Commentary EurAsEc: Who will Undertake to Implement Old And New Ideas?

The member countries of the Eurasian Economic Community, EurAsEC, held an economic forum in Moscow. EurAsEC is the most successful economic community in the post-Soviet space. Indeed, mutual trade between its member countries, namely Russia, Belarus, Kazakhstan, Kyrghyzstan and Tajikistan, is two times as much an average commodity turnover between separate members of the Commonwealth of Independent States, CIS. And that is not surprising. Being a relatively young organisation (it was established on May 31st, 2001), EurAsEC countries have already agreed nearly 60% of their tariffs, whereas the amount of tariffs agreed on within the older CIS is approximately twice as little.

Yet, business people and political leaders of the EurAsEC countries have come to Moscow not to report successes and express respect to each other. Unlike the CIS, the Eurasian Economic Community is not an elite club of the presidents of the former Soviet Union. Nor is it a venue of lobby meetings that aim to resolve political disagreements between the former Soviet republics.

EurAsEC's objectives are simultaneously more down to earth and more ambitious than those of the CIS. The community is more down to earth since it does not indulge in making altisonant political declarations, preferring arid economic analyses. And the organisation's ambitions are evident from astonishing integration breakthroughs it has achieved. The EurAsEC countries are gradually integrating into a common customs, trade, energy and transport space forming what may one day become a powerful regional economic bloc.

The Eurasian Community's topmost objectives are generally known, and they were reaffirmed at the Moscow forum. By 2005, the Community countries plan to establish a common customs space by introducing common to its members tariffs on all the goods the Community exports or imports and by closing down the customs offices thus clearing way for a free trade zone. The next step will be to establish a common economic space, to try to introduce common fuel, primary resources and stock balances and finally adopt a common currency, presumably the Russian rouble.

Being a major economy Russia has grown into a habit of domineering, dividing member countries into major and minor ones, something that is not welcomed at EurAsEC, which is praiseworthy. The Community is set not to repeat the CIS' mistakes. EurAsEC signed its first ever agreement in Kazakhstan's capital city of Astana, before the Community was formally established. Kazakhstan has ever since been the most active in advancing new initiatives. The Caspian being an inland salt lake, the republic has no access to sea and has therefore an intense interest in the inter-state integration on the continent. Kazakhstan was the only member country, which was represented by its president at the Moscow forum, the fact that speaks volumes.

Whilst in Moscow, President Nursultan Nazarbayev opened Kazakhstan's Year in Russia.

The problem is, the Eurasian Economic Community is facing both internal issues related to common tariffs, for one, and external ones. The Community should have been created at least 10 years earlier. The world's largest trade blocs, like the European Union and the North American Free Trade Agreement, NAFTA, would not have then be confronted at talks over WTO membership by single EurAsEC countries, but a strong-knit and powerful EurAsEC, which would be predictable to itself and its foreign partners. The EurAsEC members agree the membership in the World Trade Organisation is vital. One of its members, Kyrghyzstan, has already joined the WTO. Besides, in that case the countries, particularly Russia, would not be facing the present difficulties when negotiating their prospective WTO membership.

The countries missed the chance back in the 1990s. This, however, does not mean they are in the deadlock. Last year's EurAsEC forum resolved that the member countries should bring their WTO entry processes in harmony. So, things can still be amended. Common tariff procedures can form the basis of the Community's single economic policy. This does not imply the Community countries will no longer have to agree their policies at talks with the WTO.

A lot of serious ideas on further, more profound integration were voiced at the Moscow forum. Russian Premier Mikhail Kasyanov proposed the rouble be adopted as the common currency all across the Eurasian Economic Community, saying it would be a temporal measure aimed at speeding up adoption of the common system of payment in national currencies. Apart from that, Mr Kasyanov urged adoption of the common fuel and energy balance, the effort that would aim to create a gas and transport alliance of a sort, which would be open to other CIS countries.

Anatoly Chubais, chief of Unified Energy Systems Co, Russia's electricity giant, went further urging establishment of a common energy market.

The proposals were approved overwhelmingly. They were voiced at previous EurAsEC gatherings inevitably winning enthusiastic support. The governments, private-owned businesses and investors now have to step in to implement those ideas and proposals.