Firstly, it is necessary to note that the period of Kyrgyzstan's accession to the EAEU coincided with a complex economic situation in partner countries, primarily Russia and Kazakhstan, which inevitably affected the overall integration process and macroeconomic indicators.
Secondly, Kyrgyzstan was unprepared for duty-free trade with EAEU countries, although the KR has been a member of the WTO longer than any other country, and during this time, the state should have developed immunity and the ability to combat dumping in the domestic market.
Thirdly, a negative factor in the process of incorporating Kyrgyzstan into the EAEU was the retention of obstacles and restrictions for Kyrgyz goods that remained at the Kyrgyz-Kazakh border.
Fourthly, thanks to joining the EAEU, the shortcomings of the economic model created in the KR over the past twenty-five years became apparent. Once again, the need for serious modernization and development of all production sectors was clearly demonstrated, but primarily in agriculture, processing, food, and light industries. Kyrgyzstan has been a "back market" for Chinese goods for too long, engaging in resale rather than production.
Within the EAEU, a sufficiently broad market for the sale of goods opens up; therefore, Kyrgyzstan can and should focus on creating competitive products and establishing an export-oriented economic model. This is not only an internal task for Kyrgyzstan but for all EAEU member countries, as the KR, in the absence of a sufficient financial base, needs serious investments from EAEU partners. This is a normal experience for any integration grouping. For example, within the EU budget, there is a significant allocation for regional assistance programs for member countries to ensure economic convergence within the union.
Speaking of positive trends, the process of adapting Kyrgyzstan to the technical regulations of the EAEU is nearing completion, funds have been allocated for the modernization of customs checkpoints, equipping them with the latest technology, veterinary and sanitary-phytosanitary control systems, and the creation of new laboratories.
By the decision of the EEC Council, Kyrgyzstan will join 43 sectors of the EAEU single services market. Kyrgyzstan's accession to the unified rules of the EAEU services market means that citizens of this country may see a reduction in service costs due to increased competition among business structures from the Union countries in the unified Eurasian services market.
To support Kyrgyzstan's integration into the EAEU, the Kyrgyz-Russian Development Fund has been established with a capital of 1 billion US dollars. Projects implemented by the Fund in the KR should contribute to overall economic growth and accelerate the adaptation process of Kyrgyzstan to the integration union. Priority areas for funding include: agro-industrial complex, sewing and textile industry, processing industry, mining and metallurgy, transport, housing construction, and infrastructure development. The Fund's chairperson, Nursulu Akhmetova, informed the public that they received 114 applications totaling 940 million dollars. It is essential to emphasize that a crucial point is how effectively representatives of the Kyrgyz Republic will utilize the provided financial opportunities.
Tasks for the KR in the future:
Kyrgyzstan needs to create favorable conditions for the development of the most promising sectors of production. Objective prerequisites for the emergence of new "Made in Kyrgyzstan" brands already exist today in the mining, textile, food, and meat processing sectors, as well as in the production of environmentally friendly products. There is a raw material base, its own power supply, low land rental costs, and relatively cheap labor. This long-term task will allow Kyrgyzstan to ensure not only its presence in the EAEU market but also, in the future, in the European Union. There are objective prerequisites for further development of the tourism industry.
Additionally, the legislative and executive branches of the KR need to create a genuinely attractive investment climate. To achieve this, it is essential first to resolve issues surrounding two major foreign projects in the republic's mining sector ("Jerooy" and "Kumtor"), as serious investments will not come without guarantees of private property rights, capital preservation, investor rights protection, and a transparent taxation system. Secondly, it is necessary to increase local population interest in the arrival of foreign capital investors or the creation of joint ventures, for which a mechanism should be established to guarantee local benefits in the form of social projects at the workplaces of foreign companies.
An equally important task is to provide quality information support for the EAEU project in the KR and to prevent the politicization of Eurasian integration issues in light of the preparations for the presidential elections in 2017. The decision for the KR to join the Eurasian Economic Union was made by the current President and Prime Minister; therefore, the lack of visible indicators in the country's development due to integration processes may become a subject of sharp criticism from political opponents, and the negative wave regarding the EAEU could be used in political battles as the presidential elections approach.
At the same time, it should not be forgotten that for an independent Kyrgyzstan, the issue of political stability is a necessary condition for state development and the further evolutionary formation of a unified national identity. Along with this, the task of the Kyrgyz authorities is to prevent pseudo-patriotic forces from stirring up society under various pretexts (historical, mental, linguistic) and "putting sticks" in the still fragile integration processes.
That is why it is crucial to pay great attention to the quality of information support for the EAEU project in Kyrgyzstan. Due to the economic crisis, the integration project is under external pressure, which is projected onto each participant. And the weakest link in the EAEU system is Kyrgyzstan. Overall, it can be asserted that Kyrgyzstan's integration into the EAEU is, unfortunately, not yet irreversible. Moreover, considering the pressure on the republic from the USA (which was particularly evident during the visit of US Secretary of State John Kerry), the unfavorable economic situation, and the lack of systematic information work may even lead to the republic's exit from the EAEU, which would negatively impact the image of the integration association and its further development.
Currently, not only ordinary citizens of Kyrgyzstan but also serious businessmen and many republican-level managers are expecting immediate global results from integration, while they do not notice the benefits and achievements from joining the EAEU that have already been obtained to date.
That is why it is essential to convey truthful and detailed information about the current integration processes and achieved results to everyone. The development and effectiveness of the integration project specifically in Kyrgyzstan will significantly depend on the integrity of the EAEU and the formation of favorable conditions for the entry of the next candidate – the Republic of Tajikistan.
It is unacceptable to allow internal problems, imperfections in the political and economic system to be blamed on the integration process. Integration is a mutual process of equal partners; therefore, expecting a significant multiplicative effect without internal transformations is unrealistic.
In turn, the highest Eurasian Economic Council and the Eurasian Economic Commission should pay close attention to Kyrgyzstan at the stage of further adaptation to the EAEU conditions. First of all, all remaining barriers for Kyrgyz goods must be eliminated. The single market for goods and services for Kyrgyzstan must start functioning in the near future. The existing problems have already been voiced by the President of the KR, A. Sh. Atambaev, at the meeting of the highest Eurasian Economic Council in Astana on October 16.
Among the necessary measures, it is important to note:
The creation of effective barriers against the re-export of goods through the territory of Kyrgyzstan, as during the transitional period (3-5 years), different import customs duties are provided for the Kyrgyz Republic compared to the EAEU's Common Customs Tariff.
Elimination of artificially created obstacles, especially at the Kyrgyz-Kazakh border, for genuinely free movement of goods produced within the Republics.
Strengthening the borders of Kyrgyzstan, which have become the external borders of the economic union, and enhancing customs control regarding third countries to reduce the risk of smuggling, drug trafficking, etc., as this is a necessary measure in the context of liberalizing the regime of internal borders of the EAEU.
Formation of a unified labor market, creating favorable conditions for labor migrants (currently, an Agreement with Kyrgyzstan on the procedure for citizens of one country to stay in the territory of another is awaiting the signature of the President of the Russian Federation).
Formation of a common budget by increasing duties on trade with third countries and redistributing it to regional development programs, particularly to equalize the level of economic development among EAEU countries.
Development of integration in the monetary and financial sphere, reducing dependence on the dollar exchange rate, transitioning to national currencies within trade operations inside the EAEU.
It is necessary to develop serious educational programs for Kyrgyzstan within the EAEU. Their main goal should be to raise the level of scientific and technological development and the emergence of highly qualified competitive labor resources in the KR.
The freedom of movement of labor should fully allow citizens of Kyrgyzstan to work and improve their qualifications in any EAEU country without obtaining work permits or patents, with the same rights and under the same conditions as resident citizens of the host country.
Overall, Kyrgyzstan has only been in the EAEU for a very short period; the first cumulative results can probably only be assessed next year. However, there is already an observed increase in the collection of indirect taxes on goods imported from EAEU member countries and an increase in the inflow of direct foreign investments from CIS countries and Russia.
The government of Kyrgyzstan is implementing a set of measures aimed at adapting the country's economy to functioning within the EAEU. During a press conference held on November 4, 2015, at the KNAI "Kabar," Deputy Minister of Economy of the KR Daniyar Imanaliev noted that the Kyrgyz Republic became a full member of the Eurasian Economic Union on August 12 of this year; after that, all customs procedures at the Kyrgyz-Kazakh border were abolished, the unified customs tariff, the unified commodity nomenclature of foreign economic activity of the EAEU, and the unified requirements for products established by the Union's technical regulations and other norms and provisions of the EAEU Treaty came into force in the republic. National legislation has been aligned with the EAEU Treaty. 39 laws of the Kyrgyz Republic and 51 resolutions of the Government of the KR have been adopted.
In our opinion, work in this direction will continue. With sufficiently intensive work from the national government and the structures created within the EAEU, it can be expected that membership in the EAEU will lead to increased competitiveness and enhanced production and export capabilities of the KR in the near future.
The main thing is progressive development and a positive attitude. An adequate perception of possible temporary losses, turning disadvantages into advantages. For example, on November 12, an article appeared in the leading socio-political newspaper "Vecherniy Bishkek" under the loud title "Ministry of Economy: Due to joining the EAEU, 'Junda' has not reached full capacity." Just reading the title alone suggests that there is nothing positive in it. Although the article mentions that serious re-equipment is taking place at the Junda oil refinery in the city of Kara-Balta, aimed at producing products that meet EAEU standards – "Euro 5." Based on the informational context, a more appropriate title for this article could have been "Kyrgyzstan's Accession to the EAEU Contributed to the Technological Modernization of the Junda Plant." The content does not change, but the perception does. And there are many such examples of "wordplay," which undoubtedly shapes the mass perception of ongoing processes in a positive or negative light.
We believe that addressing the issues and implementing the recommended steps reflected in this article will add additional dynamics to the comprehensive socio-economic integration of the KR into the EAEU.
Marina Lapenko, Director of the IAC "Eurasia-Volga"