EAEU sums up five years of existence, but Tashkent still doubts

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EAEU sums up five years of existence, but Tashkent still doubts 28.02.2020 13:11

Not so long ago, the Prime Minister of Uzbekistan Abdulla Aripov, referring to the problems of labor migration, said that the integration of the republic into the Eurasian Economic Union (EAEU) will significantly improve the situation of citizens working in the organization’s countries, and will also positively affect the socio-economic situation.

At the same time, Tashkent has been considering the issue of joining the Union for more than a year and plans to bring this issue to the parliament for discussion. Meanwhile, according to Aripov and expert estimates, about 2.2 million Uzbek people in Russia spend more than two billion US dollars on paying patents for migrants alone.

While the pros and cons are being weighed in the country, the results of the organization’s first five-year plan have been summed up in the Eurasian Economic Union. The heads of the EAEU member states and representatives of the expert community conclude that the integration project has taken place and benefits all its participants, as well as partners who have established close mutually beneficial contacts with the Union. Volumes of domestic and foreign trade are growing, including export from the EAEU to the markets of third countries. At the same time, the share of raw materials decreases and the production of goods with high added value develops.

Recall that the Eurasian Economic Union is an international organization created on the basis of the Customs Union of Russia, Kazakhstan and Belarus, as well as the Common Economic Space in order to ensure the freedom of movement of goods, services, capital and labor, and to conduct a coordinated, coordinated or uniform policy of member states union.

The agreement on the creation of the EAEU was signed on May 29, 2014 in the capital of Kazakhstan, Astana, and entered into force on January 1, 2015. Armenia and Kyrgyzstan joined the organization in 2015, and Moldova has observer status since 2018. In addition, Vietnam, Iran, China and Cuba have signed free trade zone agreements with the EAEU. In total, about 50 countries expressed intentions for cooperation with the Union.

Most clearly, the five-year development of the organization is expressed in the volume of GDP of the EAEU states, namely, 1.9 trillion US dollars or 3.2 percent in the structure of world GDP. In addition, there was a significant decrease in inflation in the countries of the association - according to the results of 2019, the minimum value of annual inflation was formed in Armenia - 0.7 percent. In other republics, this indicator was within the national targets and did not exceed the calculated threshold value established by Article 63 of the EAEU Treaty: in Russia - 3.0 percent, Kyrgyzstan - 3.1 percent, Belarus - 4.7 percent, Kazakhstan - 5, 4 percent. It is worth noting that in 2015 the average inflation rate of these states was 13.7 percent.

At the same time, according to the Central Bank of Uzbekistan, in 2019, the inflation rate in the republic amounted to a record high among Central Asian countries of 15.2 percent. But it is precisely the provision and maintenance of price stability that allows creating the conditions for taking active actions to stimulate innovation and investment activity in order to maintain high and sustainable rates of economic growth.

Tashkent has already lost time and missed the opportunity of simultaneous integration with the neighboring countries into the EAEU. It is already lagging behind them in many macroeconomic indicators. If the country's parliament makes a positive decision to join the Union, for some time Uzbekistan will experience a serious burden in connection with the transformation of the country's legislation in accordance with the standards introduced in the organization.

At the same time, Uzbekistan will have to make significant efforts to achieve the EAEU's set of medium-term macroeconomic policy priorities, namely ensuring the dynamic development of the Union by deepening cooperation in industry and trade, creating a common electricity market and a single services market, and improving customs cooperation. The implementation of these measures should not only ensure the free movement of goods, services, labor and capital within the framework of a single economic space, but also significantly improve the institutional and legal framework of the EAEU.

Along with these tasks, the priority for the EAEU is the digital integration of the economies of the association's members, which will also be a serious challenge for Uzbekistan. Such a step is important in areas where common markets are created and the joint potential of the member countries of the Union is involved. First of all, we are talking about trade, finance, transport, the labor market, government procurement, industry and agribusiness. According to the Eurasian Economic Commission, the digital transformation of all areas of economic activity will contribute to the technological improvement of the economies of the EAEU countries, giving a unique opportunity not only to maximize the use of technological and technical solutions offered by global multinational companies, but also to create their own digital products.

The first five years of the existence of the EAEU created the necessary basis for the further development of the economies of the states that are members of or in any way cooperate with the association. Of course, there were and will be all kinds of difficulties and problems during the development of the Union, not a single serious association can do without it, especially uniting more than 180 million people. In the existing realities, not a single state is capable of successfully developing without interaction within the framework of various economic or trade associations, including in the light of the external sanctions policy pursued by some countries without regard to the commitments made within the framework of international organizations. In this regard, Tashkent’s indecision regarding accession to the EAEU is rather ambiguous. Is it possible that following the results of the decade of the Union’s existence, Uzbekistan (if you still don’t join) will become the raw materials appendage of the economically more developed countries of Central Asia?