Summary: For Kazakhstan and Russia, bilateral relations will always be of paramount importance. They are more important than multilateral integration, because they existed before the creation of the Customs Union and will be preserved, even if the latter does not become.
By the end of 2013, the positions of the main participants in the unification process within the framework of the Customs Union were generally clarified. The December meeting of the Supreme Economic Council in Moscow was very important, during which the limits of possible integration were set. In particular, they are connected with the idea of adopting road maps for Armenia and Kyrgyzstan. The fact of approving such an approach meant that the plan for rapid expansion is on a formalized track, and this requires potential participants to have time to go through the accession procedures. Thus, the CU becomes more similar to the European Union, the creation of which provided for the equalization of the parameters of its member states. Accordingly, rapid expansion, motivated exclusively politically, is impossible.
POLICY OR ECONOMY
Actually, this was the position of Kazakhstan, which recently focuses only on the economic nature of the association, while Russia is increasingly striving to use the CU as an “umbrella” brand to unite a large number of countries in the post-Soviet space and even beyond .
Such an approach can be completely explained by Russian vital interests. Clearly, the desire to speed up the integration processes and the apparent dissatisfaction of a part of the Russian establishment with having to look for compromises with Astana and Minsk. This is partly perceived as an undesirable dependence on obviously weaker partners, which indirectly impede the realization of global Russian interests. But in economic terms, Russia undoubtedly dominates in the organization and theoretically could not pay attention to the opinion of two other countries.
However, Russia needs precisely the Customs Union, that is, the partner countries. But in order to interest them, attractive conditions are necessary. The latter implies the existence of relatively equal relations, which means that the Kremlin cannot use the potential of the CU solely at its own discretion. What are the interests of Moscow? If they are related to the economy, then Russia should be the first to oppose the admission of weak participants to the community, to advocate that all candidates go through the appropriate preparatory procedures. Otherwise, the economically strong participants of the project, primarily from Russia, will require significant costs, including direct payments.
Nevertheless, the Russian side is constantly expanding the list of candidates. At first it was Tajikistan and Kyrgyzstan, then Armenia appeared, then the issue of Ukraine began to be discussed. In all these cases, political factors play, no doubt, a more important role than economic ones.
For example, it is obvious that Tajikistan and Kyrgyzstan are of interest from the point of view of the need to ensure Russia's geopolitical presence in Central Asia. Starting from the 1990's. these two countries played an exceptional role here. Especially since Uzbekistan and Turkmenistan have chosen, in fact, the opposite vector of geopolitical orientation. For example, it was in 1998 year. At that time, only the Russian military presence in Tajikistan ensured Russia's influence not only in the region, but also in the strategically important Afghan sector. Therefore, a close relationship between Dushanbe and Bishkek with Moscow, in particular, within the framework of an integration association, would undoubtedly contribute to more effectively ensuring the interests of Russia in the region. Accordingly, the desire to include these two countries in the CU has a distinctly political meaning.
The situation is similar with Armenia. This country is already a traditional ally of Moscow in the Transcaucasus, Russian influence there can hardly be overestimated. True, Yerevan sought to cooperate with the European Union, but this was not particularly significant due to the peripheral position of Armenia. However, in 2013, the Armenian leadership takes a rather unexpected decision to join the CU, which is fully supported by Moscow. And again there is a step that is based not on economic, but on political interests. After all, from an economic point of view, the entry of Armenia does not make much sense: there is no common border, the volume of the economy is insignificant. But Moscow’s geopolitical reason is obvious, but Yerevan is concerned about its own security due to the continuing risks from Karabakh, as well as from the ambiguity of the situation around Iran’s nuclear program.
Another clearly political motivation is behind the discussion about the likely entry of Ukraine, which has actively developed in the last months of 2013. The variant with the CU was considered as a political alternative to the orientation of Ukraine towards Europe. In general, the completion of last year is indicative of the price that Russia has to pay for the policy of attracting new members to the organization. Large loans were issued to Kiev and Minsk, contracts for preferential supplies of oil from Belarus to 2014 were signed, it is necessary to pay for the construction of hydropower stations in Kyrgyzstan and Tajikistan, etc. There is Moscow’s desire to collect a certain number of countries in the CU, regardless of costs. The integration process is in a great hurry. About his quality can not speak. The emergence of all new candidates with their problems only complicates the situation within the association, even though too many problems have accumulated in it over two and a half years of work, some of which can rather be called deep systemic contradictions.
ASYMMETRY OF RELATIONS
The first thing you should pay attention to is not only the very different scales of the economies of the three countries that formed the initial basis of the CU, but also the different principles of their organization. The economies of Kazakhstan and Russia are very similar to each other. In addition, they are, albeit in varying degrees, but still integrated into the world economic system and live by its rules, which cannot be said about the economy of Belarus.
In the most general sense, Minsk is trying to preserve the Soviet model of governance, devoid of communist ideology. Naturally, the country inherited not only the previous production base, but also all the major vices of the economy of the USSR, which led to its collapse. The main thing - the overall inefficiency and lack of competitiveness. Obviously, the Belarusian national economy would not have survived without special relations with Russia, including the ability to resell products of refined Russian oil.
The merging of two market countries - Russia and Kazakhstan - with a non-market Belarus obviously contradicts the main rule of any integration - preliminary rapprochement, harmonization of participants' parameters. After all, the simple opening of customs borders not only makes available new markets, but also increases the level of competition. Therefore, having received the possibility of some growth in sales of its products in the markets of Kazakhstan and Russia, the Belarusian economy had to face reciprocal competition.
In addition, Russia and Kazakhstan on the eve of the creation of the Customs Union did not hide their intention to join the WTO, even the question of a joint application was discussed. Russia became a member of the WTO in 2012, Kazakhstan is going to follow its example in 2014. Accordingly, further liberalization of foreign trade is inevitable. It is not clear what will happen to the Belarusian economy, its status will become even more uncertain, and the situation will only worsen. Belarus today looks like the fifth wheel in the integration cart.
Not everything goes smoothly in the economic relations of two clear leaders of the CU - Moscow and Astana. Among the arguments of proponents of integration was the thesis that Kazakhstan with its low taxes (VAT 12% against Russian 18%, 10% of income tax against 13% in Russia, a much lower social tax), more favorable economic climate (47-place rated by Doing Business against 112, Russia) will definitely benefit from integration into the Customs Union. Theoretically, Kazakhstan could become a platform for the production of goods, which would then have access to the market with a population of 170 million.
Expectations, however, did not materialize. Moreover, according to the Eurasian Economic Commission, imports from Russia to Kazakhstan from 2010 increased from 12 billion to 17 billion. If we compare it with 2009, then in this last year before the start of the TS operation, Russian imports amounted to 9 billion dollars. That is an increase of almost 90 percent. (However, it must be said that in 2008, before the crisis, imports from Russia reached 13,5 billion, and then fell to 9 billion just in the 2009 year.) At the same time, exports from Kazakhstan to Russia in 2012 (6,1 billion dollars) practically remained at the level of 2010 (5,7 billion dollars). Moreover, it almost coincided with 2008 (6,2 billion dollars). In short, exports from Kazakhstan to Russia are stable, and the existence of a vehicle in no way affected it. The situation with the export-import balance in the relations of Astana and Minsk is even more indicative. Imports from Belarus from 2010 doubled to 700 million based on 2012, while exports from Kazakhstan to Belarus fell from 100 million to 90 million. According to the results of 10 months 2013, the situation has changed slightly.
Usually, in the expert community of our countries, diplomatically speak of a general increase in commodity turnover during the CU, without indicating the state of the export-import balance. Otherwise, it will be necessary to agree that the liberalization of foreign trade within the framework of the union did not bring concrete results to Astana. At the same time, over the years of the existence of the Customs Union, Kazakhstan has become an increasingly important sales market for the Russian economy. This is evidenced not only by dry figures, but also by quality indicators. For example, 26% of all imports from Russia to Kazakhstan are machinery and equipment. In monetary terms, according to the results of 2012, it is 4,5 billion dollars. At the same time, in the structure of Russian exports, machine-building products according to the results of 2012 amounted to 5%, in monetary terms - 26 billion dollars. A part of this volume is military products. So, the largest export item from Russia in 2012 was aircraft (3,1 billion dollars). These are military fighters. Civil export of engineering products is about half of this volume. It turns out that Kazakhstan provides a market for about a third of all non-military engineering export from Russia, and in this, of course, the vehicle plays an important role.
There is no need to talk about the use of the initial advantages that Astana had before the start of integration. On the contrary, Kazakhstan is becoming an increasingly important sales market for Russia and Belarus. In addition, the Kazakh economy faced a number of other problems. Among them is the low competitiveness of the business compared to the Russian one. Affected by the difference in the nature of the economic policies of the two countries over 15 years. Kazakhstan traditionally has milder business conditions, which was the result of market reforms of the 1990s. Accordingly, there are fewer large companies, but there are more small firms in the services sector, in production and in agriculture. On the one hand, this is an advantage of the country, because the mass of small owners creates a petty-bourgeois environment and does not depend on the state. On the other hand, there is a drawback when you have to compete with large companies from neighboring Russia.
For the latter, the Kazakhstan market is a small share of their activities. The paradox is that there is no point in starting production in Kazakhstan if you can simply send 10% of Russian production to the country. This situation is valid for some international companies that have factories in both Kazakhstan and Russia. For Astana, this means loss of jobs and taxes.
In general, 6 billion from Russia and Belarus, which grew imports from these countries to Kazakhstan over the years of the CU, led to a noticeable reduction in jobs in the Kazakhstan business, as this amount covered just the consumer goods sector.
It should be borne in mind that Russia and Kazakhstan have stable volumes of mutual deliveries of products inherited from the Soviet past. For example, Kazakhstan traditionally sends 20 – 30 million tons of coal from Ekibastuz to Russia. This is almost 15% of all exports to Russia. Iron ore pellets are also supplied from the Sokolovo-Sarbaysky deposit to the Magnitogorsk Metallurgical Plant. Major articles include uranium from Kazatomprom, natural gas from Karachaganak to the Orenburg Gas Processing Plant, and wheat.
And there is not without problems. So, in Russia, in the warehouses of coal companies following the results of 2013, up to 30 million tons of unsold coal remained, and, for example, the governor of the Kemerovo region Aman Tuleyev considers it inappropriate to import Kazakhstani raw materials. In turn, Kazakhstan has repeatedly expressed the intention to process gas on its territory, because supplies to Orenburg go according to internal agreements, and therefore low prices. If suddenly tomorrow coal or gas falls out of Kazakhstan’s exports to Russia, the situation with the export-import balance will simply become indecent.
In addition to low taxes in Kazakhstan, a more liberal administration, the state is present in the economy less than in Russia. This is one of the reasons for the disproportion, the Russian bureaucracy is objectively more efficient than the Kazakh one. In particular, even under the conditions of the CU, she was able to create a whole system of bans on the export of Kazakh products to Russian territory. At the same time, there are no obstacles for the delivery of products from Russia to Kazakhstan.
Another important factor is the significant increase in prices in the consumer market in Kazakhstan after the start of the Customs Union. Certainly, a part of the domestic price increase is connected with the state policy. For example, collateral at the expense of the consumer investment of energy companies. Nevertheless, it was a big surprise. Traditionally, prices in Kazakhstan are lower than in Russia. In addition, Russian imports are often cheaper than Kazakhstan products. The same situation with imports from Belarus. Theoretically, prices should have fallen, it always happens when cheap imports come. But in our case they have grown. This is probably due to the convergence of the economies of Russia and Kazakhstan: prices are reaching for a higher Russian level.
Finally, an important issue is related to the difference in policy between national currencies. In Russia, the level of fluctuations of the ruble is usually very significant. The Russian Central Bank thus reacts to a change in market conditions, and a weak ruble helps to support exporters. In Kazakhstan, the tenge is stable, many say that in fact it is pegged to the US dollar, although the National Bank has always denied it. Within the CU, this situation is extremely unprofitable for Astana, because the weakening of the ruble automatically increases imports from Russia.
It is not surprising that in Kazakhstan, in recent years, local business has been actively opposing the CU, with the exception of those large enterprises that exported coal and gas, as well as exporters interested in transit through Russia. But among the population and especially in the intellectual environment, the mood is completely different.
One of the consequences of the work of the TS was the beginning of heated discussions. They almost did not affect the general public - the state policy in the field of information affected, but among intellectuals, controversy took on a rigid character.
Traditionally in Kazakhstan, both the state and the society are focused on maintaining friendly relations with Russia. This is true for the Russian society and state. In our countries, only politicians of a nationalist orientation were critical. The very idea of combining lay on fertile soil. Here and nostalgia of the older generation at the time of the USSR, and the desire to see in the CU some kind of replacement for the still powerful state. Part of the hope of national minorities of Kazakhstan - Russians, Ukrainians, Belarusians and some others - to return to the old times. And the concept of joint recovery of industrial production, avoiding commodity dependence and much more.
Sincere supporters of integration both in Russia and Kazakhstan have sharply intensified. As a result, a powerful propaganda wave was formed, which covered public opinion.
The problem, however, is that Russian supporters of the restoration of imperial statehood saw in the Customs Union a prototype of a new empire and a way of reviving Russia's former power. Among them can be conditionally identified "Eurasians" and "Imperials". "Eurasians" are traditionally tolerant towards Kazakhstan. They proceed from the common interests and destinies, following the logic of Lev Gumilyov, who highly valued nomads and saw them as a serious source of Eurasian imperial statehood. At the same time, the "Imperials" are rather intolerant with respect to the independence of Kazakhstan. They, voluntarily or not, question its sovereignty. According to their logic, Kazakhstan is an accidental, failed state, and this is his only chance to return to the big Russia.
Such an information wave, pressure from both the “Imperials” and the “Eurasians” provoked a response. The number of opponents of integration with Russia in Kazakhstan has increased dramatically. And not only nationalists, but also quite moderate citizens were among them. The key issue was the question of state sovereignty, to which the Kazakh part of society is very sensitive, especially its intellectual environment. Therefore, when various Russian experts periodically began to question the sovereignty of Kazakhstan and the results of its development, this caused concern.
Contributed to the concerns and the revitalization of the Russian state. During 2012, a number of initiatives were launched aimed at creating supranational structures in the CU. Among them stood out the idea of forming the so-called Eurasian Parliament. It was assumed that the deputies of this body will be elected in accordance with the population, and its decisions will give legitimacy to the decisions of the Eurasian Economic Commission as a kind of common government of the Eurasian Economic Union. However, Kazakhstan would receive only 12% of seats in this parliament. Depending on the authority that the EEC would end up with, the structure began to resemble a federation. Given Russia's absolute dominance in the union, in this case, it would simply be a “expanded and augmented” edition of the Russian Federation.
In addition, Russia offered a single currency. From the experience of lengthy negotiations on this topic with Belarus in the 2000-ies. it is known that Moscow considers: such a currency should have a single issuing center. Consequently, we are talking about the Russian ruble, which will become the currency of the new association.
Kazakhstan took a different position. If you create a new currency, you must follow the path of the European Union and first make something like a unit of account - the ECU, and then work on creating common money such as the euro. But such a currency can not be the ruble. Refusal from tenge would mean for Astana a loss of a part of state sovereignty. It is clear that Russia, for example, will never agree with this.
Over time, the contradictions more and more. Periodically, they come out in the form of open conflicts, in particular around the Baikonur cosmodrome or the Dagestan poacher killed during detention in the Kazakh part of the Caspian Sea. But in Kazakhstan and Russia, systems of a strong vertical of power are similar to each other. As a result, all the contradictions arising were resolved at the level of heads of state. At the end of 2013, at meetings in Yekaterinburg, Minsk and Moscow, most issues were resolved. The parties clearly identified the position. In particular, I would draw attention to the tenth article of the treaty on good-neighborliness and cooperation, signed in Yekaterinburg in the autumn of 2013. The Eurasian integration, the CU and the Common Economic Space are mentioned here, but nothing is said about the Eurasian Economic Union.
To a certain extent, this is a fair decision, since bilateral relations have always been and will be of great importance for Kazakhstan and Russia. In a sense, they are even more important than multilateral integration. Our relations existed before the creation of the Customs Union and will continue, even if the latter suddenly will not.