Kazakhstan and the Eurasian Economic Union



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„The Treaty we signed is a truly historical milestone that opens up broad prospectsfor the development of our economies and improving the well-being of our countries’citizens,”said President Nursultan Nazarbayev.

On 29 May 2014, the leaders ofKazakhstan, Russia and Belarus met in Astanato sign the agreement establishing theEurasian Economic Union (EEU). Theunion, first proposed by President Nazarbayevover 20 years ago, builds on the work of theCustoms Union (CU) and CommonEconomic Space (CES) to create a commonmarket of over 170 million people. The unionwill further strengthen Kazakhstan’s economy,providing more and greater opportunities fordomestic and foreign businesses. “Any unionmust base on the principles of economic pragmatism,voluntarism, equality, non-interferencein the internal affairs of each other,respect of the sovereignty and inviolability ofthe borders. A new economic organisation hasappeared on the international arena, one thathas full juridical personality and acts based onthe principles of the World TradeOrganisation. Friends, this is a momentousday for the peoples of Kazakhstan, Belarusand Russia. The Eurasian Economic Union isa new, sturdy mechanism of eternal friendship,cooperation, and good neighbourly relationsbetween our nations. I feel that May 29is worthy of being memorialised on ourcalendars as Eurasian Integration Day. Ionce again congratulate the peoples of ournations and all participants and guests inthis ceremony on the signing of the Treatyon the Eurasian Economic Union. Smoothsailing to our Economic Union!”concludedPresident Nursultan Nazarbayev in thepress statement following the Supreme EurasianEconomic Council Meeting.

ACCESSION TO THE EURASIANECONOMIC UNION SERVES THEECONOMIC INTERESTS OF KAZAKHSTAN

This common market has significantpotential over the next two decades, withexperts predicting a 25 per cent growth inthe member states’ GDP by 2030, whichequates to over USD 600bln. Also, since thecreation of the CU and CES, trade betweenRussia, Kazakhstan and Belarus hasincreased by 47 per cent, exceeding USD24bln in 2013.”We are uniting our economic potentialfor the prosperity of our nations. The unionis, first and foremost, economic and doesnot touch on issues of member states’independence or political sovereignty in theintegration process. It is symbolic that thehistoric Treaty on establishing the EurasianEconomic Union is signed in the city ofAstana, the new capital of the independentKazakhstan,” president Nazarbayev said inthe press statement following the SupremeEurasian Economic Council Meeting. Ourintegrated union is the largest energy resourceexporter in the world, and in recent years, ithas been a major wheat exporter. The Unionfully provides for its own food and energyneeds, and has all the necessary services andcommunications within its common marketand with other nations. In other words, weare self-sufficient in key resources that guaranteestate independence. Thus, today, a new21st century geopolitical reality is being born.It was created through a great deal of hardwork. I will say honestly, the birth of theEurasian Economic Union was a toughvictory,” the president Nazarbayev declared.For Kazakhstan, membership of the CUand CES has seen trade turnover, exports andimports almost double between 2009 and2013. In that time, turnover has gone fromUSD 72bln to USD 133bln, exports fromUSD 43bln to USD 83bln and imports fromUSD 28bln to USD 49 bln.The success of the CU and the CES isdependent on strong relationships withEurope, Asia and other regional bodies andcountries. Kazakhstan sees great potential inits strategic location between Europe, Russia,Asia and the Middle East and will continueto promote these ties.The Commission of the EEU, the supranationalbody established to promote integration,is strictly regulated by the agreementsbetween member states. Its powersrelate exclusively to economic issues. “Russia,Belarus and Kazakhstan are moving towardsa completely new level of cooperation by creatinga common space where goods, services,capital and work force can move freely. Thethree states will follow a coordinated policy inenergy, industry, agriculture and transport,”the president also highlighted.The Commission of the EEU does nothave any supranational authority over the respectiveHeads of State and Kazakhstan will notsupport the creation of any supranationalpolitical bodies, such as an EEU Parliament.The structure of the EEU Commission and itsruling council means that no single state candominate the decision making process.Resolutions are based on the decision of themajority of the Council but each state has aveto on the process. In this case the issue isbrought up to the level of the Head of Stateswhere the decision is made by consensus.Kazakhstan believes there is currently nonecessity to expand the role or operations ofthe Eurasian Economic Commission andthat its work should be clearly evaluated toensure it effectively fulfills its remit and deliversfor all member states and their citizens.

KAZAKHSTAN’S ACCESSION TO THEEEU WILL NOT AFFECT BILATERALRELATIONS WITH OTHER COUNTRIES

The EEU will have no impact onKazakhstan’s other bilateral or internationalrelations or agreements, nor its integrationinto other organizations. The EEU preservesthe sovereignty of each member state. TheEEU is aimed at facilitating trade, both withinthe organization and with outside partners– not to act as a barrier. Kazakhstan stronglysupports the proposal to create a free tradezone between the EEU and the EuropeanUnion.“There is no and will not be a returnto the past – this is our unanimous andunequivocal position. We do not move backwards,but head forwards to reap the clearbenefits of integration, as demonstrated byother organizations around the world,”President Nazarbayevfurther mentioned.The EEU does not affect Kazakhstan’sambitions to further integrationto the globaleconomic community, including accession tothe World Trade Organization (WTO) andOrganization for Economic Co-operationand Development (OECD).”We are creatinga fundamentally new model for good neighbourlyrelations and interaction between peoplesin the great Eurasian space. Its foundationis the high level of trust, firm friendship,and mutual support between our governments,tested over history.The Eurasian Economic Union meansnew opportunities, first and foremost formillions of our nations’ citizens. Favourableconditions are being created for developingsmall and midsize businesses in participatingnations. Labour resource markets are uniting,which is an important factor in achieving ahigher professional level and labour productivity,”Kazahstan’s President mentioned.

WB: KAZAKHSTAN IS BY FAR THEEASIEST EEU MARKET TO DO BUSINESS

According to the World Bank’s Ease ofDoing Business Index, Kazakhstan is by farthe easiest EEU market to do business in,making it the ideal choice for internationalbusinesses looking to access the high growthcommon market of the EEU. This will helpattract foreign businesses and diversifyKazakhstan economy.Foreign Direct Investment intoKazakhstan has increased significantly underthe CU and CES. Between 2009 and 2012,FDI amounted to USD 99bln – over 50 percent of the total FDI into Kazakhstan sinceindependence in 1991. FDI reached more thanUSD 18bln in the first nine months of 2013.

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