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BASIC PRECONDITIONS FOR THE DEVELOPMENT OF EURASIAN INTEGRATION IN MODERN CONDITIONS
Madina Abaidyllaeva, Akimzhan Arupov
Institute of the World Economy and International Relations, Republik of Kazakhstan
ABSTRACT
Modern foreign trade relations of Kazakhstan were formed in the context of globalization and regionalization, changed the commodity and geographical structure of foreign trade, through the development of different levels of integration. The initial factor in the development of the global level was the presence of the resource potential, which led to a change in the geography of foreign trade in the direction of expansion of cooperation with foreign countries.
Thus, a priority direction of foreign economic policy at the present stage is the implementation of the Eurasian integration project. Kazakhstan has consistently pursued the policy of integration in accordance with the concept of Eurasian integration and promotes activities to the effective functioning of the Eurasian economic union with Russia, Belarus, Armenia and Kyrgyzstan.
In Eurasia, the first half of the 90s of the twentieth century there have been major changes in the political and geographical configuration significant in terms of policy and regional economies.
The collapse of the Soviet economic system and the formation of the new post-Soviet states have reformatted the political and economic space of Eurasia. This was the main cause of spatial and political concepts of development of new regions from both the regional and non-regional powers, in particular with regard to this important sector of the international politics and economy, as the Central Asian Region (CAR).
Investigation of mechanisms of integration into the world economy over the past two decades includes the main areas of economic science. This is due to the fact that the most important feature of the present day is that the increasing interdependence of national economies, intensive transition of the civilized countries of the closed economy to an open economy, facing the outside world [1].
International practice shows that any international association through various stages in its development, supplemented by new forms of cooperation [2].
Investigation of the processes, leading to the formation of the real world economy as a universal economic integration refers to the main areas of economic science.
At the same time, the intensification of the processes of internationalization, transnationalisation and integration - the processes leading to the formation of the real world economy as a universal economic integration acts as the main (Table 1) [1].
Currently, important nature and direction of the process of integration into the world economy by the regional integration is given in developing countries. This is mainly due to the history of these states, when, after gaining independence, regional integration has become a means of complementarity of the participating economies. Considering the undeveloped or
ARTICLE INFO
Received 17 October 2015 Accepted 26 October 2015 Published 30 October 2015
KEYWORDS
Integration process, World economy, Transnationalization, International organizations, Trends of world development.
© 2015 The Authors.
unilateral developed infrastructure, two or three countries or group of countries have been able to resist the deformation the industry only through joint efforts. However, at the present stage the integration process becomes extremely important to preserve and maintain the optimal branch structures of developing countries.
Table 1
The formation of the world economy
The formation of the work Internationalization [ economy - the process of interconnection and interdependence of the various countries and organizations, leading to the emergence of international organizations in various fields (economic, political, cultural, military, etc.) [3].
Transnationalization - the movement of capital from one country with a relative excess amount to another country where it is in short supply, but there are plenty other factors of production (labor, land, minerals) that cannot be rationally used in the reproduction process due to lack of capital [3].
Integration - the integration of economic actors, the deepening of their cooperation, the development of relations between them.
Economic integration - interaction, both at the level of national economies of whole countries and between enterprises, firms, companies, corporations. Manifested in the expansion and deepening of the production technological communication, resource sharing, combining the capital, in the creation of favorable conditions for economic activity for each other, mutual removal of barriers [3].
- gradual creation of a «common market» - liberalization of the conditions of barter and movement of productive resources (capital, labor, information) between the two countries.
International economic integration - the interaction of the economies of individual countries and within the economic structure, carried out with the purpose of economic mutual benefit. It manifests itself in different forms and at different levels, the establishment of trade relations between countries; comprehensive economic cooperation between the states; full internationalization of national economies [4].
Reasons for the development of integration processes [5]:
1. Increased competition, economies of scale, the search for the best conditions for business activity; 2. The favorable political circumstances: the collapse of the colonial system; the need to establish a new world economic order; the end of the «cold war»; the consolidation of the world community as an integrated system; 3. The achievements of science and technology, the creation of a new world economic infrastructure, including international transport network, modern communication facilities and the general information system; 4. Reducing costs for the movement of goods and factors of production, reducing the degree of economic risk, the free movement of labor, technology and capital
Factors affecting the integration process [6]:
1. Globalization, the internationalization of production, increased international competition, protection of national interests; 2. Provision of the most favorable external conditions for domestic economic and social development, development of new technologies, attract foreign investment, access to foreign markets; 3. The development of political and economic relations with various countries of the world, regional integration structures; 4. Consolidation of the regional associations; 5. Strengthening the influence of regional groupings on the functioning of today's global economy; 6. The development of an integrated system of industrial policy to protect the domestic market and export promotion; 7. Strengthening of protectionist sentiment in some states.
Note - developed by authors
In addition, when assessing the state of integration in already existing regional associations and levels of economic development of member countries, it is clear that almost in all regional groupings such as the European Union (EU), the Southern Common Market
(MERCOSUR), the Association of South-East Asia (ASEAN), North American integration Association (NAFTA), economic integration led to an increase in the proportion of the block in the world GDP and wealth.
International economic integration associations are in all regions of the globe. This includes countries with very different levels of development and socio-economic systems.
A serious factor that affects the strengthening of this process is the global financial crisis, which discovered the vulnerability of the global financial system, propriety and validity of regional integration. The success of the integration process can be formed due to the presence of preconditions that are necessary for this purpose [7].
The present stage of transformation of the world economic system is characterized by two oppositely directed tendencies [8, P.124]:
1. The first tendency is the end of the implementation of unipolar globalization model, subordinate to US interests, in which the leading role played by TNC and TNB, the headquarters of which are located in developed countries. In this model, strong and successful countries are not needed, preference is given to small and weak states, which is easy to impose the interests of the international monopolies. Hence, we see that one of the trends of world development is the fragmentation of the sovereign countries according to ethnic, religious and other factors [8, P.125]. This tendency has played and is continuing to play a dominant role in the world economic system in the last 40 - 50 years.
2. The second tendency is the regionalization of the world economy, creating self-sufficient regional blocs, which are seen as major actors of the international community, capable of resisting the international monopolies and the United States. Currently, more than 20 international integration type organizations which produce over 60% of global GDP and accounting for more than 80% of international trade was formed in the world [9].
This tendency is a natural reaction to counter a single-pole model of the world community, the desire to preserve the national sovereignty of each state, which will provide the diversity of distinctive national cultures [8, P.129].
The victory of this tendency could lead to a significant change in the very structure of the international community. Most likely, each regional bloc will introduce its interregional currency, which will change the architecture of international finance, bridge the gap between the real and financial sectors of the economy [8, P.129].
Under the new model, the reform of international organizations - the IMF and the World Bank, the UN and the WTO are likely to occur. The decisive role in them already will not belong to individual states, but to regional blocs.
Regional integration in the post-Soviet space fits into this tendency of the international community, moreover, is seen by us as one of the main signs of the coming victory over the tendency of regionalization the model of unipolar globalized world. It is not surprising that the deepening of post-Soviet integration, which may lead to the appearance of a new actor in the world economic system, which has not only the potential to confront the major actors of the current model of globalization, but also the real preconditions for this, which can be easily implemented in the shortest time, triggered a sharp rejection by individual international organizations.
As a rule, the model of European integration, which, at first glance, has proved itself the most successful, is chosen as a model for the integration of post-Soviet republics. Underlying weaknesses of the European model of integration had been opened by the current global economic crisis.
Combining countries with different historical background, different national traditions and culture, a different level of socio-economic development has shown its fragility in a crisis situation. The rapid expansion of the EU, the inclusion of post-communist countries of Eastern Europe in its membership, not in terms of economic viability, but in terms of political purposes, turned this regional alliance into a «show of states», each of which plays its part. In
this regard, from the point of view of many economists, under the weight of almost intractable social and economic problems that were exposed in each country, the possibility of the collapse of the EU is unavoidable. A solution to these problems rests with the leading countries - Germany and France [8, P.131-132].
Therefore, an attempt to direct borrowing model of European integration on postSoviet space will be doomed to failure, since no model can be mechanically moved to another region with fundamentally different socio-cultural, economic and other peculiarities and traditions. In the post-Soviet space, in terms of economics, there are all prerequisites for the implementation of the amalgam model of integration, more effective than the pluralist model of European integration.
Under the first model we have in mind «a merger in an appropriate form of two or more previously independent units into a larger union, endowed with a certain type of general management». Under the second - it will integrating units maintain its political independence [10].
The whole world experience suggests that the real economic integration is possible and can be effective only between countries with well-developed economic potential. In the CIS, such countries can be attributed only to Russia, Ukraine, Belarus and, of course, Kazakhstan. No coincidence that the three states of the Commonwealth initiated the establishment of the Customs Union.
The question of the appropriate principles and mechanisms of formation of integration group in the post-Soviet space is the subject of scientific and political discussion in the last two decades - since the collapse of the Soviet Union and the appearance of the Commonwealth of Independent States. During these 20 years many attempts were made to create more or less profound forms of integration cooperation in the region, and intermediate (short-term) aim of almost all integration initiatives advocated the formation of the customs union and/or general (common) economic area.
Currently Eurasia is experiencing a period of transformation, associated with the search for a new model of the world economy, more adapted to the changing conditions of globalization.
Eurasian continent becomes the center of the formation of the key trends of world development:
- the formation of a polycentric model of international relations;
- reformatting Eurasian Economic Space;
- establishment of the Eurasian Economic Union in the post-Soviet space.
From the viewpoint of the above factors southwest developed world is seen as a source of global economic imbalances, while the developing countries (in particular China, India and Russia) as the «locomotives» of the world economy. This is confirmed by the fact that:
- Firstly, the growing dynamics and the developing countries' share of world GDP;
- Second, increasing share of developing countries in world trade, while the share of developed countries reduced;
- Third, in developing countries, in addition to the natural and infrastructure resources, which are the main objects of global competition, the main human resources (the main factor in the development of any economic system) are concentrated here. Currently, more than 80% of the world population lives in developing countries. The share of developing countries in world population is increasing, while the share of developed countries decreased.
Thus, the transition to a new polycentric model of international relations suggests the emergence of a new tendency - the growing influence of developing countries in the global economy and competition with developed countries in the field of global management, as well as the appearance of new global challenges for developing economies (Table 2).
Table 2
Global tendencies
Key tendency The formation of a polycentric model of international relations
New tendencies 1. The division of the world economic space on «western» influence global regions (Euro-Atlantic) and on «eastern», the significance of which for the global economic system is increasing rapidly (East, South Asia, the CIS region); 2. The growing importance of regional alliances of developing countries and use of the principle of «collective leadership» in addressing key of global challenges by them.
1. The competition between the West and the East for the formation of the model of global development and global management philosophy. - Threat to the economies of developing countries with favorable geo-economic position and natural resources; - Threat to regional and interregional integration relations between towering economies.
Factors of instability 2. The imbalance of economic and non-economic impact of the potential between the developed and developing economies. - Saving control functions over the basic institutions of the global management (IMF, WB, WTO, largely UN) for a the Euro-Atlantic area; - The high interest in the economies of developing countries (the energy sector, foreign trade); - Saving between the level of investment and the level of their savings, shares of world GDP and the share of global government debt in developed countries; - The superiority of global impact of the military potential over the economical. Today, the United States spends more on defense than China, Russia, Japan, India and the rest of NATO combined.
3. Changing the composition of the leading "players" while maintaining the criteria of global influence: GDP, technological capabilities, defense spending, population. - Intensification of the contradictions between the interests of the social economy and the interests of multinational corporations.
4. Intensification of the struggle of ideologies in the spread of the state ideology of the developing world as a new criterion for global influence. - The struggle of ideologies - Western (market model and the limited participation of the government in the economy) and the social model (China, Russia).
Note - developed by the authors based on [11, P .24-25]
The transformation of Eurasia, related to concentration of centers of the new world order and new challenges for economic security on the continent, is a defining trend of the continental economic system (Table 3).
Despite the fact that the current post-Soviet economic system develops in the framework of the existing integration project: Customs Union - the Common Economic Space - the Eurasian Economic Union, Central Asia (CA) remains the region in respect of which a concept that would meet the common interests of the parties' cooperation and the integration of regional development has not been formulated. That is, for external perception, Central Asia remains a region that is free for geo-strategic and spatial-planning policy.
Creation of the Eurasian economic space - this is the main objective of the Strategy of integration of the CIS. The modern trend of regionalization of the former Soviet Union is the creation of a «model of Eurasian integration» by accelerating the integration process (Table 4).
By «the model of Eurasian integration» refers to the processes of integration between Belarus, Kazakhstan and Russia in the format of the CU - CES - EAEU with consecutive connection to them EAEC countries.
Table 3
Continental tendency
Key tendency The transformation of the Eurasian Economic Space
VÏ ie 1. Formation of a new model of international economic development in Eurasia. - New poles of economic growth in China and India, Russia; - Europe, North East, South and Central Asia, the Middle East direct impact on world economy and politics; - Centers of world production, world trade and investment flows; - The quality of human resources.
* "g <D 2. The dominance of the regional problems over the national problems and strengthening the role of regional unions G20, BRICS, SCO.
3. The increasing role of the resource and raw material potential and the importance of the regions with the global resources.
4. The growing influence of human resources and the demographic factor in the change in the quality and structure of the global labor market and consumption.
1. The growing scarcity of natural resources. It increases the value of the major exporters, such as Iran and Russia.
tyi 5 VÏ .0 <+H O 2. The growth of social and demographic imbalances caused by the asymmetry of regional economic systems. - Increasing the number of the world's middle class by the dominant population in developing countries will affect the global balance of resource development, the structure of world production and consumption.
VÏ Î-H O ä Ph 3. Competition for «social consciousness» and the new fundamental values. - from «democracy» to «personal security»; - from the growth of «consumer» to the growth of «social guarantees».
4. Intensification of the struggle of ideologies in the spread of the state ideology of the developing world as a new criterion for global influence.
Note - developed by the authors based on [11, P. 26-29]
Table 4
Regional tendency
Key tendency New tendencies Factors of instability
Creation of the Eurasian Economic Space 1. Accelerating the integration process under the influence of external (the transformation of the global economy and the economies of Eurasia) and internal (CIS transformation) factors. 1. A hasty transition to the next stage of economic integration in terms of asymmetry potential of the Eurasian Economic Community. 2. Fragmentation of the EAEC economic space as a consequence of asynchronous integration within the community.
Note - [11, P.30]
New aspects of the emerging international economic development model depends on the growth of the economic importance of developing countries, «the ideology of the developing world» and the principle of «collective leadership» in addressing key global challenges.
The participation of Kazakhstan in the integration entities ceased to be something phenomenal in the perception of the population, going smoothly in the category of important foreign policy priorities of the country.
Globalization has intensified the Eurasian integration processes, both in economy and politics. These processes are almost simultaneously and interconnected with each other.
The offset of the Center for Global Development in Eurasia determines the strategy for the integration of the EAEC. Kazakhstan is in the area of global interest as a region geographically close to the promising global markets (China, India and Russia). Belarus is a member of the EU program «Eastern Partnership» and a member of the Union State of Russia and Belarus. Russia is also the subject of global management, being the part of the G20 and BRICS.
The processes of regional integration in the former Soviet Union carried out under the most appropriate for all countries in the region multilevel model, a phased, multi-speed integration. Stages can clearly be seen in the transition from free trade areas to customs and economic union.
However, positive trends in the development of integration cooperation in the region have a range of unsolved problems:
- the absence of a mechanism for implementing the taken decisions, in the countries of Central Asia in many areas there is a mismatch positions of member states;
- the level of implementation of the decisions remains low, and the documents themselves are generic, advisory in nature;
- absence of a single transport and communication system in the region;
- raw orientation of the economies of Central Asia, needed a breakthrough towards the modernization of the economies; ecological imbalance, seismicity, mudflow in the region;
- the absence of a Central Asian identity among peoples;
- the threat of terrorism, extremism, transnational organized crime, and other challenges of our time [12].
The practical realization of the Eurasian idea began with the establishment of the Customs Union of Russia, Belarus and Kazakhstan on 1 January, 2010 and then the Common Economic Space on 1 January, 2012 and the Eurasian Economic Union on 1 January, 2015.
This is a huge market with a combined GDP of $ 2 trillion. US dollars, which unites 170 million consumers, that according to the President of Kazakhstan, should «teach our business to compete». At the same time it is emphasized that «in the economic integration process, Kazakhstan will not lose any part of their political sovereignty» [13].
Geography of Kazakhstan's foreign trade is shifting towards Asia, especially China. During the period 1995-2012 Kazakhstan's share in exports of European countries rose from 21% to 58,3%, Asian countries from 8,5% to 24,1%, while the CIS countries fell by more than 5 times.
However, the CIS countries play an important role in providing the republic imported goods. In 2012, the CIS countries accounted for 47,6% of total imports to the republic, to the EU 20,1%, Asia - 24,7%. The Russian Federation is currently the main supplier of imported goods to the Kazakh market.
At the present stage of economic development of Kazakhstan the most predictable and which correspond to the strategic economic interests of countries are regional integration processes. The relevance of regional integration interaction increases for several reasons:
First, the global economic system is still in a state of post-crisis instability, aggravated by systemic shortcomings of the financial system;
Secondly, without activating the process of regional integration cannot change the nature of international specialization and rebuild the republic's integration model into the global space, since the implementation of the strategy of industrial-innovative development is contrary to the interests of global partners who are interested exclusively in the commodity exporting countries;
Third, at the present stage of the regional integration processes related to the development of the Eurasian Economic Space and for the most part initiated by Kazakhstan, supported and implemented in the form of existing regional integration groupings.
The development of Eurasian integration is aimed at preserving the post-Soviet economic space, ensuring the dynamics of foreign trade relations, expanding the structure of commodity exchange. Despite the decline in the share of CIS countries in the amount of turnover, Kazakhstan has managed to maintain the momentum of development of trade relations in the former Soviet Union after 2000s.
Modern foreign trade relations of Kazakhstan were formed in the context of globalization and regionalization, changed the commodity and geographical structure of foreign trade, through the development of different levels of integration. The initial factor in the development of the global level was the presence of the resource potential, which led to a change in the geography of foreign trade in the direction of expansion of cooperation with foreign countries.
Thus, a priority direction of foreign economic policy at the present stage is the implementation of the Eurasian integration project. Kazakhstan has consistently pursued the policy of integration in accordance with the concept of Eurasian integration and promotes activities to the effective functioning of the Eurasian economic union with Russia, Belarus, Armenia and Kyrgyzstan.
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