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Kyrgyzstan in EEU: way to the north

In 2017, Kyrgyzstan presided over the Eurasian Economic Union. The day before, the officials and experts have summed up the results and told about plans for the future.

GDP grows, inflation decreases

Kyrgyzstan considers deepening of economic integration and lifting of the barriers in mutual trade between states as the main task within the framework of the chairmanship in the bodies of the EEU in 2017. First Deputy Prime Minister Tolkunbek Abdygulov announced this at a round table.

Priority directions remain  as before the activation of investment policy, the signing of the agreement on pensions for workers and their families, the adoption of a strategy for the formation of the digital space, industrial cooperation, the liberalization of services market, and the development of the concept of the formation of a common financial market.

According to the results of the first half of the year, the inflation rate in the EEU countries was 3.5-3.7 percent, and in Kyrgyzstan — 2.8 percent. At the same time, economic growth was restored in all countries of the EEU, as a result of which trade has improved.

«The Eurasian economic space now covers new trade and investment routes that form a global economic architecture with new financial and trade centers, among which, undoubtedly, must be the Eurasian Union. This is our key goal, — Tolkunbek Abdygulov believes. «The agreement on the establishment of a free trade zone with Vietnam opens new prospects for working with a large Asia-Pacific region with more than 600 million inhabitants.»

It is expected that the implementation of the provisions of this agreement will allow increasing the trade turnover between the EEU countries and Vietnam to $ 8-10 billion by 2020 from the current $ 4 billion. The possibility of creating free trade zones with Iran, Egypt, Israel, Indonesia, Singapore, Tunisia, Serbia, India is being considered.

The situation, connected with the accelerated economic development of our countries, makes it necessary to join efforts to expand trade and economic ties with China.

Tolkunbek Abdygulov

«The agreement will cover customs and sectoral cooperation, electronic commerce, technical regulation, competition policy, protection of intellectual property, domestic market, public procurement. It is planned not just to formulate trade rules at the WTO level, but to lay the foundation for applying the most modern, progressive standards of trade regulation,» Tolkunbek Abdygulov explained.

In 2018, the Agreement on the provision of pensions for workers of the EEU countries will come into force. Citizens of Kyrgyzstan will have the opportunity to form, preserve and realize pension rights acquired by them during their work in the countries of the union. The document provides for the solution of the issue of exporting pensions and accounting for the length of service received in another state of the EEU.

Prospects for new market

Expert Semen Uralov made an analysis that showed prospects for Kyrgyzstan for 2018-2020. About 50 percent of the GDP is occupied by services. This is unused potential. Despite the large labor migration, the country still lacks the labor resources that can be used.

The growth rate of cognac imports in Russia for 2016-2017 is 133 percent. Frozen products are supplied from Belarus, Serbia and China. The main task for Kyrgyzstan is not to search for investors, but to become an export-oriented state.

Kyrgyzstan  has supplied dairy products to Russia for $ 4.2 million. And Germany — twice as much, although it doesn’t belong to the EEU. «It’s all your money. Look at Belarus. It delivered dairy products for $ 488.8 million, and there are 10 million citizens in the country.  It has equal terms with Kyrgyzstan. This is only about one commodity item. This is the underused potential of Kyrgyzstan and those people who are involved in the service sector,» Semen Uralov said.

If we analyze all commodity groups, it turns out that Kyrgyzstan has something to offer the members of the union. But it is necessary to determine the sales markets. According to the expert, the republic should focus on the Ural, Siberia and the North, and not to stay focused on Moscow. These are the regions that  have not enough food, ready-made clothing and alcohol.

«We should supply frozen vegetables and fruits, since we are dealing with the northern region, where there is nothing to eat for six months. There are not enough juices in the north. Particular attention should be paid to the supply of honey, nuts and horse meat. For example, in Norilsk a kilogram of potatoes costs $ 10. Russia is moving to reorganizing the army, so there is a need for special clothing. Kyrgyzstan can participate in public procurement. Don’t be afraid of high-quality copying, that China is successfully engaged in,» he said.

Obviously, Uzbekistan will not enter the Eurasian Economic Union, but the products produced in the republic can be supplied through Kyrgyzstan. Kazakhstan already claims to be a reseller. The one who first takes a niche will get a huge profit. Considering the visits of the new president, the establishment of contacts, it is not difficult for Kyrgyzstan to do this.

It is necessary to create brands for the Russian market. As an example, Semen Uralov brought «Toy Talkan» bars. But this name doesn’t say anything for the Russian consumer, but with proper delivery they will be in demand. But Kazakhstan has already succeeded here...

Security threats

There are more than enough prospects for Kyrgyzstan. But, according to the deputy Irina Karamushkina, any economic zone should be protected. The EEU is the only association that can develop autonomously. However, members of the Union are subject to threats of terrorism and extremism. Their manifestations are constantly growing. The militants receive terrorist experience, return to their homeland and can destabilize the situation in the union.

There won’t be an open war, but the situation can be undermined from the inside. This is already happening. There is a successful information war while we attempt to stop it.

Irina Karamushkina

«There are groups «Kyrgyzstan vs. EEU». Their participants declared war against unification. For Kyrgyzstan, this is a danger. Some have lost confidence.  They went out into the street from social networks. Give them weapons and they will start a war. Detachments of militants are citizens of our republics. Recruitment is aimed at labor migrants,» the deputy is sure.

Moreover, university professors are campaigning against the EEU. This is economy, but one shouldn’t turn a blind eye to these threats, the parliament member believes.