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The Results of First Year of EEU
Alexander Yakovlev, Commercial Representative of the Russian Federation in the Republic of Kazakhstan
On May 29, 2015, one year passed after signing the Agreement on Establishment of the Eurasian Economic Union (EEU), which gave an additional impetus to the mutually beneficial, equitable development of the economies of Russia, Kazakhstan and Belarus, including such areas as the industry, transport, energy, agriculture, and it promoted to a more effective use of the equal partnership potential. The business circles of our countries have already appreciated the advantages of the provided conditions, expressed in terms of trade, investment, growth in the number of joint ventures and projects in both the manufacturing and services sectors.
I would like to cite some figures, describing the development of mutual trade between Russia and Kazakhstan. The past year 2014 was marked by a sharp decline in global prices and demand in the commodities. Of course, it affected the performance of mutual trade between Russia and Kazakhstan, but despite all the external negative factors, Kazakhstan in Russia's trade turnover ranked 12 among all of Russia's foreign trade partners, and Russia took the first place in Kazakhstan's trade with other countries.
According to the information of the Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan, last year this figure was about $ 19 billion USD, Kazakhstan’s export to Russia reached more than 5 billion USD and the imports from Russia was about 14 billion USD. It should be emphasized that the structure of Russian supplies to Kazakhstan has the steadily growing share of high value-added products: machinery, equipment and vehicles, as well as wood products, textiles, leather products and food.
Considering the structure of the mutual supply of two countries, it should be noted that Kazakhstan's export to Russia consists of the mineral products, reaching approximately half of total supplies, about a quarter are the metals and metal products, the products of the chemical industry amount to 13%. About one-third of the supplies from Russia to Kazakhstan account for the equipment and vehicles, mineral products-more than 15%, metals and metal products, as well as the chemical products-13% higher per each indicator.
In 2014, a special attention was paid to the implementation of investment projects between Russian and Kazakh companies in the field of economic modernization. According to the Statistics Committee of the Republic of Kazakhstan, in the past year, the gross inflows of Russian investments in the economy of Kazakhstan amounted to more than 1.5 billion USD.
Currently, 58 major Russian-Kazakhstani projects, amounted to 6 billion dollars are implemented and is expected to be implemented in the territory of Kazakhstan. Expanding the range of competitive products with high added value has an importance for Russia and Kazakhstan.
The projects by more than 20 Russian companies such as Gazprom, Lukoil, UC RUSAL, Mechel JSC, INTER RAO UES, AutoVAZ JSC, EvroHimUdobrenia OJSC, VimpelCom (Beeline) CJSC are successfully implemented in Kazakhstan. There is also an increased cooperation in the financial sphere: a number of large Russian banks, like Sberbank, Alfa-Bank, VTB Bank, Rosselkhozbank, Uralsib Bank opened their branches and representative offices.
Among the projects, presently supported by Russian enterprises in Kazakhstan, I would like to mention the following ones:
- Assembly of combines, tractors and other agricultural equipment, implemented by Rostselmash company;
- construction of a car assembly plant and production Asia-auto cars, carried out by AvtoVAZ JSC;
- Assembly and maintenance of KAMAZ vehicles by KAMAZ-Engineering JSC, ensured by KAMAZ OJSC;
- coal mining project in Pavlodar oblast "Bogatyr coal", implemented by UC RUSAL.
- modernization of Ekibastuz HPP-2 by INTER RAO UES and the construction of 500 MW 3-rd and 4-th power blocks;
- project for further development of the network by Kar-Tel LLP, subsidiary of VimpelCom JSC (Beeline) and others.
In general, the Russian investors consider the as priority sectors for investment in Kazakhstan as follows: fuel and energy complex, uranium production, non-ferrous metallurgy, telecommunications, mobile communications and banking. Kazakh investors are rather interested in the Russian Agriculture (grain business, development of fertile land, processing, road infrastructure) and Russian real estate.
An important factor in bilateral economic relations remain the regions of our countries, which are based on the traditionally established industrial cooperation scheme. There are about 300 agreements, concluded in various sectors of the economy between the regions of the Russian Federation and the Republic of Kazakhstan.
A notable event was XI Forum interregional cooperation Republic of Kazakhstan and the Russian Federation as of September 30, 2014, held in Atyrau city. It was an exhibition, dedicated to "Innovations in Hydrocarbon Sector", and the expanded meeting of the Russian-Kazakh Business Council on cross-border cooperation. During the Forum and Exhibition 17 documents on cooperation between Russian and Kazakh sides were signed. Next, XIIth Forum of Interregional Cooperation between Kazakhstan and Russia will take place in September 2015 in Ufa (Russian Federation).
Development of regional cooperation between two countries is carried out within the frameworks of the Intergovernmental Commission on Cooperation between the Russian Federation and the Republic of Kazakhstan. On December 3, 2014 year its regular, 17th meeting was held in Astana. It addressed the issues, raised at the 16-th meeting of the subcommission in selected areas of cooperation, as well as the cooperation in the area of fuel and energy complex, nuclear energy, industry, transport and agriculture.
In addition, they analysed the implementation of the programme of economic cooperation between the Government of the Russian Federation and the Government of the Republic of Kazakhstan and the preparations for signing of an agreement between the Governments of the two countries to preserve the ecosystems of trans-border basin of the Ural River. After discussing the issues on the agenda, the signing of the Agreement on Provision of Insurance Coverage took place in a solemn ceremony within the framework of the financing project for the supply of agricultural machinery company “Combine Plant Rostselmash LLC between the EKSAR OJSC, KazAgroFinance JSC and KZ Rostselmash LLC.