Why Kazakhstan shows little interest in Eurasian Economic Union

Kazakhstan is dropping out of the Eurasian Economic Union

USA's investment in Kazakhstan accounts for 410 joint ventures and $45 billion. This was announced not so long ago, during Mike Pompeo's visit to the country.

Does it mean that Kazakhstan decided to finally abandon the Eurasian Union and began to move away from Russia, to integrate with other partners?

Pravda.Ru international observer Lyuba Lulko (Stepushova) talked about this in an interview with Pyotr Svoik, a Kazakh politician and economist.

Why Kazakhstan is making a U-turn from the EAEU

"It is worth recalling here that it was not Kazakhstan that left the Soviet Union. Kazakhstan adopted the declaration of independence when the USSR ceased to exist. In addition, Kazakhstan is deeply rooted outside the post-Soviet economy. Russia is in the top three of Kazakhstan's main foreign economic partners. However, it is not even in the top ten, if we talk about the investment part.

Kazakhstan's main strategic resources belong to other multinational companies. Today, for example, Kazakhstan gives more dollars on the balance of payments than it earns from exporting raw materials. We give it to foreign investors and foreign creditors. In this sense, Kazakhstan is so much immersed in this that we can hardly leave it behind us.

There is nothing surprising about Kazakhstan's nationalism, which the Russians may not like too much. President Tokayev is right here, because is there a post-Soviet republic that formed its post-Soviet identity on a basis other than ethnic one?"

"You had an enlarged meeting of the government recently, at which President Tokayev spoke. He said that Ekibastuz was an industrial mining center that was having major personnel problems. What is it about? If Kazakhstan has such great investment prospects, where did the Ekibastuz problem come from?"

"What did Ekibastuz use to be? How did it emerge practically from scratch near Pavlodar in the steppe?"

  • Ekibastuz is coal - not only for Kazakhstani, but also for Russian power plants, thermal power plants and hydroelectric power stations in the entire region, including South Urals and even a part of Siberia.
  • This is also electricity, and Ekibastuz plays the role of the middle pillar of the energy bridge from Russia's Eastern Siberia to the center of Russia, and Ekibastuz is a bridge from Omsk to Tashkent.

"Now what? The energy bridge does not work. Everybody switches to their own coal.

The Russians use Kuznetsk coal. Everyone decides their own issues within the framework of their sovereign competence. There is simply no cooperation per se.

They say that by 2025 we will have a common electric market again? Maybe we will, but maybe we will not. We do not have it now, and I have to say that the mutually beneficial economic system is falling apart."

"What is the reason behind it? Is coal leaving the fuel market?"

"The reason is about sovereignty being the highest value. We all want sovereignty. We all decide out problems within the scope of our own sovereignty - this is the way it works.

The Eurasian Union is a trade union, and each member of the Union has its own sovereignty, they sit down to discuss things and decisions can be made only consensually. There are no supranational competences, even in those areas that are clearly beneficial to everyone.

Why doesn't it work?

Some countries, and Kazakhstan is one of them, is strongly rooted, shall we say, beyond Russia. Kazakhstan is head over heels in foreign economies.

Probably, Russia also has its own reasons why it should spend resources only on herself, not proposing any joint projects. Moreover, Russia is the only one of all the former parts of the USSR, which, of course, has beneficial relations with everyone.

Who was subsiding whom in Soviet times is a debatable question. Yet, when we all parted, everything fell into place. Russia retained residual economic relations with all republics of the former USSR without exception, but all of those relations are in Russia's favor.

Why does one need to integrate if Russia successfully collects tribute from all other republics?

It is clear already that one needs to reform the whole thing into the format of joint investment development so that everyone would have enough money assets for their development, in order to be able to use this money to meet the needs of the general plan tailored for common economic objects.

Should this ideology be formulated by President Putin? I'm sure someday he will formulate it. President Tokayev should do the same too, but some may give him a sidelong look for that.

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Author`s name Lyuba Lulko