EAEU COUNTRIES APT TO ADDRESS CHALLENGES AND WORK TOGETHER

– Mr. Volvach, despite its relatively short history, the Eurasian Economic Union gained extensive experience in developing economic measures in its member states in the context of modern challenges, and proved to be apt to work out effective decisions. What results has the Union achieved during these ten years?

– This year marks the 10th Anniversary of the Eurasian Economic Union. Since its establishment, the EAEU has become one of the most deeply integrated unions, it has emerged as a successful mechanism for the socio-economic development of all its countries.

The EAEU continues to develop dynamically, gaining high rates of industrial and agricultural production, forging an open dialogue with foreign partners, thus creating new opportunities for cooperation and new points of growth.

Since its very establishment, the EAEU has proved its capacity to adapt to the constantly evolving economic and geopolitical landscape, while maintaining a strong and steady foot-hold as a key integration “driver” in the Eurasian region. It was able to secure such an international standing through its supranational system of institutions, which ensures sustainable growth for all member states.

This gives an additional boost to GDP growth in times of stability, and mitigates the negative impact during crises. Over its history, the EAEU real GDP growth stood at 12.5%, industrial production grew by 23.3%, and agriculture by 29.8%.

By the end of 2023, its GDP increased by 3.8%, outpacing global growth rates. In January–September 2024, the Union’s GDP growth reached 4.1%, with Armenia accounting for 8.7%, Belarus for 4.5%, Kazakhstan for 4%, Kyrgyzstan for 8.4% and Russia for 4%.

The unemployment rate dropped from 5.7% to a record 3.5%. For reference, the global figure was almost 5%. In late September 2024, unemployment in the EAEU as a whole de-creased by 14.9% year-on-year. By the end of 2023, the value of the EAEU’s mutual trade was $90.4 billion, that is nearly doubled in dol-lar equivalent compared to 2015.

Preliminary data provided by nation-al statistical services for January– September 2024 suggests that the Union’s mutual trade increased by 12.3% year-on-year in value terms to $71.7 billion. Nowadays, the Union enjoys freedom of movement of goods, services, capital and labour, and its countries are fully self-sufficient in gas, oil, petroleum products, and electricity.

In addition, the Union’s countries managed to achieve a high level of self-sufficiency in basic foods, with indicators close to 100%. The EAEU now fully satisfies its domestic needs in meat and meat products, sugar, meanwhile grain and vegetable oils exceed these needs by more than 1.5 and 2 times. All these figures suggest that the Union put in place an efficient production system and minimised its dependence on external supplies. In a volatile geopolitical context, compromises and common interests are of particular importance. Not only does this strengthen economic ties, but also contributes to social stability, creating comfortable living conditions for the peoples of the Union. Adapting to new challenges, including the changes in the global economy, calls for flexibility and readiness to cooperate. Achievements in this field show that the EAEU countries are well placed to address challenges and work together to find the best solutions for the common good.

– What key strategic areas of the EAEU’s future activity could you sin-gle out, bearing in mind the Eurasian Economic Path Declaration signed in December 2023 and the increasingly complex geopolitical situation? And how do you see the future of the EAEU as a whole?

– The 2023 Declaration, signed by the Heads of the EAEU countries, outlines the strategic agenda and a common vision on the integration of the Union. A number of agreements included in the Declaration are well in line with the current strategic cycle, with-in which we are developing our cooperation under the Strategic Directions for the Development of Eurasian Economic Integration until 2025. Many provisions of the Declaration imply the expansion of areas of cooperation, for instance, climate agenda, ecommerce, and AI.

The Declaration outlines six key directions: providing the common market with key goods and resources, forming a common space of cooperative interaction and cooperation in the field of technological development, building a common transport and logistics space, shaping a common financial market, developing economic cooperation in the fields with integration potential, and the EAEU functioning as a pole of economic attraction in the international arena.

The Eurasian Economic Commission together with the EAEU countries are now engaged in large-scale activities to elaborate a list of concrete measures to implement the Declaration. We believe that it is essential that these measures serve as an effective mechanism for the development of the EAEU. The Declaration is not just an “image” document, but a real management tool to establish an independent economic policy of the five member states. The document will encourage the elaboration of a coordinated policy on integration measures, and in the long run will ensure not only a new quality of the common union markets, but also significantly improve the living standards in the countries.

– In one of your speeches, you not-ed, in particular, the following areas of prospective integration building — ensuring technological sovereignty, developing entrepreneurship and co-operation, and improving the investment climate in the EAEU. What work is being done on these tracks?

– Much has already been done to secure technological sovereignty, devel-op entrepreneurship and cooperation, and improve the investment climate in the Union. Additional mechanisms aimed at attracting investment to encourage domestic production and to release jointly produced goods to foreign markets have been developed. All this allows the EAEU countries not only to improve the investment climate, but also to create new jobs, develop technologies and increase competitiveness in international markets. Joint investment and cooperation projects will enable the countries to make full use of their resources and production potential. In 2023, it was decided to initiate a supranational mechanism for financing industrial cooperation projects from the EAEU budget.

The mechanism is to start its work in the near future. The initial annual funding willa-mount to about 1.8 billion roubles to subsidise the interest rate on loans-for commercial financial organisations to implement cooperation projectsin key industries. With that said, the financing is organised in such a way that projects involving enterprises representing the largest number of EAEU countries are given priority. Setting an “entry threshold” of three enterprises from three different countries creates an additional incentive to support multilateral cooperation involving “small” economies.

It is my understanding that the first project to qualify for a beneficial subsidy is already in place. Another key mechanism for securing the independence of the Union’s financial infrastructure is the mutual development and recognition of ratings. Russia proposed to establish an institutional framework in this field. In October 2023, the countries decided to develop a vision to create the Eurasian Rating Agency.

– The EAEU, among others, seeks to broaden its influence in the international arena, especially since the steadily growing interest in integration groupings, including the EAEU, is a global trend today. In this regard, how is the EAEU’s dialogue with third countries and organisations currently being shaped? What common ground do they have with the Union, and what areas of cooperation are the most relevant in the current geopolitical and economic landscape?

– The EAEU is open for dialogue and cooperation with all friendly countries across the world, so its geography of interests extends not only to Eurasia, but also to Latin America and Africa. At that, a common Eurasian space remains our priority. For potential new EAEU partners, we are ready to offer a wide range of cooperation formats, including dialogue partnership, preferential and non-preferential agreements, observer status and full membership.

All these are tools designed to promote the ideas of the Greater Eurasian Partnership. The EAEU is currently running free trade agreements with Vietnam, Serbia and Iran (temporary), a market worth almost $900 billion with a population of about 200 million people. Over the past decade the GDP of these countries increased threefold in absolute terms. December 2023 marked a full- fledged free trade agreement with Iran, expected to enter into force in the first half of 2025.

Mongolia concluded talks on the trade agreement, and its signing is envisaged by the end of the year. Active negotiations are underway to conclude free trade agreements with the UAE and Indonesia. Such agreements will enhance access to foreign markets for goods produced in the Union, and unlock the competitive advantages of ex-port-oriented sectors of the economies. In doing so, the preferential sales market for the EAEU could be expanded from the current 480 mil-lion to 879 million people. Deeper trade and economic co-operation between the EAEU, China and India is also in the pipeline.

Moreover, the EAEU has a separate non-preferential agreement with China aimed at digitalising transport corridors, developing cooperation in customs, veterinary and phytosanitary control, and other key areas of mutual interest. The EAEU has already concluded 90 memoranda on cooperation with third countries and organisations, and recently signed similar memoranda with the governments of Myanmar and Nicaragua. Active work is now under way to conclude a memorandum with Syria.

Another format of interaction, which implies a multi-speed degree of integration, is the status of an observer state to the EAEU. This status is currently held by Cuba, Moldova and Uzbekistan. The Union is open to new members. In late May, we received an application for observer state status from Iran. We assume that a decision on this matter may be delivered in the near future.

– From your perspective, what is EAEU’s role in forging sustainable ties between relevant states and integration groupings within the GEP emerging as a global initiative? What tools are used to hold dialogues with key players in the Eurasian region?

– I’ve already touched upon the Union’s current international agenda. All the integration outlines listed above are viewed in the EAEU as vital elements of the Greater Eurasian Partnership. A key focus of a promising integration in the Eurasian Economic Path Declaration is the aim to position the EAEU as a hub for shaping the GEP.

We intend to steadily pursue this work. We plan to rely on the best practice set up in the EAEU and improve existing mechanisms, including by broadening opportunities for stakeholders in the GEP to join them voluntarily. The Greater Eurasian Partnership entails the involvement of all concerned regional and global economies in trade, logistics and economic interaction in mutually beneficial formats, while taking into account the unique historical, geographical and economic competitive advantages of the participants.

I believe that our efforts to devel-op the GEP should be aimed at systematising multilateral cooperation, and under this concept, sectoral partnerships can be built on existing or newly created multilateral cooperation mechanisms, open to third-country stakeholders, with clear applied goals and with no sophisticated for-mal structures of coordination and regulation. Today, the joint search for new solutions and synchronised integration projects is indeed the foundation for a new architecture of global economic relations in Eurasia.

This approach enables us to reflect the diversity of economic systems, cultural features and levels of development of countries, which is vital for building a sustainable and win-win partnership. Multilevel and multi-speed integration projects can foster a more flexible response to the challenges of the global economy and help to adapt to the evolving environment.

Moreover, it can encourage the exchange of technology, investment and expertise, which, in turn, will contribute to economic growth and development of the region as a whole. It is essential that all stake-holders actively cooperate and share best practices, building a more harmonious and efficient system of interaction. Such a strategy serves to forge political and economic ties between states, contributing to stability and security in the region.

Photos provided by the press service of the Ministry of Economic Development of the Russian Federation