Economic Relations between Kazakhstan and Russia 
— A commission on inter-state financial-industrial groups and
joint ventures; — an EAU international investment bank;
— An inter-state
EAU court of arbitration on economic problems, to resolve
conflicts on a legal basis and to impose sanctions;
— A commission
on the introduction of a clearance monetary unit (transfer ruble).
It is proposed
to implement a number of measures to preserve the potential achieved in the
previous decades and to enhance integration in the field of science, culture, and
education:
— The setting up
of common EAU research centers to carry out fundamental research in
contemporary knowledge;
— The setting up
of an EAU fund for the development of scientific research to unite the
scientific collectives from various countries;
— The setting up
of a committee on links in the field of culture, science, and education under
the Council of the Heads of EAU Governments;
— Encouragement
of the formation of non-governmental associations in the sphere of culture,
education, and science;
— The setting up
of a grants fund under the EAU Executive Committee.
It is proposed
to conclude the following accords on defense within the EAU framework:
— A treaty on joint actions to strengthen the
national Armed Forces of the EAU member countries and to protect EAU external
borders.
The EAU will
establish a unified defense space to coordinate defense activities:
—
The formation of joint peace-making EAU forces to maintain stability
and eliminate conflicts within the member countries and between them. The
sending of peace-making forces to conflict areas on EAU territory - with the
agreement of EAU member states and in accordance with international legal
norms;
—
The tabling of joint proposals by EAU member countries at international
organizations, including the United Nations Security Council, on lending EAU
joint contingents the status of a peace-making force;
— The setting up
of an inter-state center on problems of nuclear disarmament attended by
representatives of international organizations.
— All EAU states
except Russia maintain their nuclear-free status.
In the area of ecology, the following mechanisms must be formed in the
nearest future, according to the EAU project:
— An ecological
fund under the EAU Council of Heads of State, to realize ecological programs
within the EAU framework, to be financed by all member states;
— Coordination
of actions with international organizations to reduce the extent of
environmental pollution;
— Endorsement of
short- and long-term programs for major problems of restoration of the
environment and liquidation of the consequences of ecological disasters (the
Aral Sea, Chernobyl, the Semipalatinsk nuclear testing ground);
— The
endorsement of an inter-state EAU agreement on storing nuclear waste.
The Eurasian Union
of States is thus based on three principal provisions:
— Joint
supranational coordinating organs for the management of the economy, defense,
and foreign policy;
— A unified
economic space;
— A common
defense complex.
The
supranational institutions include the highest organ of political leadership of
the Union - the council of heads of state and heads of government; the highest
consultative organ, the parliament; the councils of foreign and defense
ministers;
And the interstate executive committee - a permanently functioning
executive and controlling body whose head is appointed by the heads of
government for a term which they themselves define.
As for the unified economic space, it may be built, e.g., on such a basis
as coordinating economic policies and mandatory programs; a common legislative
basis regulating relations between economic agents; a supranational currency on
the European ECU model; coordination of direct links between enterprises; the
setting up of joint and mixed industrial-financial groups, transport firms,
trade houses, and exchanges. The defense and foreign trade complexes may be
just as effective. The EAU as represented by its executive committee must
receive the status of an authorized representative in all the leading interstate
organizations of the world.
The practical realization of the provisions of the EAU
project in the bilateral Kazakhstan!-Russian relations is excellent proof of
the viability of this program.
On January 20, 1995, a package of extremely important
integration documents was signed during the working meeting between presidents
Nazarbayev and Yeltsin. This package included a declaration on expanding and
deepening Kazakh-stani-Russian cooperation and an agreement on the Customs
Union, which was also signed by Belorussia. Both of these were discussed in
detail before. This last agreement opens the way to the establishment of a
unified customs space to be followed by a unified economic space, as envisioned
in the EAU project.
With the setting up of the Customs Union, the economic
cooperation of the three countries is built on the principles of free,
non-discriminatory trade; a common market of commodities, services, capital,
and labor; and close interaction in the production, investment, and financial
spheres.
At present, the first stage in the formation of the
Customs Union is largely completed. The work done by the three sides is
generally recognized to be an important element of the realization of the
foundations of the Economic Union and the formation of the common market of CIS
countries.
The legal acts
on tariff and non-tariff regulation of foreign trade have been unified.
Kazakhstan and Russia have signed an agreement on unified control of customs
services. An agreement has also been reached on the identity of trade
procedures in both countries in relation to third nations, and unified
procedures have been introduced on the customs statistics on foreign trade and
customs registration of commodities subject to excise. Customs controls on
railroads and passenger air traffic between the two countries are lifted step
by step.
A treaty
has been signed between the Republic of Kazakhstan and the Russian Federation
on joint efforts on the protection of outer borders, the term “outer borders”
taken to mean the sectors of the border between our countries and the states
that are not part of the CIS. The edict of the president of Kazakhstan dated
September 19, 1995 On the Lifting of Customs Control on the Border between
the Republic of Kazakhstan and the Russian Federation concludes the first
stage in the formation of the Customs Union and orders the implementation of
joint customs controls on the Kazakhstan and Russian sectors of the outer
borders of the Customs Union.
At the second stage of the formation of Kazakhstani-Russian-Belorussian
economic efforts to form a customs union, the most important areas of
cooperation are a closer coordination of economic reforms; harmonization of
civil and economic legislation; unification of currency, tax, and price regulation
by the state with the aim of leveling out the economic and legal conditions for
the activities of commodity producers within a unified customs space; working
out coordinated positions of the members of the Customs Union in relations with
third countries and international organizations. At the meeting of heads of CIS
countries in November 1995, three more countries stated their desire to join
the Customs Union: Kyrgyzstan, Uzbekistan, and Tajikistan. Later, only
Kyrgyzstan went through with the necessary procedures and entered the Customs
Union.
Another example
of collaboration in the field of integration is the agreement on the Baikonur
space vehicle-launching site, which makes it possible to use this great
scientific and technological facility in the interests of Russia and
Kazakhstan, as well as documents on the issues of citizenship signed by the
presidents of Kazakhstan and Russian.
Let us consider in somewhat greater detail the problems of citizenship,
of which the solution on a bilateral basis was also outlined in the draft
project of the EAU.
Issues of citizenship became particularly prominent at the time of the
emergence and building of sovereign independent states after the
disintegration of the USSR, when tens of millions of former Soviet citizens
overnight ended up outside their "historical homelands." This problem
is as topical for Kazakhstan and Russia as for other CIS countries. More than
that, it often figures as one of the most important issues of bilateral
relations with Russia.
The more acute aspects of
this problem were lifted as a result of the signing in January 1995 by the
presidents of Russia and Kazakhstan of a treaty on the legal status of citizens
of both countries living on the territory of the other state and of an
agreement on simplified procedures for acquiring citizenship in moving from
one country to another. Well-known specialists from the two countries worked
fruitfully on these documents. Authoritative Kazakhstan! and Russian
politicians and jurists believe that these are innovative agreements without
parallel in the world, and they are a fairly rare example of regulating
bilateral issues on a civilized basis. The importance of these agreements both
for progressive development of our countries and for normal life of the citizens
of Kazakhstan and Russia cannot be exaggerated.
These documents envisage the introduction of maximally
simplified procedures for acquiring citizenship and for movement without
visas; they also offer possibilities for contract work and military service;
assert the rights of possession, use, and disposal of property; create
conditions for exchange of currency and transfer of sums of money by
individuals and corporate entities of Kazakhstan and Russia; and many other
provisions which reliably protect the rights and interests of the citizens of
the two countries.
Yet another sphere in which combining the efforts of
all the interested parties is needed is the legal status of the Caspian Sea.
The position of the Republic of Kazakhstan on this
issue is based on the need for an early drafting and signing of a convention on
the legal status of the Caspian Sea, of which a draft was worked out by the
Kazakhstan foreign ministry and sent out to all the interested states as early
as March 1994. Unfortunately, there has been no response to this initiative for
quite a long time now, and the agreement on regional cooperation on the
Caspian Sea issue is still at a standstill.
At the same time preserving this unique object of nature is a task that
the present generation must be worthy of.
The events of the recent years thus prove conclusively
the need to proceed to a new level of integration, which will fully conform to
the vital needs of the peoples. International experience shows that any
interstate association goes through various states in its development, becoming
enriched in the process with new forms of cooperation. The Eurasian Union
should be seen as just one of such transitional forms capable of optimizing
the solution of the problems facing the Commonwealth.
From the time of the publication of the draft EAU
project, politicians and scholars have been paying close attention to it. Four
major scientific and practical conferences were devoted to this subject, as
were hundreds of publications in Kazakhstan, Russia, and other states.
Politicians, scholars, and diplomats continue to study the EAU project with
great attention.
The current
period in history is characterized by a radical breakdown of the old way of
life. Society now faces difficult issues, and each person is subject to serious
trials It is quite natural under these conditions that the peoples of Kazakhstan,
Russia, and other countries with an interest in the unification of the
Commonwealth will find it easier to overcome these difficulties together. A
balanced attitude toward the past, a persistent realization of the present
potential, and confidence in a more certain future - only these things will be
able to give the peoples of our countries a natural feeling of spiritual harmony
and a sense of full-blooded life.
History is offering us a chance to enter the 21st century in a
civilized manner. One of the ways to achieve that, in my view, is the
realization of the integration potential for the establishment of the Eurasian
Union, which will reflect the objective logic of the development of the
post-Soviet space and the will of the peoples of the former Soviet Union to
achieve integration.
This is how President Nazarbayev, the author of the Eurasian project,
characterized the development of this idea and his current vision of its
future: "I still remain an adherent of integration of post-Soviet space.
As I formulated my vision of integration I laid no claims to total realization
of all the provisions of the project, being fully aware of all the political
connotations of that period. Two considerations were my primary motivation.
First, I wanted to generalize within a single whole the most realistic
proposals for further integration, which simultaneously appeared in the
countries of the post-Soviet space. Second, I wished to interrupt the
indecently drawn-out pause in the activities of the CIS institutions.
In the last two years there was movement in the CIS countries on some
issues that had been at a standstill, including
4. VITAL PROBLEMS OF THE
PRESENT-DAY STATE OF KAZAKHSTANI-RUSSIAN RELATIONS
The Present State and Prospects for Economic Cooperation between
Kazakhstan and Russia.
The top priority
area of Kazakhstan’s policy in foreign trade is the strengthening of economic
cooperation with Russia and consistent integration of the economies of the CIS
countries. This is determined by the traditionally strong economic links, a
high level of mutual complementarily and interdependence of two economies of a
once unified state, the size of the commodity market and identify of economic
problems awaiting solution. “Analysis of the results of development of the
economy of the former USSR and of experiences of economically advanced
nations,” President Nazarbayev stressed, “shows that the transition to the
market is objectively necessary and historically inevitable.”
The main feature of the present-day situation in Kazakhstan is the
increasing impact of the mechanisms that have evolved in the years of reform
and a weakening of the effect of non-market factors. In the initial stages, the
underdeveloped state of such important instruments of the formation of the
market as privatization, de-monopolization, absence of a competitive
environment, were the main sources of inflation in the republic, a worsening
state of the finances of enterprisers, an acute shortage of turnover capital, a
fall in production due to falling demand and real earnings of the main mass of
the population, as well as growing abuses in trade and banking structures.
The prevailing technological, economic and organizational standards made
a significant impact on the potential of foreign trade relations. “The cohesion
of the economic space of the former USSR was affected through centralized state
planning implemented by command-administrative management. In the process, the
country’s economy worked as a ‘single workshop’, and not all production and
economic links here were rational from the market point of view. The transition
to a market economy throughout the economic space of the former USSR required a
profound restructuring, and this called for considerable resources and time,”
Ex-Prime Minister A.M. Kazhegeldin stressed.
The policy of liberalization of foreign trade activity and of open
economy did not result in 1993 in any growth of exports. It amounted to $1.5
billion, thus remaining at the 1992 level. Shifts in the geography of
Kazakhstan export due to the re-orientation of foreign trade links to
industrially developed nations resulted in the strengthening of raw materials exports.
The share of machines, equipment and transport vehicles in the export dropped
to 2 percent, and the share of fuel and energy complex and that of metallurgy
rose to 80 percent. Rising domestic prices prevented partners from concluding
long-term foreign trade deals, stimulating instead commodity exchanges. The
share of barter and clearing deals in export operations made up more than 26
percent. More than 56 percent of imports were affected through exchange of
commodities. Barter operations were mostly in the nature of structurally
unbalanced exchanges. The republic suffer considerable losses due to inadequate
knowledge of the market conditions and the desire to access foreign markets at
any price.
A noticeable feature of
Kazakhstan economy is the low level of the development of machine building,
which is not up to present-day requirements, and this makes an adverse impact
on other branches of the economy, as it results in the common shortage of
metal-tooling products. This aggravates the shortage of spare parts and of
products used in several adjacent branches of industry and adversely affects
the standards of servicing.
Some of
Kazakhstan most important tasks in 1994 were the closure of, and changing
production lines at, non-viable enterprises and development of promising
export-oriented ones, which also satisfy domestic demand. This called for a set
of measures to identify enterprises in the state of depression, closing down
unprofitable lines of production in energy-consuming industries and rehabilitation
and reorganization of non-profitable production lines.
The basis of the development of
Kazakhstan, just as of Russia and many other CIS countries, is export of
natural resources. In 1994, the government introduced regulations for the
licensing of natural resources, and a law was adopted on payments for
utilization of natural resources. It was at that time that efforts were
initiated to attract domestic and foreign investors to develop the fuel and
energy complex. The development began of the Tengiz, Karachiganak, and some
other oil yields at oil fields continued to be introduced. Open – cut coal
mining was expanded at Ekibastuz, Maykubek, and Shubarkul coalfields, with the
aim of reducing the mining of coal underground at low-profit and non-profitable
mines of the Karaganda coalfields.
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