CC BY
10Applied Economic Researches, SA LLC, 2014
Political and economic aspects evaluation of the CIS countries relationship
Zaprudnova L.A., PhD, Associate professor Moscow State Pedagogy University, Institute of Business Administration
Abstract
The article reflects the scope of complex approach of the Commonwealth of Independent States relationship. It pays attention both to political and economic aspects of regional cooperation. Main economic characteristics of the CIS countries are compared in the article. The nature of integration process on the Post-Soviet Area is considered in the paper.
Keywords: Commonwealth of Independent States, Post-Soviet Area coopetation, regional economy; integration.
Прикладные экономические исследования, ООО «Научный консультант», 2014
Политические и экономические аспекты оценки стран СНГ Запруднова Л.А., к.э.н., доцент
Московский Городской Педагогический Университет. Институт Делового Администрирования
The Creation Agreement remained the main constituent document of the CIS until January 1993, when the CIS Charter was adopted [1]. The charter formalized the concept of membership: a member country is defined as a country that ratifies the CIS Charter. Turkmenistan has not ratified the charter and changed its CIS standing to associate member as of 26 August 2005 in order to be consistent with its UN-recognized international neutrality status. The CIS is a regional organization and it is comparable to a very loose association of states and in no way comparable to a federation, confederation or supra-national organization. As a regional organization, CIS participates in United Nations peacekeeping forces.
Major objectives of the CIS includes:
> Cooperation in political, economic, ecological, humanitarian, cultural and other spheres
> Development of equal and mutually profitable partnerships through creation of the free trade area
> Protection of human rights and basic freedoms in accordance with the established standards of international law and the OSCE papers
> Strengthening of international peace and security; implementation of effective measures for reduction of the arms race and military expenses; liquidation of nuclear and other weapons of mass destruction
> Promotion of conditions for free interaction between the CIS member states' citizens
> Providing mutual legal assistance
> Fighting against the organized crime, international terrorism and other extremist actions
> Peaceful settlement of controversies
and conflicts between the CIS member states.
Cooperation of the CIS countries with each other in the direction of integration has been uneven, both from the geographical point of view and also from the point of view of spheres of interaction. By estimations of experts Eurasian Development Bank, for the last years has sharply increased the level of integration in the sphere of labour force, migration and interaction in the markets educational services; at the same time, a decrease in the level of integration in the
sphere of trade, energy, and agriculture, as well as the divergence of the macroeconomic indicators of countries of the CIS. At the same time it is important to understand that the negative trends in some degree due to high growth rates of the post-soviet economies in which their size had been systematically increasing faster than the economic relationship [2].
Cooperation of the countries in the framework of the Commonwealth has contradictory character: at 18 August 2009 Georgia officially left the CIS; a number of Commonwealth countries are WTO members (Kyrgyzstan - 1998, Armenia - 2005, Ukraine - 2008 [3], Russia - 2013). Kyrgyzstan is a member of the EAEC, and the simultaneous participation in two international economic organizations, in the center of giving heed to which the foreign trade policy and customs issues, brings Kyrgyzstan many difficulties. Armenia and Ukraine, the successful development of foreign trade policy which is impossible without trade cooperation with Russia, have yet observer status in the EAEC and the full-fledged participation of Ukraine and Armenia in the framework of this organization is complicated by the membership of these countries in the WTO.
Table 1.Characteristic of the CIS-countries
Countries of the CIS Member-ship in the sub-
Лй Capital City State language regional organizations (in the CIS-area)
1 Armenia Yerevan Armenian CSTO
Azerbaijan Baku Azerbaijani GUAM
Belarus Minsk Belarusian, Russian EAEC, CU, CSTO
4 Kazakhstan Astana Kazakh, (Russian is an official language) EAEC, CU, CSTO
5 Kyrgyzstan Bishkek Kyrgyz, (Russian is an official language) EAEC, CSTO
6 Moldova Kishinev Moldavian GUAM
7 Russian Federation Moscow Russian EAEC, CU, CSTO
8 Tajikistan Dushanbe Tajik EAEC, CSTO
9 Ukraine Kiev Ukrainian GUAM
1 0 Uzbekistan Tashkent Uzbek CSTO
1 1 Turkmenistan Ashkhabad/ Ashghabat Turkmen ian -
Compiler: author
~ STO - The Collective Security Treaty Organization CU - Custom Union
EAEC - Eurasian Economic Community
GUAM - Organization for Democracy and Economic Development
Some of the members of the CIS have established the Eurasian Economic Community with the aim of creating a full-fledged common market. The Russian language received official status in all of the CIS member states. So far Russian is an official Jiguage in four of these states: Russia, Belarus, Kazakhstan, and Kyrgyzstan
Table 2.Economical characteristics of the CIS-countries
№ Country Population (2009) GDP 2013 (billion, USD)1 As percentage of the previous year (2013)2
1 Armenia 3 210 000 9 910 102,6
2 Azerbaijan 8 997 400 67 198 105,8
3 Belarus 9 467 700 63 267 100,9
4 Kazakhstan 16 473 000 201 680 106,0
5 S Kyrgyzstan 5 500 000 6 473 110,5
6 l"l Moldova 3 563 700 7 254 108,0
7 8W Russia 142 914 136 2 014 775 101,3
8 ___ Tajikistan 7 349 145 6 987 107,4
9 Ukraine 45 778 500 176 309 2970,8
10 'ZZZ Uzbekistan 28 095 000 51 113 108,0
11 9 Turkmenistan 4 754 800 33 679 100,0
Grand total 323 182 681 102,0
Compiler: author
По данным Всемирного банка, http://www.worldbank.org/
GROSS DOMESTIC PRODUCT (constant prices), http://www.cisstat.com/ena/frame_macro.htm
Table 3.Political characteristic of the CIS-countries
Countries
of the CIS National currency Flag
1 Armenia presidential republic unitary republic Dram
(AMD)
2 Azerbaijan presidential republic unitary republic Manat
(AZN)
3 Belarus presidential republic unitary republic Belarusian ruble (BYR) m
4 Kazakhstan presidential republic unitary republic Tenge (KZT)
5 Kyrgyzstan parliamentary republic unitary republic Som (KGS)
6 Moldova parliamentary republic unitary republic Moldovan leu (MDL)
7 Russia semi-presidential federal republic Ruble
republic (RUB)
8 Tajikistan presidential republic unitary republic Somoni
(TJS)
о Ukraine semi-presidential republic
unitary republic Hryvnia (UAH)
10 Uzbekistan presidential republic unitary republic Uzbekistan som
(UZS)
11 Turkmenistan semi-presidential republic unitary republic Turkmen manat (TMT)
Compiler: author Source: Eurasian Development Bank "EDB System of Indicators of Eurasian Integration"
http://vv~wvv.eabr.ore/eng/puhlications/Proieets/
A research on the integration of the CIS countries organized by experts of the Eurasian Development Bank, which embraced the period from 2002 to 2008 years. The main conclusions of the research are that a generalized index of integration to
the CIS region as a whole indicates a lower level of integration; at the same time, the Eurasian Economic Community (and especially the core of the three largest states - Russia, Belarus and Kazakhstan) has become more integrated [4].
Table 4.General indices of the CIS countries
№ Countries of the CIS Political Instability Index, 2009 IEF (Index of economic freedom) 2011 HDI (human development Index) 2010 Global IT Industry Competitivene ss Index. 2009
1 ■■ Armenia 5,8 69,7+ 0,695+ -
2 Azerbaijan 5,2 59,7+ 0,713+ 21,3
3 Belarus 4,8 47,9- 0,732+ -
4 Kazakhstan 4,8 62,1+ 0,714+ 26,4
5 Kyrgyz Republic 7,1 61,1- 0,598+ -
6 ■•1 Moldova 7,5 55,7+ 0,623+ -
7 Russia 6,5 50,5+ 0,719+ 36,8
8 Tajikistan 7,1 53,5+ 0,580+ -
9 ** Ukraine 7,6 45,8- 0,710+ 31,4
10 Uzbekistan 6,3 45,8- 0,617+
11 ■ 6,2 43,6+ 0,669+
Turkmenistan
Compiler: author
In the sphere of the integration of the markets is distinctly traced the existence of spatial clusters of integration in the CIS region. In particular, in the sphere of energy, agriculture and education the level of integration in Central Asia is higher than in the CIS space as a whole, although this rate is reduced over time. In the sphere of trade and migration of the most intense relationships are formed between the neighboring countries, for example, between CU-countries and also between Russia and Ukraine. At the same time, it can be stated that Russia is not the only "the integration center" on the territory of the CIS. For example, in the sphere of migration an important role
for some of the CIS-countries plays Kazakhstan [5].
Russia, being the economic core in the CIS space and the main trading partner for the vast majority of the CIS-countries, according to the experts of the EDB is characterized by minimal integration with the region of the Commonwealth. The main reasons here can be called the primary focus of Russia on the external markets and, above all, the markets of the EU
countries that also due to the structure of the exports of the Russian Federation, as well as the size of the national Russian economy, in which the share of trade cooperation with the CIS countries is insignificant. The main trading partners of Russia in the regional level are: the EU - 52,7%; APEC - 20,4%; CIS - 14,7%, while the share of the EAEC countries is 8,2% .
At the same time the structure of the Russian export to far-abroad countries is less favorable, in comparison with the structure of export to the CIS countries: the lower the share of machines, equipment, means of transport and a higher share of fuel and energy goods.
On the other hand, the CIS-countries develop actively their foreign economic relations with non-CIS countries: Iran-Armenia, Turkey-Azerbaijan, China-Tajikistan, China-Kazakhstan. In connection with the aforementioned, it can be concluded that Russia has to care its geopolitical and economic position in the CIS region. It is obvious that Russia itself is interested in widening and deepening mutual cooperation with CIS-countries. It complains by the following facts: 1. Russia and Ukraine: 70% of
components for the Military-industrial complex of Russia come from Ukraine. Through the territory of Ukraine, Russia carries out transit of its energy resources to the EU countries; according to experts' estimates, EDB, dyad Ukraine-Russia is the leader of integration in such sphere like trade. The second place takes a couple of Russia-Belarus [8].
2. Russia-Kazakhstan: metallurgy, oil and gas industries of these countries are competitors on the one hand, but the same positions are the good basis for cooperation of two countries, development of mutual cooperation in these areas. Of particular importance for Russia has also a space cooperation with Kazakhstan.
3. Russia-Ukraine-Kazakhstan: a promising position of these countries on the world market of wheat. So, by 2019 it is planned to occupy the first place in the world market of wheat, leaving
The CIS-countries are the countries, some of which are in the process of formation of statehood are characterized by political and economic instability, high unemployment and weak integration into the world economy; high exposure to the bilateral relations of the CIS-countries with each other the political environment, inter-ethnic wars and territorial disputes have a negative influence on the socio-economic situation in the countries.
The process of integration into the world economic system for the majority of the CIS-countries closely bound up with the development of foreign-trade relations with the EU states. It is obvious that the integration in such conditions in the framework of the Commonwealth undergoes a lot of barriers. There was a weak economic base and political will for integration in the framework of the CIS. Of particular importance is also the question of organization: the development and deepening of integration also involves the creation of supranational
Name Business Freedom Trade Freedom Fiscal Freedom Governmf.n Monetary Investment Financial t Spending Freedom Freedom Freedom Propert Freedom y from Rights Corruption
Armenia 82.4 85.5 89.2 85.7 76.0 75.0 70.0 30.0 27.0
Azerbaijan 72.9 77.1 83.9 71.0 72.6 55.0 40.0 20.0 23.0
Belarus 70.6 80.3 83.6 26.2 62.2 20.0 10.0 20.0 24.0
Kazakhstan 74.3 80.9 87.3 78.5 69.9 30.0 50.0 35.0 27.0
Kvravz Republic 75.4 63.2 92.6 74.2 68.6 55.0 50.0 25.0 19.0
Moldova 69.5 80.2 85.6 48.1 77.0 35.0 50.0 40.0 33.0
Russia 50.7 68.2 82.7 65.1 63.1 25.0 40.0 25.0 22.0
Tajikistan 60.7 82.5 88.6 77.3 64.5 20.0 40.0 25.0 20.0
Turkmcnistn n 30.0 79.2 93.6 95.5 69.6 0.0 10.0 10.0 18.0
Ukraine 47.1 85.2 77.3 32.9 63.2 20.0 30.0 30.0 22.0
Uzbekistan 66.8 66.2 90.5 71.0 61.7 0.0 10.0 15.0 17.0
Index year 2011.
Source: 2011 Index of Economic Freedom World Rankings. The Heritage Foundation & The Wall Street Journal. http://www.heritage.org/Index/Ranking
behind current leaders - the USA (United States decided to go on growing maize).
Nevertheless, it would be concluded that the development of economic relations of countries in the framework of the CIS is not so dynamically and effectively, as would be expected. Many political statements of the official representatives of the countries at the annual summits of the CIS remain so, with no real support from the governments in their implementation. 16
institutions, were initiated against what are Azerbaijan, Turkmenistan and Uzbekistan. The organization has several goals, including coordination of members' foreign and security policies, development of a common economic space, fostering human rights and inter-ethnic concord, maintenance of the military assets of the former USSR, creation of shared transportation and communications networks, environmental security, regulation of migration policy, and efforts to combat organized crime (Although the
C - few supranational powers, it is more than a purely »-rxvlic organization, possessing coordinating
powers in the realm of trade, finance, lawmaking mx. security. It has also promoted cooperation on
democratization and cross-border crime rrr anion.).
The earliest agreements of the CIS, which
- ied for recognition of borders, protection of ethnic
- - nties, maintenance of a unified military command, - >mic cooperation and periodic meetings of state
-s. arguably helped to maintain some semblance of arj£T in the region, although one should note that the region suffer some serious conflicts (e.g., war between .nia and Azerbaijan and civil conflicts in Tajikistan, V ¿ova and Georgia).
One of the purposes of the CIS was to promote
- .¿ration among the newly independent states. On this v. re. the CIS had not succeeded. The main reason is that »- k all parties had a common interest in peacefully _ — .intling the old order, there has been no consensus
ng these states as to what (if anything) should replace nc Soviet state. Moreover, the need to develop national -■ tical and economic systems took precedence in many dampening enthusiasm for any project of -tegration. CIS members have also been free to sign or
- : Mgn agreements as they see fit, creating a hodgepodge : treaties and obligations among CIS states.
Today the Commonwealth of Independent States executed through its coordinating institutions (charter -i oies, executive bodies and the bodies of branch . • peration of the CIS).
Charter Bodies of the CIS:
• Council of the Heads of States
• Counci 1 of the Heads of Governments
• Council of Foreign Ministers
• Council of Defense Ministers
• Council of Commanders-in-Chief of Frontier Troops
• Inter-Parliamentary Assembly
• Economic Court Executive Bodies of the CIS:
• Economic Council
• Council of Permanent Plenipotentiary Representatives of the States-Participants of the
rnmonwealth under Charter and Other Bodies of the C Mnmonwealth
• Executive Committee bodies of Branch Cooperation \nti -Terrorist Center
• Interstate Bank
• Interstate Statistical Committee
• Interstate Council on Standardization Metrology nd Certification
• Interstate Council on Emergency Situation of Natural and Anthropogenic Character
• Interstate Council on Antimonopoly
Policy
• Coordinating council of the states-participants of the CIS on Informatization under the Regional Commonwealth in the Field of Communications
• Electric Energy Council
• Interstate Council on Aviation and Air Space Use
• Council of the Heads of Statistical Services of the States-Participants of the Commonwealth
• Council of the Heads of Customs Services of the States-Participants of the Commonwealth
• and other
One of the clearest failures of the CIS has been on the economic front. Mineral and raw materials potentialities of CIS countries include practically all kinds of minerals. Mining, use (processing) and exports of mineral resources is one of the main kinds of economic activities for many states of the Commonwealth. As a whole CIS-countries take one of the first places in the world by volume of explored resources of gas, petroleum, coal, iron and manganese ores, many non-ferrous metals, potassium salts and other important kinds of minerals.
The main place by mineral energy resources belongs to the Russian Federation. Its share in CIS makes up the greatest part of resources of coal, petroleum, natural gas, peat and also practically all resources of oil-shales. Kazakhstan and Ukraine have considerable reserves of coal, Azerbaijan, Kazakhstan and Turkmenistan - petroleum, Turkmenistan and Uzbekistan - natural gas. Not great reserves of petroleum are explored also in Belarus, Kyrgyzstan and Tajikistan. In Kazakhstan there are practically all chrome ores, in Ukraine and Kazakhstan -manganese ore; in Russia the reserv es of these minerals are rather small. More than a half of iron ore resources are located on the territory of Russia. Russia and Kazakhstan have the greatest resources of non-ferrous metal ores. In these states concentrated are almost all reserves of bauxites, lead, zinc, tin, tungsten, nickel, as well as the greatest part of copper and molybdenum resources. Armenia and Uzbekistan have also considerable resources of copper and molybdenum. The share of Russia makes up more than a quarter of total reserves of phosphorites of the CIS and more than a half of reserves of potassium salts being the main kinds of mineral and agrochemical raw materials. Great resources of phosphorites are available also in Kazakhstan, potassium salts - in Belarus, Turkmenistan, and Ukraine [7].
Despite its rich natural resources, these countries do not produce high-tech, and are forced to buy them abroad. Trade with cheap raw materials and the purchase of expensive technologies have a negative impact on the
balance of payments. On the other hand, the EU countries show a good standard of living and responsible social policy, drawing attention to themselves and earning the respect of developing countries of the CIS. All this directs CIS to close and active economic cooperation with the EU, leaving
References:
1. The Charter of the Commonwealth of Independent States.
2. Source: Eurasian Development Bank "EDB System of Indicators of Eurasian Integration"
3. Georgia joined WTO in year 2000
4. Eurasian Development Bank "EDB System of Indicators of Eurasian Integration" http: // www. eabr. org/ eng/pub I i cat i ons/Proj ects/
5. http:/7w\vw.vinokurov.info/assets/illes/SIEI%20rus.pdf
6. http://www.eabr.org/rus/publications/Journal/ Regional integration: results. Eurasian Development Bank, 2008
7. h ttp ://ww\v. e vrazes. com/about/h istory
out the development of integration processes within the CIS. Therefore, the integration processes within the CIS is not so much due to the economic arguments, as the political will of some countries.
