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Victor Khristenko told about updated approaches to integration

27 October 2019
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The appeal of Victor Khristenko

As the President of the Business Council and a member of the Presidium, I hereby thank you for the opportunity to share with you ideas about the elements that are important in updated approaches to integration.

All the parties, all the unions of industrialists and entrepreneurs, committees of chambers of commerce and industry, all the representatives of industrial unions already working directly with the EAEC will prepare their proposals before our meeting in Moscow on December 6. Our consolidated document will focus on a variety of issues related to the closure of white spots that remain in the integration process. But there will also be some more strategic elements.

The issue of restrictions and barriers for business is in the focus of the attention of all those who are interested in a common economic space. Not all barriers have been removed, not all obstacles and restrictions have been removed. The struggle is going on in the following way: 20% of the barriers are going to be eliminated within a year. But at the same time, ten new barriers appear.

There are reasons and grounds for that. Integration does not stand still, it moves. There are new agreements on new directions and it is not always possible to agree 100% on everything in new agreements. But if we have not agreed, if we have postponed something for tomorrow, you should consider that this will entail a new obstacle and barrier.

The emergence of barriers is not something fatal, and we shouldn’t stop working. This means that the task cannot be overlooked by all the structures of the Business Council. The topic of barriers should always be under control, and businesses should give feedback to the EARC and vice versa.

It is also important because they say, often with reference to statistics, that integration has not given something they expected from it. In my opinion, 99% of all issues we see are the issues of under integration. These are issues of seizures and restrictions, rather than the result of what integration has done to us. This is a consequence of what we have done with integration.

Integration has certainly given a "plus" to all members of the Eurasian Union, especially if we keep in mind that we are now experiencing difficult times. In any difficult circumstances, it is clear that it is easier to go through them together.

In my opinion, the program of action until 2025 should include what is contained in the Union Agreement. There is a very large part of the agreement, which is not fully disclosed, not fully implemented: this is the infrastructural part. It has unified common markets for energy resources, electric power industry market, transport policy, and transport resources market, telecommunication processes, a single financial market, which nobody canceled. All this as a sum of strategic goals has already been spelled out in the contract.

Therefore, the action plan until 2025 should not just include infrastructure programs. They should be more precisely disclosed. Maybe we should remove some uncertainty in the fact that it is not fully spelled out in the contract. This is the first one.

Another thing that should be reflected in our position is digital transformation. There is no room for this in the treaty. But work on the digital agenda has begun. This is a very big achievement. At the same time, it should be understood that digital transformation is a history that permeates everything, and without a unified approach of the EAEU countries, separate national digitalization projects will cause damage even to the already achieved results of integration.

Therefore, digital transformation should be a priority not only in the Business Council's Action Plan for 2020 but also in the priority of unified actions and decisions for all structures operating under the auspices of the Eurasian Union. Then we will get a much greater effect from the already adopted norms in the field of customs and technical regulation and all other policies. I'm not saying that the digital economy is a fantastic industry of a new type in itself, which allows the economies of each member-states to grow.

The third idea, which is extremely important, is human capital. We have already created a labor market. We have removed some barriers. We have even found perfect options with pension and medical care for people who offer their labor in the single labor market of the EAEU.

It seems to me that it is very important not only to keep an eye on the present but also on the future of human capital development. So, the future of education of all kinds: secondary, higher, professional. The main thing is the base of standards in this sphere. If we do not find coordinated approaches and views on the future in this area, then any minor incident will easily destroy the fragile position in the single market, including the mutual recognition of diplomas, qualifications and so on.

It seems to me that the full-fledged development of an effective single labor market is still very significant and important. This can give an internal impetus to improving integration since integration is ultimately done for people and human capital is the most important resource in integration.

The fourth point is the efficiency of governance and sovereignty. The speed of decision making, which is currently available in the EAEU, is simply becoming inconsistent with the pace of changes in life. We are beginning to lag behind everything and again blame integration for its failure. We just have to adjust to it, modernize the management machine. Today, at the supranational level, the decision-making process is cumbersome and not always efficient.

The materials prepared by the governments for the December meeting of the Presidents should reflect the change in the role of supranational structures. Their competence should increase, and the level of responsibility of a permanent governing body, the EAEC Board, should increase. We should not be afraid to delegate responsibility. Many years after the start of the work of the Customs Union Commission, the scope of powers should flow from the EAEC Council directly to the Board, while at the same time increasing the level of responsibility of its members for the decisions taken.

In any case, however, the EEU market for Kazakhstan is ten times larger than its market. Decisions that are taken with the participation of Kazakhstan extend to the entire territory, to one hundred and eighty million people, to the entire market. In this sense, it is an absolute increase, it is a strengthening of sovereignty, not its loss. It seems to me that the topic of protecting national interests or using the advantages of the common economic space is a false dilemma, a trap that should not stand in the way of improving the efficiency of the integration project.

With the increasing competence and speed of decision-making at the level of the EAEC Board, the sovereignty of the Union's member states is not weakened in any way. In my opinion, the integration process always leads to one thing – strengthening of sovereignty. This is much more effective because representatives of all countries are equally involved in the development and implementation of decisions that extend to much larger economic territories and have much greater economic power than those taken by each of those who have delegated these powers to the supranational level.

And, finally, another important point is the efficiency of coordination of efforts of business representatives of our countries. Since the establishment of the Business Council, we have expanded to five countries, we have had Moldova, we have committees on the digital agenda, on trade and economic cooperation with partner countries, on trade negotiations, on the single food market. The Presidium meets regularly, and a systematic dialogue with the Commission's leadership has been established. Many of the trade unions, whose representatives are members of the Business Council, by the way, are already becoming Eurasian. They raise the issue of forming self-regulating structures at the supranational level - the Councils of the respective market. I think at the meeting on December 6 we will also discuss how to improve our interaction with the advisory bodies of the Eurasian Economic Commission.


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