Will the CES unite all?
text: Oleg Sidorov , exclusively for Gazeta.kz
The Common Economic Space is the most discussed subject of late in financial and political circles. Many politicians and economists have different estimations for prospects of this integration project.
At the same time the destiny of the CES today depends to a big extent not on politicians, but on representatives of the economies, including financial and industrial groups.
Moreover, the four countries: Russia, Kazakhstan, Belarus, and Ukraine, which have shown interest in this integration have taken diverse positions towards this "brainchild" of theirs recently.
At a first glance, a certain distancing from this project by the CES participants shows political ambitions that play a primary role when decisions are passed by the CES member states.
On the other hand, everybody realises that the time tested thesis that "politics is a concentrated expression of economics" is currently a determining factor on many parameters that influences significantly decisions of all states all over the planet.
It should be noted that in all four countries interested in creation of the Common Economic Space there is a tendency to enlarge proper influence zones among financial and industrial groups capable of achieving the international level.
In this respect the governments of Russia, Ukraine, Belarus, and Kazakhstan creating the CES counted for certain economic and financial relief in some areas of the international co-operation.
Other important arguments that played a determining role in the decision of these four states to create the CES were the following historical factors:
- the closed technological production cycles (when an extracting venture is on the territory of one country, a processing venture - in the second country, the completion takes place in the third one etc);
- the historical distribution of labour stemming from the above item because many post-Soviet republics maintain statuses of either extracting, or processing industries, in which a priority was given only to one, the most developed industry and correspondingly professional cadres were prepared;
- the long time joint cohabitation of different ethnic groups in one state, resulting in mixed families, elements of a common cultural space, the absence of a language barrier;
- the stability of interethnic and interreligious relations in the CES countries;
- the timeliness of creating such integration project as the CES;
- the high level of investment attractiveness of the CES;
- the insignificant level of ambitions among the CES governments.
The abovementioned factors catalysed actions of the CES governments. And the first steps were directed at institutional chnages.
Precisely - a High Level Group for the formation of the CES was created, which worked out many basic documents such as the following:
- the Concept of the CES formation.
- the Agreement on the CES formation.
- draft agreements on movement of people and currencies through the CES borders.
- the order of VAT exemption by the CES countries in accordance with the destination principle.
Taking into consideration the fact that the purpose of the CES formation is to create conditions for a stable and efficient development of economies of its member states and to increase the living standard of the populations, a stable interest can be forecasted for years to come among the CES governments.
Therefore many industrial and financial groups, located on the territories of these four countries consider a number of events to be necessary:
- the formation of a free trade area;
- the unification of customs rules;
- the provision of state subsidies;
- the compliance of legislations on intellectual property;
- the unification of tax policies and currency regulations.
It is important to note here that the formation of a free trade area, the achievement of a common customs tariff will also require a certain will from the CES states, which will be expressed by signing a number of documents.
And these documents will be signed in concrete terms. At the first stage by 1 December, 2005, 29 documents must be inked, and at the second stage, by 1 March, 2006 - other 15.
However so far there is a sort of uncertainty in actions of the four governments with regard to the further integration of the Common Economic Space.
And the basic feature influencing the slowdown in the CES construction is the parallel work of the CES member states on accession to the WTO.
Taking into consideration the fact that the World Trade Organisation exists already several decades, that there are much more member states and that it is completely different from the CES, one shouldn't forget that the point of view according to which the membership in one organisation does not contradict the membership in the other one.
It is especially noteworthy in the position of Ukraine.
And although the financial and industrial groups are reaching the world market through the accession to the WTO, the CES participation allows to establish closer and mutually beneficial economic relations, which is sometimes not understood by certain CES members.
It demonstrates one thing: the governments do not find mutual understanding with financial and industrial groups. Taking into account the fact that such relations exist in Ukraine, one can say with certainty that this lack of mutual interest will be influencing in perspective not only the dialogue between politicians and businessmen, but it can also change vectors of business activities from own countries to other countries.
Although it is not excluded that after realising possible consequences of the political demarches for businessmen, the course of the countries is going to switch in favour of the CES. It would mean a beginning of a constructive dialogue between the government and financial and industrial groups.
It can also be assumed that the demarches are due not to political games of Ukraine, but rather to government actions uncoordinated with interests of the financial and industrial groups.
It means that the discussion on the becoming of the CES and on its further institutionalisation will occupy quite a lot of time.
But the main thing is that the other member states stay true to the original idea of the integration without falling into the trap of ambitions capable of influencing the CES negatively.
Also in the "In Depth"
09.01.2013 2012 marked by multiple events in Kazakhstan