.7 2.9
Russia 7.8 15.5 7.1 3.7 2.9
EAEU 8.2 14.1 7.7 4.1 3.2

Source: EEC Statistics Department.

Table 15. EAEU budget deficit (2014-2018, % in relation to GDP)

2014 2015 2016 2017 2018
Armenia -1.9 -4.8 -5.5 -4.8 -1.6
Belarus 1.0 1.8 1.3 2.8 3.8
Kazakhstan 11.0 9.6 -4.4 -4.2 2.8
Kyrgyzstan -0.5 -1.4 -4.5 -2.8 -0.3
Russia -1.1 -3.4 -3.7 -1.5 2.9
EAEU 0 -1.8 -3.6 -1.6 2.9

Source: EEC Statistics Department and author’s calculations.

Table 16. EAEU government debt (2014-2018, % in relation to GDP)

2014 2015 2016 2017 2018
Armenia 43.7 48.7 56.7 58.7 55.7
Belarus 24.5 36.5 38.9 39.9 37.3
Kazakhstan 14.3 22.1 24.3 25.4 26.2
Kyrgyzstan 53.6 67.1 59.1 58.9 56.0
Russia 9.9 10.1 9.9 10.3 10.0
EAEU 11.1 12.9 12.7 13.0 12.8

Source: EEC Statistics Department and author’s calculations.

Notes:

[1] The views expressed in the article are solely that of the author and may not represent that of the Higher School of Economics and IIASA.

[2] Referring to the EAEU’s 5-year anniversary, some Russian experts use the term “пятилетка” (Rus. “pyatiletka” – “five-year cycle”), thus jokingly alluring to the five-year production plans of the Soviet Union.

[3] Interestingly enough, more than 2/3 of the African Union’s budget comes through international donations, especially from the EU.

[4] Yeliseyeu Andrei. (2019) The Eurasian Economic Union: Expectations, Challenges, and Achievements. Berlin.: German Marschall Fund (GMF). – 25 p

[5] The economic development of the Eurasian Economic Union and the Member States in 2018: international ratings. Analytical report. – M.: EEC. 2019. – 129 p. // (In Russian): Ekonomicheskoye razvitiye Yevraziyskogo ekonomicheskogo soyuza i gosudarstv-chlenov v 2018 godu: mezhdunarodnyye reytingi. Analiticheskiy doklad. — M.: YEEK. 2019. — 129 s.

[6] Vinokurov, E. (2018). Introduction to the Eurasian Economic Union. Palgrave Macmillan.

[7] Integration indicators. – M .: EEC, 2019. – 140 p. // (In Russian). Indikatory integratsii. – M.: YEEK, 2019. – 140 s.

Source: http://www.institutfuersicherheit.at/

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