Kazakhstan and Eurasian
economic integration:
benefits, costs and
prospects
Nargis Kassenova
KIMEP University
Promised benefits
OMore trade (market of 170 m people and better
opportunities for doing business in Russia and
Belorussia)
OMore attractive for companies and investments
because of lighter taxation and better “doing business”
indices
OAccess to Russian domestic tariffs for transit of goods
OPreparation for WTO
ONo other alternative – it will be easier to withstand
crises together
Kazakhstan-Russia trade
2009
2010
2011
2013
Trade
turnover
$12.4b
$17.9b
$22.7b
$23.4b
(17.9%)
Import
$9b
(31.3%)
$11b
(39.4%)
$16.2
(41.4%)
$17.6b
(36%)
Export
$3.5
(8%)
$4.8b
(9%)
$7.5
(8%)
$5.8b
(7%)
Trade turnover in 2008 – $20b (before crisis)
O Trade creation or trade diversion?
O Ad valorem equivalent tariff rate increased
from 6.45 % to 12.1%
O Trade regime less liberal
O Kazakhstan - EU trade:
O Turnover in 2013:
O $54.7 b (41%)
O EU imports – $9 b (share fell from 29% in
2009 to 18.6% in 2013)
O Exports to EU – $45.6b (53.9%) in 2013
O Kazakhstan – China trade:
O Turnover in 2013:
O $22.7 b (17%)
O Imports: $8.3 b (17.1%) against $3.5 b
(12.6%)
O Exports: $14.3 b (17.1%)
O Problems experienced by Kazakh producers:
O Certification
O Subsidies
O Larger capitalization of Russian companies
O Some success stories: automobile industry,
textile, computer equipment (?!)
O Black market
O Access to Russian domestic tariffs:
O Promised unification of transport tariffs
didn’t take place, instead Kazakh transport
companies as of 1 January 2014 pay
international tariffs
O According to the Treaty, common market for
gas, oil and petroleum products by 2025
O Preparation for WTO
O Delay with Kazakhstan’s accession,
confusion
O Withstanding crises together
O Crisis spillover effect
O Other benefits:
O Human factor: more comfortable for
ethnically Russian population in the country
O Good relations with Russia
Other discontents
O Weak negotiators on the Kazakh side
O Imbalances in decision-making
O Differences in goals: economic vs. political
O Differences in desired pace and scope of
integration
O Prices on consumer goods went up
O (Food prices on the five-year period grew
70%)
O Spillovers: currency devaluation
(11 February – 19% tenge devaluation)
Prospects
O Birds view: Can it be a success-in-the
making?
O Eurasian integration seems to be in line with
global trends (in terms of growing
regionalism in trade), but goes too deep and
too fast
O Political integration (delegating part of the
country’s sovereignty) goes against the
trend of continuing nation-building
O There is no new set of attractive values that
would create the basis for a new union
O Russia is no longer our “window to the
world”
O Current Russian approach diverges from
Kazakhstan’s desired course
O Wait out and try to maintain its multivector
foreign policy following the aspiration to
integrate into the global economy and
community