Eurasian Economic Integration: Past Experience and Future Challenges
On 10th October 2000 the presidents of Kazakhstan, Russia, Belarus, Kyrgyzstan and Tajikistan announced the establishment of a new international organization: the Eurasian Economic Community (EAEC). The main objective of the Community is to complete the formation of the Customs Union and create a common economic area. Moldova and Ukraine received the status of observers at the EAEC.
The organisation’s main bodies of governance are the Interstate Council, comprising the presidents and heads of governments of the five EAEC member countries, the Integration Committee, which is formed by the deputy heads of governments, and the Inter-Parliamentary Assembly. Nursultan Nazarbayev, President of Kazakhstan, has been selected as Chairman of the Interstate Council.
To encourage real business to participate in integration initiatives within the Community, the EAEC Business Council association has been set up. It was founded by the Chamber of Commerce and Industry of Russia (Yevgeny Primakov), the Russian Union of Manufacturers and Businessmen (Arkadii Volskii), the Association of Financial and Industrial Groups of Russia (Oleg Soskovec), and others. Kazakhstan is represented in the Association by the Integration International Foundation (Sergey Tereshenko), Kazphosphate (Mars Urkumbayev), Montazhspetsstroi (Yevgeniy Yozhikov-Babakhanov), Almaty Chamber of Commerce (Isatay Buzaev), and other companies.
Mars Urkumbayev is one of the inspirers and organizers of the Association, Chairman of the EAEC Business Council for Kazakhstan, and Honorary Chairman of Kazphosphate. Here he answers questions from our magazine.
Mars Fazylovich, why is Kazphosphate one of the founders of the EAEC Business Council association?
Last year I was offered the position of honorary chairman of Kazphosphate, a company that has stepped up the promotion of its products to foreign markets as a new strategic investor appeared. I accepted the offer. In addition to establishing contacts with the country’s administration and state bodies at all levels, one of my duties is to co-ordinate international co-operation and shape the company’s image. Our company’s membership of the EAEC Business Council is one of the most important moves towards these goals.
I have an extensive track record of working for international organizations of manufacturers and businessmen. Though the influence of these associations on economic integration is hard to overestimate, there has always been a problem related to the lack of a clear mechanism of interaction between businessmen and governments of different countries.
The EAEC Business Council association has such a mechanism, which was initiated by the Secretariat of the Community and approved by the five heads of the EAEC states.
The Community and the Association have permanent staff, employees who work specifically on involving real business in integration processes. So I advised the management of Kazphosphate to take an active part in the association’s work.
Could you please tell us about the objectives and tasks of the EAEC Business Council?
The council’s main objective is to support businesses, uphold the high social and legal status of its members, and protect their interests in relations with EAEC state governance bodies.
I would like to stress again that the Council was founded under the auspices of the EAEC, and therefore its objectives fully correspond to the political decisions made within the framework of this organization. Primarily, these are to form a single economic area and create conditions that are conducive to mutually beneficial co-operation, to restore economic links between partner enterprises, and to ensure genuine integration of manufacturers and consumers throughout the entire territory of the Community.
Our Council aims to provide support to individual businessmen in the form of organizational assistance, consulting and information. Its priority activities will be seeking partners to sell products, creating favourable conditions for co-operation in production, organizing funding for joint programmes, leasing, concessions and other projects. This work will be of particular importance when the decisions on improving the legal mechanism and customs regimen, tax, monetary and credit initiatives, and draft laws are implemented.
The main mechanism through which the council’s objectives will be achieved will be professional guilds and their public councils, which will bring together similar enterprises based in EAEC countries. The guilds, formed from representatives of leading companies in basic industrial and service sectors, will certify their members and carry out specific work within the framework of the tasks set by the Council.
What has been done to put these plans into practice?
In September 2002 the heads of governments met together in Astana for a regular session of the EAEC Interstate Council. It was the first time that businessmen from Community member countries, including those from the EAEC Business Council, had taken part. Further to a proposal by the Kazakh President Nursultan Nazarbayev, a forum of EAEC businessmen will be held at the next session of the Interstate Council, scheduled for the first quarter of 2003 in one of Russia’s regions. So the Business Council will be able to take an active part in developing and reviewing state blueprints and measures to improve the mechanism of regulating the economy and harmonizing the legislations of EAEC member countries.
This will help to take account of the opinions and actual problems of specific manufacturers who are members of the Association.
We have set up the EAEC Business Council Bureau for Kazakhstan, which launches initiatives in various regions of the country in order to pool the efforts of enterprises and organizations and help them realise the tasks I’ve just told you about. Similar bureaux are being established in other EAEC countries.
What will be the first moves of the Bureau?
First of all, we need to make the people we are working for aware of our activities. I do hope your magazine will pioneer this initiative. It is essential to make the tasks and objectives of the EAEC Business Council clear. There are many unions and associations operating in Kazakhstan. The majority of them are part of the Confederation of Employers. We need to establish effective contacts with these organizations.
I would like to stress that this new Business Council is in no way redundant. The Confederation of Employers develops proposals and identifies problems that can only be solved at an interstate level. Having become a member of the Confederation, our Bureau will help to establish interaction between businessmen and state bodies of EAEC countries. This will bring the interstate contacts the Confederation of Employers already has, such as with the International Union of Manufacturers and the International Congress of Manufacturers and Businessmen, to a higher level.
The next step is to organize a network of regional representatives on economic rather than geographical lines. I believe there should be five representative offices, one for each major region in Kazakhstan.
Ultimately, it is crucial that we demonstrate the effectiveness of our Bureau’s operations with a couple of specific examples.
What is the future of the Eurasian Community, in your opinion?
We have to build the future using the experience we have accumulated in the past. As we know, all new things are just old things that have been well forgotten. The common rouble zone existed long before the European Union was formed and the euro was introduced as a single currency. I believe that the economic integration processes being fostered within the EAEC on a qualitatively new level will inevitably lead to the introduction of a single currency for the Eurasian Community. What it will be called is not important. I believe and hope that our children and grandchildren will live in a common Eurasian homeland, with a common economic, customs and energy area!
Mars Fazylovich Urkumbayev. Born on 23rd November 1939 in Almaty, he graduated from the Kazakh Institute of Chemistry and Technology (KICT) in 1962. He received the degrees of Doctor of Engineering and Professor. Urkumbayev is a member of the International Academy of Engineering and the Engineering Academy of the Republic of Kazakhstan.
Having graduated from the Institute, he worked as a junior member of research staff at KICT (1962-1964) and took a postgraduate course at the Moscow Technical College (1965-1968). Urkumbayev also worked as a senior teacher, assistant professor, head of a chair and Dean of KICT (1969-1973).
In 1973-1991 he held a position of the President of the Dzhambul Institute of Irrigation and Drainage Construction. The General Director of the Taraz Regional External Economic Association and Deputy Chairman of the Dzhambul Regional Executive Committee (July 1990-February 1992), later the head of the South Kazakhstan regional administration (February 1992-December 1993), Chairman of the South Kazakhstan Department of the Academy of Sciences (1992-1994) and Minister of Economy of Kazakhstan (February-September 1994).
From November 1994 he had held the position of President of the International Fund Integration South, from November 1998 President of Kazakhstan's Union of Manufacturers and Businessmen. Chairman of the BOD of the Kazakhstan Confederation of Employers (from December 1999 to May 2001). Since January 2002 Urkumbayev has been the Honorary Chairman of Kazphosphate and since February 2002 a member of the Bank Caspian BOD.
He was decorated with the Khurmet Order (2002), the Red Banner of Labour Order, the Sign of Honour Order and is the winner of the USSR State Prize. Urkumbayev received a personal acknowledgement from President of Kazakhstan Nursultan Nazarbayev.
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