— A commission on inter-state financial-industrial groups and joint ventures; — an EAU international investment bank;
— An inter-state EAU court of arbitration on economic problems, to resolve conflicts on a legal basis and to impose sanctions;
— A commission on the introduction of a clearance monetary unit (transfer ruble).
It is proposed to implement a number of measures to preserve the potential achieved in the previous decades and to enhance integration in the field of science, culture, and education:
— The setting up of common EAU research centers to carry out fundamental research in contemporary knowledge;
— The setting up of an EAU fund for the development of scientific research to unite the scientific collectives from various countries;
— The setting up of a committee on links in the field of culture, science, and education under the Council of the Heads of EAU Governments;
— Encouragement of the formation of non-governmental associations in the sphere of culture, education, and science;
— The setting up of a grants fund under the EAU Executive Committee.
It is proposed to conclude the following accords on defense within the EAU framework:
— A treaty on joint actions to strengthen the national Armed Forces of the EAU member countries and to protect EAU external borders.
The EAU will establish a unified defense space to coordinate defense activities:
— The formation of joint peace-making EAU forces to maintain stability and eliminate conflicts within the member countries and between them. The sending of peace-making forces to conflict areas on EAU territory - with the agreement of EAU member states and in accordance with international legal norms;
— The tabling of joint proposals by EAU member countries at international organizations, including the United Nations Security Council, on lending EAU joint contingents the status of a peace-making force;
— The setting up of an inter-state center on problems of nuclear disarmament attended by representatives of international organizations.
— All EAU states except Russia maintain their nuclear-free status.
In the area of ecology, the following mechanisms must be formed in the nearest future, according to the EAU project:
— An ecological fund under the EAU Council of Heads of State, to realize ecological programs within the EAU framework, to be financed by all member states;
— Coordination of actions with international organizations to reduce the extent of environmental pollution;
— Endorsement of short- and long-term programs for major problems of restoration of the environment and liquidation of the consequences of ecological disasters (the Aral Sea, Chernobyl, the Semipalatinsk nuclear testing ground);
— The endorsement of an inter-state EAU agreement on storing nuclear waste.
The Eurasian Union of States is thus based on three principal provisions:
— Joint supranational coordinating organs for the management of the economy, defense, and foreign policy;
— A unified economic space;
— A common defense complex.
The supranational institutions include the highest organ of political leadership of the Union - the council of heads of state and heads of government; the highest consultative organ, the parliament; the councils of foreign and defense ministers;
And the interstate executive committee - a permanently functioning executive and controlling body whose head is appointed by the heads of government for a term which they themselves define.
As for the unified economic space, it may be built, e.g., on such a basis as coordinating economic policies and mandatory programs; a common legislative basis regulating relations between economic agents; a supranational currency on the European ECU model; coordination of direct links between enterprises; the setting up of joint and mixed industrial-financial groups, transport firms, trade houses, and exchanges. The defense and foreign trade complexes may be just as effective. The EAU as represented by its executive committee must receive the status of an authorized representative in all the leading interstate organizations of the world.
The practical realization of the provisions of the EAU project in the bilateral Kazakhstan!-Russian relations is excellent proof of the viability of this program.
On January 20, 1995, a package of extremely important integration documents was signed during the working meeting between presidents Nazarbayev and Yeltsin. This package included a declaration on expanding and deepening Kazakh-stani-Russian cooperation and an agreement on the Customs Union, which was also signed by Belorussia. Both of these were discussed in detail before. This last agreement opens the way to the establishment of a unified customs space to be followed by a unified economic space, as envisioned in the EAU project.
With the setting up of the Customs Union, the economic cooperation of the three countries is built on the principles of free, non-discriminatory trade; a common market of commodities, services, capital, and labor; and close interaction in the production, investment, and financial spheres.
At present, the first stage in the formation of the Customs Union is largely completed. The work done by the three sides is generally recognized to be an important element of the realization of the foundations of the Economic Union and the formation of the common market of CIS countries.
The legal acts on tariff and non-tariff regulation of foreign trade have been unified. Kazakhstan and Russia have signed an agreement on unified control of customs services. An agreement has also been reached on the identity of trade procedures in both countries in relation to third nations, and unified procedures have been introduced on the customs statistics on foreign trade and customs registration of commodities subject to excise. Customs controls on railroads and passenger air traffic between the two countries are lifted step by step.
A treaty has been signed between the Republic of Kazakhstan and the Russian Federation on joint efforts on the protection of outer borders, the term “outer borders” taken to mean the sectors of the border between our countries and the states that are not part of the CIS. The edict of the president of Kazakhstan dated September 19, 1995 On the Lifting of Customs Control on the Border between the Republic of Kazakhstan and the Russian Federation concludes the first stage in the formation of the Customs Union and orders the implementation of joint customs controls on the Kazakhstan and Russian sectors of the outer borders of the Customs Union.
At the second stage of the formation of Kazakhstani-Russian-Belorussian economic efforts to form a customs union, the most important areas of cooperation are a closer coordination of economic reforms; harmonization of civil and economic legislation; unification of currency, tax, and price regulation by the state with the aim of leveling out the economic and legal conditions for the activities of commodity producers within a unified customs space; working out coordinated positions of the members of the Customs Union in relations with third countries and international organizations. At the meeting of heads of CIS countries in November 1995, three more countries stated their desire to join the Customs Union: Kyrgyzstan, Uzbekistan, and Tajikistan. Later, only Kyrgyzstan went through with the necessary procedures and entered the Customs Union.
Another example of collaboration in the field of integration is the agreement on the Baikonur space vehicle-launching site, which makes it possible to use this great scientific and technological facility in the interests of Russia and Kazakhstan, as well as documents on the issues of citizenship signed by the presidents of Kazakhstan and Russian.
Let us consider in somewhat greater detail the problems of citizenship, of which the solution on a bilateral basis was also outlined in the draft project of the EAU.
Issues of citizenship became particularly prominent at the time of the emergence and building of sovereign independent states after the disintegration of the USSR, when tens of millions of former Soviet citizens overnight ended up outside their "historical homelands." This problem is as topical for Kazakhstan and Russia as for other CIS countries. More than that, it often figures as one of the most important issues of bilateral relations with Russia.
The more acute aspects of this problem were lifted as a result of the signing in January 1995 by the presidents of Russia and Kazakhstan of a treaty on the legal status of citizens of both countries living on the territory of the other state and of an agreement on simplified procedures for acquiring citizenship in moving from one country to another. Well-known specialists from the two countries worked fruitfully on these documents. Authoritative Kazakhstan! and Russian politicians and jurists believe that these are innovative agreements without parallel in the world, and they are a fairly rare example of regulating bilateral issues on a civilized basis. The importance of these agreements both for progressive development of our countries and for normal life of the citizens of Kazakhstan and Russia cannot be exaggerated.
These documents envisage the introduction of maximally simplified procedures for acquiring citizenship and for movement without visas; they also offer possibilities for contract work and military service; assert the rights of possession, use, and disposal of property; create conditions for exchange of currency and transfer of sums of money by individuals and corporate entities of Kazakhstan and Russia; and many other provisions which reliably protect the rights and interests of the citizens of the two countries.
Yet another sphere in which combining the efforts of all the interested parties is needed is the legal status of the Caspian Sea.
The position of the Republic of Kazakhstan on this issue is based on the need for an early drafting and signing of a convention on the legal status of the Caspian Sea, of which a draft was worked out by the Kazakhstan foreign ministry and sent out to all the interested states as early as March 1994. Unfortunately, there has been no response to this initiative for quite a long time now, and the agreement on regional cooperation on the Caspian Sea issue is still at a standstill.
At the same time preserving this unique object of nature is a task that the present generation must be worthy of.
The events of the recent years thus prove conclusively the need to proceed to a new level of integration, which will fully conform to the vital needs of the peoples. International experience shows that any interstate association goes through various states in its development, becoming enriched in the process with new forms of cooperation. The Eurasian Union should be seen as just one of such transitional forms capable of optimizing the solution of the problems facing the Commonwealth.
From the time of the publication of the draft EAU project, politicians and scholars have been paying close attention to it. Four major scientific and practical conferences were devoted to this subject, as were hundreds of publications in Kazakhstan, Russia, and other states. Politicians, scholars, and diplomats continue to study the EAU project with great attention.
The current period in history is characterized by a radical breakdown of the old way of life. Society now faces difficult issues, and each person is subject to serious trials It is quite natural under these conditions that the peoples of Kazakhstan, Russia, and other countries with an interest in the unification of the Commonwealth will find it easier to overcome these difficulties together. A balanced attitude toward the past, a persistent realization of the present potential, and confidence in a more certain future - only these things will be able to give the peoples of our countries a natural feeling of spiritual harmony and a sense of full-blooded life.
History is offering us a chance to enter the 21st century in a civilized manner. One of the ways to achieve that, in my view, is the realization of the integration potential for the establishment of the Eurasian Union, which will reflect the objective logic of the development of the post-Soviet space and the will of the peoples of the former Soviet Union to achieve integration.
This is how President Nazarbayev, the author of the Eurasian project, characterized the development of this idea and his current vision of its future: "I still remain an adherent of integration of post-Soviet space. As I formulated my vision of integration I laid no claims to total realization of all the provisions of the project, being fully aware of all the political connotations of that period. Two considerations were my primary motivation. First, I wanted to generalize within a single whole the most realistic proposals for further integration, which simultaneously appeared in the countries of the post-Soviet space. Second, I wished to interrupt the indecently drawn-out pause in the activities of the CIS institutions.
In the last two years there was movement in the CIS countries on some issues that had been at a standstill, including
4. VITAL PROBLEMS OF THE PRESENT-DAY STATE OF KAZAKHSTANI-RUSSIAN RELATIONS
The Present State and Prospects for Economic Cooperation between Kazakhstan and Russia.
The top priority area of Kazakhstan’s policy in foreign trade is the strengthening of economic cooperation with Russia and consistent integration of the economies of the CIS countries. This is determined by the traditionally strong economic links, a high level of mutual complementarily and interdependence of two economies of a once unified state, the size of the commodity market and identify of economic problems awaiting solution. “Analysis of the results of development of the economy of the former USSR and of experiences of economically advanced nations,” President Nazarbayev stressed, “shows that the transition to the market is objectively necessary and historically inevitable.”
The main feature of the present-day situation in Kazakhstan is the increasing impact of the mechanisms that have evolved in the years of reform and a weakening of the effect of non-market factors. In the initial stages, the underdeveloped state of such important instruments of the formation of the market as privatization, de-monopolization, absence of a competitive environment, were the main sources of inflation in the republic, a worsening state of the finances of enterprisers, an acute shortage of turnover capital, a fall in production due to falling demand and real earnings of the main mass of the population, as well as growing abuses in trade and banking structures.
The prevailing technological, economic and organizational standards made a significant impact on the potential of foreign trade relations. “The cohesion of the economic space of the former USSR was affected through centralized state planning implemented by command-administrative management. In the process, the country’s economy worked as a ‘single workshop’, and not all production and economic links here were rational from the market point of view. The transition to a market economy throughout the economic space of the former USSR required a profound restructuring, and this called for considerable resources and time,” Ex-Prime Minister A.M. Kazhegeldin stressed.
The policy of liberalization of foreign trade activity and of open economy did not result in 1993 in any growth of exports. It amounted to $1.5 billion, thus remaining at the 1992 level. Shifts in the geography of Kazakhstan export due to the re-orientation of foreign trade links to industrially developed nations resulted in the strengthening of raw materials exports. The share of machines, equipment and transport vehicles in the export dropped to 2 percent, and the share of fuel and energy complex and that of metallurgy rose to 80 percent. Rising domestic prices prevented partners from concluding long-term foreign trade deals, stimulating instead commodity exchanges. The share of barter and clearing deals in export operations made up more than 26 percent. More than 56 percent of imports were affected through exchange of commodities. Barter operations were mostly in the nature of structurally unbalanced exchanges. The republic suffer considerable losses due to inadequate knowledge of the market conditions and the desire to access foreign markets at any price.
A noticeable feature of Kazakhstan economy is the low level of the development of machine building, which is not up to present-day requirements, and this makes an adverse impact on other branches of the economy, as it results in the common shortage of metal-tooling products. This aggravates the shortage of spare parts and of products used in several adjacent branches of industry and adversely affects the standards of servicing.
Some of Kazakhstan most important tasks in 1994 were the closure of, and changing production lines at, non-viable enterprises and development of promising export-oriented ones, which also satisfy domestic demand. This called for a set of measures to identify enterprises in the state of depression, closing down unprofitable lines of production in energy-consuming industries and rehabilitation and reorganization of non-profitable production lines.