Kazakhstan’s President Nursultan Nazarbayev was the last of the three presidents of the Customs Union member states – Russia, Kazakhstan, and Belarus – to react to Vladimir Putin’s recent article, published in one of Russia’s most read newspapers, about the prospects of creating a full-blown economic entity modeled after the European Union.
In his in-depth review of the economic integration among what in late 1991 became the Commonwealth of Independent States and later within the framework of the Eurasian Economic Community, Nazarbayev described the far-reaching goals of multilateral cooperation between former Soviet countries, with full respect for their national sovereignty and identity.
He also warned against any attempts to depict the ongoing process of “rapprochement” between Moscow, Minsk, and Astana, with the possible inclusion of other capitals, as a revival of the Soviet Union. “There is and will be no ‘restoration’ or ‘reincarnation’ of the USSR. These are just phantoms of the past, rumors, and speculation. Our views on this issue are convergent in Russia, Belarus, and other countries,” Nazarbayev wrote, thus assuaging the portions of his electorate worried about the eventual resurrection of a bloc modeled on the USSR.
Kazakhstan’s leader also revisited some of his frequently raised proposals for post-Soviet integration. One of his suggestions is to create a supranational deliberative authority known as the Eurasian Assembly, with headquarters in Astana – the natural capital of the Euro-Asian subcontinent. Concurrently, the Business Council of the Eurasian Economic Community may serve as a launching pad for the further creation of the Eurasian Congress of industrials and entrepreneurs aided by the Eurasian Chamber of industry and commerce uniting Russian, Kazakhstani, and Belorussian business people. The burgeoning of innovative industries in the Customs Union’s trilateral framework is to be buttressed, according to Nazarbayev, by a Joint Program for innovative and technological cooperation in response to the current economic and financial crisis leaving traditional industries with no means to restart their production in more economical ways. Another proposal is to initiate preparations for a future full-fledged currency union based on the Common Economic Area.
Later in the article, Nazarbayev concluded that the “Eurasian Union is a mega-project [which] has all the chances of becoming an organic part of world architecture.” But he also reminded his colleagues of the need to set clear and comprehensible goals for the common purpose of pursuing fruitful economic integration in Eurasia.
It was recently announced that with the entry into force on January 1, 2012, of the Common Economic Area, the Customs Union Commission shall be replaced with a new tripartite organ, the Eurasian Economic Commission. This supranational authority, to become operational after July 1, 2012, has already been dubbed by several observers as the “Eurasian analogue of the European Commission,” a powerful executive with extensive powers, voluminous jurisprudence and its own jurisdiction. According to the Russian newspaper Kommersant, the Eurasian Economic Commission will likely have increased staff capabilities, taking the number of permanent personnel up to 1,200, instead of today’s 150 currently employed by the Customs Union Commission. Some analysts even speculate that this extremely powerful authority may potentially attract a few ministers from Putin’s government, thus asserting Russia’s full control over the future functioning of this trilateral organ. Though neither Kazakhstan nor Belarus have yet expressed their views on the formation of such an executive framework, it is widely believed that they will not be able to ensure an equal footing with Russia through equivalent rights to representation and decision-making.
On this latter issue, President Nazarbayev has been particularly cautious, constantly warning against any hasty decisions concerning the question of all-out economic integration, with the subsequent abolition of customs borders and unification of import tariffs. This is why he made no reference in his article to Prime Minister Putin’s words about the hypothetical birth of a Eurasian Union by 2015. The issue of expansion to new member states has also been rather complicated, with Kyrgyzstan wishing to join its northern neighbors inside the Customs Union. Since Russia prepares to become a WTO member after ending the difficult negotiations with Georgia, the Customs Union and the Common Economic Area risks creating even more confusion. Kazakhstani businessmen have long been complaining about the numerous bureaucratic procedures installed for import and export operations. They are now also facing increased competition from their Russian counterparts endowed with better productive capacities and massively benefiting from their economies of scale. According to experts, prices for most commodities in Kazakhstan are expected to rise even further until they reach the Russian level (for example, an increase of 29 percent for meat in 2011). At the same time, the average income remains stable, if not stagnating.