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4ЭКОНОМИЧЕСКИЕ НАУКИ (ECONOMIC SCIENCE)
УДК 1
Rakhmetov A.
Narxoz University (Kazakhstan)
KAZAKHSTAN'S MEMBERSHIP IN EAEU AND PROSPECTS IN THE GLOBAL ECONOMY
Abstract: in this paper was research Kazakhstan's membership in EAEU and prospects in the global economy.
Key words: EAEU, economix, economy.
What determines the well-being and development of each country and its inhabitants? For sure, it is the financial condition of the country and the financial well-being of their inhabitants. For this, it is accordingly necessary to calculate GDP, real GDP, nominal GDP and GDP per capita (Moldakanov, 2019). Also, it is worth considering the factors of its change like inflation. Kazakhstan's GDP at the moment is about $ 170.5 billion, while Russia, who is the main economic partner and neighbor, has $ 1,630.6 billion. Looking at these indicators, it will be obvious that financial condition in Russia has great prospects than in Kazakhstan. Are people in Russia richer on average than people in Kazakhstan? Everything is very simple: we just need to divide the GDP of these two countries by the corresponding number of people living in these countries. This will give us information about how much on average one person produces in both countries.
We know that the country's GDP is considered the production method and the income
method, which means production equals to income, which means we will also know the
average income of one person in both countries. Economists call this as a measure of GDP per
capita. GDP per capita shows the monetary value of the average number of goods and services
produced in the country by one person at prices of a certain period (Moldakanov,2019). So,
the volume of GDP per capita in Kazakhstan is 11.187 dollars per person, while the volume
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of GDP per capita in Russia is $ 27.147. The per capita GDP indicator and the GDP growth rate indicator just give us the opportunity to compare the situation in order to better understand what is happening in the economy of a country. The indicator of economic growth rates allows us to monitor how the economy responds to various kinds of internal and external economic situations.
The latest history of the post-Soviet space shows that the economies of all the republics of the former USSR, as well as the economy of Russia itself, are very dependent on many external factors. Due to the significant share of export revenues in the budget, we can talk about dependence on energy prices. The high degree of integration of economic relations within the former USSR leads to a strong dependence of national economies within the EAEU. An international organization called the Eurasian Economic Union (EAEU) was established on January 1, 2015, which also contains the data of Kazakhstan (Farchy,2014). The lack of large-scale and, most importantly, competitive production within countries leads to a significant dependence on Chinese products.
The attempts of the EAEU member states to increase the sovereignty of their own economies in the current situation are almost doomed to failure, since they lack the main thing - competitive domestic production. One can complain for an arbitrarily long time about the orientation in foreign economic activity to the supply of hydrocarbons, which leads to a lack of support for other types of industries, but the fact remains the same. In reality there is nothing to surprise that within the EAEU, Russia, which is able to offer a more competitive product in individual industries, is realized as leading economy. Such a shift of the center of gravity towards the Russian Federation will continue in the foreseeable future, as there are no factors (primarily within the EAEU bloc countries) that can turn the tide. (The Daily Telegraph, 2014)
One of the country's famous political scientists, Zamir Karazhanov, believes that the
opinion about the critical level of dependence of the Kazakh economy on the Russian is
exaggerated. The share of the Russian Federation in the foreign trade of our country is about
20 percent. In addition to Russia, the major trade partners of Kazakhstan are the countries of
the European Union and China. As for the trade there is a growing relationships with countries
like Iran and India . Measuring by the volume of investments in Kazakhstan, Russia is in the
second place in comparison to other countries. The share of companies from the Russian
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Federation in the sensitive sectors of our economy is also invisible, even if there is recognized a slight upward trend. Therefore, it is not worth to think the indicators as critical from the point of view of national security.
The main issue is the raw material orientation of the economy, which came back to us as soon as world energy prices plummeted. But, as we know, both Russia and a dozen countries that happily lived off oil and gas production found themselves in a similar situation. The fall in oil prices negatively affected Kazakhstan's GDP growth rate, which in 2015-2016 dropped to 1 percent. In 2018, it amounted to about 4 percent.
There is no doubt to anyone, that there is ruble pressure on our economy and the high level of Russian import in our market. Kazakhstan remains in poor condition due to the fact that in trade with Russia, it buys more goods and sells less, because of why, Kazakhstan currently has a trade deficit. Today we see the United States fighting to close the trade deficit in relations with China. Moreover, both sides took a principled position and even started talking about a "trade war." It is also worth noting how the interests of Belarus in the EAEU are defended by its president, Alexander Lukashenko. This is the way, how Kazakhstan should act in order to protect the country's interests within the framework of integration. Integration should create jobs, open new industries, make people and the country rich, and also be independent from partners. Especially when it comes to Kazakhstan, it is the second largest economy from the post-Soviet space. However, it is important that we not only import goods, but also sell our products in the Eurasian space. But for now, imports dominate exports in our market. The reason for this is not related to the EAEU, because our economy is poorly diversified. The share of finished products in Kazakhstan's exports is insignificant. After the EAEU, Kazakhstan entered the WTO as a result of very long negotiations. Management believes that this should have brought results. However, so far, in fact, we still do not feel the benefits of joining the World Trade Organization.
If we talk about the development of economic relations between Kazakhstan and Russia in the near future, then many international financial institutions, assessing the prospects of our countries, refer to weak economic growth rates and the absence of structural reforms as trends. This means that we should not expect increased dynamics in relations between our
countries. Most likely, it will be moderate one. A certain stability will become a positive trend.
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Much will depend on oil prices. It is expected that trade is to be recovered. This picture was observed in 2018, when oil prices approached $ 80 per barrel, and Kazakhstan's trade with the EAEU countries grew by 8 percent. (The Washington Post, 2014)
The main indicator of economic stability in our country is considered to be the national currency exchange rate, the formation of which depends on the same factors as fluctuations in world commodity prices and investor interest in risky assets of developing countries. The national currency of Kazakhstan, the tenge also depends on the dynamics of the US dollar: about 75 percent of all imports are carried out in this currency, which means that the more confident the US dollar is strengthened, the more pronounced inflation will become, which has become one of the main problems of the Kazakhstan economy, as it directly depends to reduce Kazakhstan's GDP.
References
Moldakanov, D. (2019). What is GDP and how is it calculated?
Retrieved from: https://ekonomist.kz/moldokanov/chto-takoe-vvp-i-kak-ego-schutayut/ Moldakanov, D. (2019). GDP per capita and GDP growth rates.
Retrieved from: https://ekonomist.kz/moldokanov/vvp-na-dushu-naseleniya-i-tempy-prirosta/ Farchy, J. (2014, 23 December). "Eurasian unity under strain even as bloc expands". Retrieved from: Kyrgyzstan on Tuesday a signed the Treaty to join the Eurasian Economic Union, expanding the membership of Moscow-led project to five even as its unity is strained by the market turmoil gripping Russia.
The Daily Telegraph. (2011, 6 December). Kazakhstan welcomes Putin's Eurasian Union concept.
https://www.telegraph.co.uk/news/worldnews/asia/kazakhstan/8808500/Kazakhstan-welcomes-Putins-
Eurasian-Union-concept.html
The Washington Post. (2014, 29 may). Russia, Belarus, Kazakhstan sign 'epoch' Eurasian Economic Union Retrieved from: https://www.washingtonpost.com/world/europe/russia-kazakhstan-belarus-form-eurasian-economic-union/2014/05/29/de4a2c15-cb01-4c25-9bd6-7d5ac9e466fd story.html
