Belarus and the Eurasian Economic Union
The EEU is an economic alliance between Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia. It evolved on 01.01.2015 from the customs’ union between Belarus, Russia and Kazakhstan. The main objective is to simplify and streamline the exchange of services, goods and capital. The five countries want to coordinate their economic policy along the lines of the European Union. The principal milestones on the road to development of the EEU were:
– in 1994 the President of Kazakhstan, Nursultan Nazarbayev, proposed the idea of a Eurasian Union
– in 2000 Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan founded the Eurasian Economic Community
– in 2010 the customs’ union between Belarus, Kazakhstan and Russia came into being
– in 2012 the Eurasian Economic Union was created between Belarus, Russia and Kazakhstan, with the aim of promoting a free transfer of goods, services, capital and workforce.
Each year a different member country chairs the EEU. In 2015, this was Belarus, followed by Kazakhstan in 2016 and Kyrgyzstan in 2017.
The ambition of the Union is economic cooperation. The member countries also aim to coordinate key issues of mutual interest such as transport, agricultural and industrial policy.
Among the most important targets of the EEU are:
– creating conditions for the stable development of the economies in the member countries, with the aim of improving the standard of living of the population;
– attempting to create a common market for goods, services, capital and workforce;
– implementing extensive modernisation, cooperation and improvement in economic competitiveness.
Moreover, the EEU aims to create a common finance market by the year 2025. This should make a free transfer of capital within the EEU possible. The common finance market should include banks, stock exchanges and insurance.
The EEU also hopes to extend its sphere of activity by concluding free trade agreements with other countries. A free trade agreement with Vietnam was already signed in 2015. Negotiations over free trade are currently underway with about 50 countries, for example with Singapore, Egypt, Iran and India.
At the present time, the Commission is working with China on the “new Silk Road” project, in other words a joint trade and economic agreement with China. This cooperation would provide opportunities for both sides. On the part of the EEU, Russia in particular would be able to supply its hydrocarbons to the Far East. In return, China would obtain a reliable transit route to the West for its goods. The Silk Road could also include the regions of Western Asia, the Caucasus and Eastern Europe. Afghanistan, Pakistan and Iran also seem to be interested in cooperating. This would lead to a trading area from China in the east via India and Iran in the south to Belarus in the west.
In the summer of 2017, a new customs code came into force with the intention of standardising and modernising import regulations and the work of the customs authorities.
As some of the member countries are lagging well behind with regard to modern technology, the Eurasian Economic Commission has set itself the goal of encouraging industrial innovation and promoting industrial cooperation between the member countries. In addition, the production of technology products will be stimulated and completely new branches of high-tech industry developed.
To achieve this goal, the Eurasian Economic Commission plans to modernise industrial and innovation structures. This includes industry and innovation clusters, industry and technology parks, economy and technology centres.
Eurasian Technology Platforms
Furthermore, platforms are to be created in priority fields of technology so as to encourage important key branches. Scientists and design engineers from all EEU countries will work together to find solutions for specific innovations for particular industrial branches. The results of the research and development work will subsequently be implemented in the production process.
In the EEU countries, so-called digital factories are to be created. The Eurasian Economic Commission is eager for the member countries to synchronise their national digitalisation strategies in order to create digital technology platforms, system and interdisciplinary projects. Digital technology in the fields of industry and agriculture is still negligible, but this should be remedied in future by digital factories.
Eurasian Centre for machine tool construction
The EEU is planning to create a Eurasian Centre for the machine tool industry, which will be instrumental in the technological development of machine tool construction.
The demand for modern, environmental technology is extremely high at the moment. The global market for environmental technology and services is one of the most dynamically growing sectors. With the aid of the Eurasian platform “Technology for ecological development”, the EEU is planning to open up this market for companies within the union. A top priority is the development of environmentally friendly transport facilities and modern solutions for climate and environmental protection.
According to a survey made by the German-Russian Chamber of Commerce, the majority of German companies questioned consider the Eurasian Economic Union (EEU) has advantages. Apart from abolishing customs duties between the countries and creating a larger sales market, some of the advantages mentioned included savings in logistic costs and technical regulations.
The EEU provides easier access to five markets simultaneously through unified customs duties and a common certification process. This is beneficial in particular to companies which are active in other EEU countries as well as Russia.
According to Tigran Sarkisjan, the chairman of the Eurasian Economic Commission, the work of the Eurasian Economic Union is primarily of an economic and not a political nature. The Commission offers solutions for improving the business environment in the five countries and providing a single market for goods and services as well as freedom of movement for the workforce and investments.
It will take some time to be able to judge whether the EEU can fulfil these expectations in the long term.