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Currency for the penniless

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11.04.2003
text: Amangeldy Kirtaev , exclusively for Gazeta.kz
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The issue of single currency occupies the minds of economists and politicians. The statement, made a little more than a month ago in Moscow, now takes a concrete shape. And although there are at least 8 years until the "х" hour, passions around the future unitary currency are already heated.

It's interesting to note that up until the moment of the statement, nobody could even suppose that it was possible. Of course, periodically, rumours and presuppositions appeared and journalists re-checked them scrupulously in power structures.

But those are capable of keeping secrets. And, maybe, it's true that until the last moment only a narrow privileged circle had been aware of it.

Nothing heralded such developments. Although, of course, the experience of introduction of Euro was studied carefully by Kazakhstani and Russian specialists. International experts visited us and ours went to Europe as well. The Europeans final conclusion was unfavourable. The main question: can the Eurozone experience be applied in CIS? The answer is: no. A question: can the Euro introduction procedures be copied on the territory of CIS? The answer is: it makes no sense. But, well, if there is such a wish, learn the priceless experience of economic, financial and currency integration, that lasted more than 40 years in Europe.

Our people were observing the obvious.

The results of currency integration in Europe are generally positive. Margins and interest rates lowered, as a result a free surplus within the unitary currency zone could be directed to weaker areas, which had to be pulled up to the common level without any problem. It entailed an increase of employment, investment activities, and economic growth.

But our experts disagreed in their estimations about the (in)appropriateness of the Euro introduction experience on the territory of CIS. Some recognise that the unitary currency helps to lower transaction costs, which animates the foreign trade. Others, on the contrary, assert that the volumes of mutual trade between the countries of Eurozone did not change, while a decrease of transaction costs entails a decrease of the profits of financial infrastructure, in which the investment funds are accumulated, for the same amount. That is, it is a double-edged weapon. Others still, think that a common currency area is a way of reaching a political influence of a currency and to increase an influence of economies.

There were too many conferences and disputes on this subject, but no expert - from the number of our own or Russian ones, said: "Yes, we are ready".

The majority agreed that even preconditions for a resolution of this issue were not mature yet. In Europe the integration was carried out on the basis of mutual aspirations of businessmen and industrialists. They made their politicians carry out the integration. As for CIS, there was an opinion that even "from above" a unitary currency would not be imposed on the economies - there is no political consensus among the Commonwealth countries even on the much simpler issues.

They talked about it even in autumn, discussing and proving that our countries are not mature for a unitary currency. A single question, that was discussed in a practical area - it is an introduction of a main calculation unit within the EEU. Then, making his estimation to this proposition, Mazhit Yessenbaev, minister of industry and trade of RK, did not exclude that the rouble would be used on the whole territory of EEU. Actually, according to him, the idea of a unitary currency on the territory of EEU is promising. This issue has been discussed for quite a long time, and, considering the globalisation processes in the world, it is very urgent. True, for this it is necessary to bring legislations of all EEU countries into compliance with each other, in the first turn the tax and customs legislation.

Three or four months passed and the idea of unitary currency was expressed from a high tribune in Kremlin. Four countries - Kazakhstan, Russia, Ukraine and Belarus - decided to approach this subject in a cardinal way. And they have already presented another variant of a union. Really, the unitary currency can be introduced even today. Only if it happens somewhat without sufficient reasoning, then this decision will be of little value. And therefore it was decided to follow the example of Europe, which, according to many international experts, presents a classic example of integration, so that a gradual unification of economies could be started in order to introduce a unitary currency in 2011.

So far there weren't any concrete propositions as to how the currency had to be introduced, it seemed, that everything would be accomplished in a smooth manner. But when variants started to appear, it became clear that the common language would not be found so easily.

Russia suggests to use the Russian rouble as a unitary currency. Perhaps, there are some "imperialist" ambitions to it, given that Russia always was on a special account as a centre of the region. Even now, it appears that everybody is going to unite around it: Kazakhstan does not have any borders either with Ukraine, or with Belarus and it does not have any wide economic relations with them as with Russia. The same could be said by Ukraine and Belarus. And therefore, Russians believe, its "rouble" initiative deserves encouragement and support. Belarus, of course, can agree with this variant no problem, as it was already going to switch to the rouble after some time. Ukraine cannot propose its grivna. It understands very well that this word can keep warm Ukrainian souls, while for Kazakhs, for example, it will be obscure and irritating. As a compromiss the president of Kazakhstan offered to baptise the new currency "altyn". It would seem that it's not a Russian word, having Turkic roots, but… it reminds of something too familiar. A bit forgotten, but familiar. Three kopecks in the old times. We had no penny and here comes an altyn!

Russia, so far, abstains from any comments. If its own proposition is not OK, a significant pause should be made. Moreover this issue is the last one on the agenda of regional integration and there is more than enough time for thinking.

But the issue of the new currency name is not the main one in this area. Much more important is another one - if a supranational bank is going to be created. According to Grigorij Marchenko, head of the National Bank of RK, an establishment of such financial institution is a sole right decision. Because Russia is going to have the same equal relation to the new currency as the other countries. And if the Russian rouble is introduced as a unitary currency and the procedure of an appointment of the chairman of Central Bank remains the same it will appear that in the new economic area the president of Russia and its State Duma will be the main figures, because they appoint the chairman of the Central Bank. And it reminds of something…

The prospect of an establishment of the unitary economic area is really tempting. Not only for those, who already expressed a wish to participate in the integration, but also for other countries, particularly, for Kyrgizia and Tajikistan, EEU members that remained beyond the planned union on principally new conditions as per preliminary agreements. Only due to an integration it is possible to extend the market in the region. Perhaps, joining later doesn't mean being late. By that time all issues, the unitary currency included, will be resolved and nobody will be keeping proper hands away from friendly handshakes.


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