On March 20 in Astana, the Presidents of Russia, Kazakhstan and Belarus will discuss issues of economic cooperation, as well as the prospects of the development of the Eurasian Economic Union (EAEC). The heads of state will also exchange views on international issues, particularly on the situation in Ukraine. "The deterioration of the economic situation in Russia had a negative impact on the economies of Belarus and Kazakhstan. Our partners would like to hear the opinion of the Russian leadership when the sanctions pressure on Russia will pause and the reverse process will be started," expert of the Russian Institute of Strategic Studies Azhdar Kurtov told Vestnik Kavkaza. The heads of state, according to Kurtov, will discuss measures to adjust the steps in the framework of multilateral economic relations, in particular in the framework of the EAEC.
The work of the integration association is causing concern among its members, although it's just two months since it started. The director of the Kazakhstan Group of Risk Assessment, Dosym Satpayev, told Vestnik Kavkaza that "the image of the EAEC is staggered in Kazakhstan" among the representatives of Kazakhstan's business, which were behind the creation of the Customs Union and participated in its subsequent transformation into the Eurasian Economic Community, considering that this project will help them to enter the markets of Russia and Belarus. "Now in Kazakhstan skeptics dominate. Moreover, the National Chamber of Entrepreneurs in connection with the depreciation of the Russian ruble have expressed the need to introduce temporary restrictions on Russian imports to Kazakhstan," the expert said. According to official data, 18% of local businesses are suffering losses and recognize the non-competitive nature of their products. The country is in a serious crisis, the authorities have to reformat the budget toward significant savings that could affect the standard of living of the population in the near future. Kazakh people have begun to doubt that they will have any economic benefits from staying in the EAEC this year.
Azhdar Kurtov believes that economic projects can develop in economic recovery, but during the crisis the parties that are involved in the project have been starting to knock each other's benefits. "They desperately trade on preferences. For example, Belarus is seeking special conditions for penetration to a market where they can sell their products, which are not in demand," the expert said. In addition, Belarus continues to re-westernize goods that Russia does not want to see on its market. Moscow's proposal of a joint customs checkpoints device for closing these revenues, was met with hostility in Minsk. But, at the same time, it did not do anything to solve the problem. Minsk's behaviour in the EAEC is puzzling. In particular, the Belarusian side refused to supply products of its refineries to its Russian partners for the same discounted prices, while getting oil from Russia at preferential prices. The secret of this attitude probably lies in a recent statement by Alexander Lukashenko, according to which Belarus can leave the alliance as soon as it ceases to feel the benefits. And this is only the beginning of the EAEC.
Dosym Satpayev reminded that the second phase of the creation of the Alliance implies close coordination of the integration of the economies of the three countries - Russia, Kazakhstan and Belarus - plus Armenia and Kyrgyzstan. The main objective of this stage is the creation of a single labor market, capital and services. But again, because of the negative situation in Russia, many of the projects which are planned to be intensified in 2015 can stop. Even local projects implying a bilateral format have been stalled. Statistics show that many of the structures in Kazakhstan are very cautious while watching what is happening in Russia and some of them have decided not to rush into projects that they would implement with Russian participants - too high a risk due to the heavy predictability of what is happening in Russia.
A common problem for members of the EAEC which looms on the horizon is unemployment. "One of the components of the EAEC - freedom of movement for workers - is problematic. Because freedom of movement for workers always means competition, and this risks conflicts within the state. The number of jobs is falling, and now there is a legal opportunity to replace these jobs with migrant workers from other states on a legal basis," Azhdar Kurtov said. The situation is likely to worsen after Kyrgyzstan joins the Union. For example, the Russian migration service in 2013 registered almost 650,000 Kyrgyz citizens, more than 170,000 people received work permits. In Kazakhstan there are slightly fewer citizens of Kyrgyzstan.
Many experts believe that the full accession of Kyrgyzstan, which is scheduled for May 2015, will only aggravate the situation in the EAEC. Nevertheless, most experts are convinced that, despite serious problems, the EAEC has every chance of surviving the difficult period and becoming a prominent organization. After all, this union was not created in order to speak about its demise in a few months.
