Kyrgyzstan’s accession into Customs Union unrealistic in near future

By Kuban Abdymen Source:Global Times Published: 2013-12-23 18:48:01

 "We will join the Customs Union (CU) only if all of Kyrgyzstan's requirements will be adopted," stated the President of Kyrgyzstan Almazbek Atambayev in his annual speech to the press last week.

According to him, no one can force or "push" the interests of Kyrgyzstan. However he also added, "We will enter into the CU under the condition that national interests will be protected."

Problems surrounding Kyrgyzstan's accession to the CU escalated after the Kyrgyz government announced that the "road map" on the accession of Kyrgyzstan to the CU, consisting of Russia, Kazakhstan and Belarus, was adopted by the Eurasian Economic Commission without the consent of the Kyrgyz side.

This caused irritation and explicit rejection in Kyrgyzstan. It was followed by the statement of the Prime Minister of Kyrgyzstan Jantoro Satybaldiyev, who asserted that membership in the CU is possible only in the case where the interests of Kyrgyzstan will be considered.

Opponents of the CU are openly calling for the withdrawal from the organization, with some creating movements to conduct a referendum on the country's membership in the Union.

Despite the "strong" economy, Kazakhstan cannot resist the influx of goods from Russia and Belarus, resulting in the increasing number of expensive goods on the market, which is causing discontent and irritation among the population.

Kazakhstan's experience suggests that the country should seriously analyze the implications of joining the CU.

"Otherwise, social unrest cannot be avoided because of the inevitable price rises for almost all commodities," states economic analyst Aylchi Sarybaev.

"Only some separate industry branches can benefit from the membership in the Union, but much of the economy will suffer if mechanisms of commodity producer protection are not introduced," said the expert.

Deputy Economy Minister of Kyrgyzstan Danil Ibraev openly stated that the Kyrgyz government firmly stands on its own conditions for joining the CU and does not accept the "road map" which does not align with national interests.

The main objective of the government of the country in this process is the elaboration of the necessary measures to protect the country's producers and consumers, as well as the task of supporting and improving the promotion and sale of Kyrgyz goods on the territory of the CU.

According to the official announcement, Kazakhstan and Russia are currently strategic partners of Kyrgyzstan.

Among the 140 countries Kyrgyzstan has trade relations with, 44 percent of the trade volume is with members of the CU.

And according to the data for 2012, 27 percent of total trade is with Russia, 14.5 percent with Kazakhstan, and 2.5 percent with Belarus.

As a member of the WTO, Kyrgyzstan receives the necessary re-export products, mainly from China and Turkey, which are also WTO members.

The existing proportions in terms of the import and export of goods allowed Kyrgyzstan to develop its economy over the last decade, enough to produce goods that are in demand among consumers, primarily in countries of the CU.

Any change in the terms of trade with these countries has a significant impact on almost every sphere of economy, on the budget, as well as on employment rates and income of the population.

Kyrgyzstan's direct position has forced Russia to react. "The position of Kyrgyzstan's Ministry of Economy deserves respect," said Andrey Belyaninov, chairman of the Russian part of the Kyrgyz-Russian intergovernmental commission, commenting on a draft of the "road map" of Kyrgyzstan's accession to the CU.

"It's still a matter of discussion, and the process, which is now running, I think, will result in a compromise. And everything will be related to mutual respect and economically profitable interests of all the members of the CU," said Belyaninov.

Given the political importance of Kyrgyzstan's accession to the Union, the softening of Russia's position regarding the conditions raised by Bishkek is being considered.

However, it is already obvious that Kyrgyzstan is not going to enter the CU in the foreseeable future.

The author is director of the Kabar National News Agency in Bishkek, capital of Kyrgyzstan.

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