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EEU

Figures and facts: results of Kyrgyzstan\\\'s accession to EEU

Kyrgyzstan is a full member of the Eurasian Economic Union for almost 16 months. Opponents of integration have repeatedly said that the country hasn't received anything worthwhile from the union. The correspondent of 24.kg news agency tried to find it out.

History of 20 years

The path of Kyrgyzstan in the EEU was long and arduous. The serial called "Eurasian Integration" was launched 20 years ago. 

In January 1995, Russia, Kazakhstan and Belarus signed an agreement on the Customs Union. In March 1996 - Kyrgyzstan joins the agreement. In October of 2000 - Russia, Kazakhstan, Belarus, Kyrgyzstan and Tajikistan established the Eurasian Economic Community (EurAsEC). Seven years later, it was decided to form the basis of the Customs Union within the EurAsEC.

Since this time Kyrgyzstan begins to think about becoming a part of the Customs Union. 

Trade collapse

Kyrgyzstan joined the EEU primarily because the traditional for the country market outlets of products were closed. EEU countries firmly protected its market from foreign products.

As a result, in 2015 the foreign trade turnover of the Kyrgyz Republic fell by 24.6 percent. Exports decreased by 11 percent, while imports - by 29. At this time, the share of countries-members of the EEU in Kyrgyzstan's trade structure was 44.3 percent. The largest share belonged to Russia - 24.9 percent, while the smallest -  to Armenia (0.01 percent).

Even after opening of the customs borders, the turnover of Kyrgyzstan and EEU remained unchanged. The structure of both export and import of goods hadn't changed.

However, even after the opening of the customs borders the situation hasn't changed. The trade turnover of Kyrgyzstan with the countries on the basis of Union in 2015 fell by 24.5 percent and amounted to $2,543.6 billion. The export was formed in the amount of $539.8 million (decrease - 24.2 percent), while imports - $1. 3.8 billion (decreased by 24.5 percent).

This year, the decline continued. According to the Eurasian Economic Commission, for the first nine months of 2016 the volume of mutual trade of the EEU amounted to $29.5 billion soms - a decrease of 14.3 percent. If we compare the trade figures of Kyrgyzstan with partners in the alliance, the situation is even more deplorable. Total trade volume amounted to only $187.4 million and dropped by 46.6 percent.

Local authorities connected these low levels with several reasons. Kyrgyzstan joined the Union during the crisis in the region and in the world. Therefore it is too early to wait for the increase in indicators. In addition, the entrepreneurs of our country should master the intricacies of Eurasian trade. The process takes time, therefore the trade volumes are small.

There is also an unusual factor - the distortion of statistics. After the opening of the customs border, the country faced with the problem of the reliability of the data collected. Perhaps, the actual turnover figures are slightly higher than the available statistical data. But the fact remains. We've been waiting for the opening of borders for trade with neighbors. But in practice, we can't do this.

What is in takeaway? 

EEU is  a free movement of capital, goods, services, investment and labor. Each of the items is extremely important for Kyrgyzstan. But so far only one freedom is successfully implemented.

Trade "lames" due to existing barriers. Kyrgyzstan removed phytosanitary posts in November 2015. But neighboring Kazakhstan removed them only in October. Due to this, we can export vegetables and fruits to EEU countries. When veterinary posts, allowing exporting the meat, dairy and fish products, will be removed - is still unknown.

We also have difficulties with the movement of capital. There is investment in the KR from the EEU countries. But it is connected with Gazprom and the increase in inflows to the Russian-Kyrgyz Development Fund. The indicator with Belarus also grew -  supply of equipment increased. The volume of investments from Armenia is minimal. And Kazakhstan is ready to invest in our economy less with each year.

Formation of a single market of services of the Eurasian Economic Union is not yet completed. One can't say about any significant outcome yet.

The only freedom that Kyrgyzstan managed to implement almost fully - freedom of movement of labor.

Today our migrant workers in EEU countries have the same rights as the citizens of Russia, Kazakhstan, Belarus and Armenia. We have signed with the Russian Federation an agreement on the stay of nationals on the territory of each other for 30 days without registration. Same document is being prepared  with Kazakhstan.