Connect with us

Russia

The Eurasian Economic Union: The Core of Continental Integration

Published

on

Photo: © Artyom Korotayev/TASS

The chairmanship in the (EAEU) in 2018 was passed to Russia from Kyrgyzstan. The presidency includes the Supreme Eurasian Economic Council (president level) the Eurasian Intergovernmental Council (prime minister level) and the Council of the Eurasian Economic Commission (EEC). Among the main expectations and plans for the year there are:

  • The admission of new countries.
  • Digital economy development.
  • Strengthening of national currencies as a way of de-dollarization.
  • Working on conclusion of the agreement on free trade zone with the Association of   Southeast Asian Nations (ASEAN).

Among the highlights of  the year there are :

– approval of the Customs Code by all country-members of the EAEU;

– coordination of the digital agenda by the member countries of the Union;

– systematic removal of barriers and restrictions in the EAEU markets and

– development of cooperation with other countries.

The year 2017 for the EAEU was marked by positive dynamics in different sectors: on the whole industrial production growth in the Union amounted to 3.6 %,  in agriculture – 1.5 %, in freight and passenger turnover – to approximately 7 %. In 2017 the volume of bilateral trade in the Union increased by more than a quarter. Since the beginning of 2017 foreign direct investment (FDI) in the EAEU has almost doubled.

An important line of action of the EAEC, in which significant success has also been achieved, is the establishment of relations with the European Union. As stated by Tigran Sargsyan, Chairman of the Board of Eurasian Economic Commission: “We note that in this year «the ice was broken». This is an important point. Previously, the EU was forced to follow closely what is happening in the EAEU, what institutions we set up and how we adhere to the declared standards. By now the contacts between the EAEC and the EU-level departments of the two commissions have started to develop”. According to the Eurasian Economic Commission, the main buyer of exported goods of the EAEU is the European Union: 50.3 % (of total exports), among them, the main buyers are the Netherlands (10,9 %), Germany (7.3 %), Italy (6,3 %), Poland (3.4 %). It is obvious that sanctions and the food embargo has not prevented the increase in turnover of bilateral trade. According to some experts, there has recently been some positive signals in the launching of the industry dialogue between the EAEU and the EU. Regarding cooperation between the EU and the EAEU in the energy sector, it is important to understand that in the near future the share of the Eurasian continent will account for more than half of the total world electricity demand, and therefore it will have a significant impact on the development of global energy. Note that the planned reforms of the EACE energy market (in 2019-2025) are being developed on the basis of the WTO regulatory framework. This increases the level of compatibility of European and Eurasian energy unions. The Director of the EAEC Integration Development Department, Sergey Shukhno said: “In the foreseeable future the EAEC expects to establish a full-scale dialogue in its relations with the EU.” Business, particularly in Europe, actively promotes contacts between the two unions and, in fact, is a kind of catalyst for the establishment of relations.

New members

Iran plans to join the Union in February 2018. The Iranian market after the lifting of sanctions begins to open up to external players and is very interesting for companies of the countries-members of the Union. In addition, on the list to sign economic and trade agreements with the Eurasian economic Union there are such countries as India, Egypt, Israel, Serbia and Singapore. At present EAEC has been in  intensive dialogue with these countries. About 50 countries have expressed a desire to cooperate with the Eurasian Economic Union (EAEC), as stated in one of his speeches of Russian Foreign Minister Sergey Lavrov.

National currencies and de-dollarization

At present about 70 % of payments for exports in the EAEC are made in national currencies. The use of the national currencies by the members of the Union in mutual transactions helps the business – it reduces currency risks and removes various economic and regulatory barriers. In addition, it helps the EAEC economies to strengthen the macro-economy and to develop local financial markets.

According to a report published by the EDB Centre for Integration Studies the share of Russian ruble in the currency structure of payments in the EAEU has increased over the last six years from 56% to 75%, while the dollar’s share during the same period decreased from 35 % to 19 %. According to their data, the settlements between the countries in rubles make up more than 69 billion dollars, in U.S. dollars – about 18 billion dollars, in Euro – about 5 billion dollars. Strange as it may sound, but the policy to reduce dependence on the dollar was also helped by the economic sanctions imposed by Western countries against Russia in 2014. It should be noted that the Euro is also gradually being pushed out of payments inside the EAEU: if in 2013 the share of Euro settlements was 8%, then in 2017 it was reduced to 6%. According to analysts’ forecasts, if the growth of the ruble’s share continues to grow at the same rate, then the countries of the EAEU can completely switch to trading in rubles by 2023-2025. Of course, much depends on the stability of the world economy.

According to expert assessments, the history of the EAEU began not from the moment of the formation of the Union in 2015, but from the collapse of the USSR. The Eurasian Union began its development under the influence of various factors and not as an attempt to create the USSR 2.0, but as a reaction to global macroeconomic processes. Some western experts point out that this is a Moscow project aimed at strengthening Russia’s geopolitical influence. Moreover, Moscow is called the initiator and the progenitor of new integration in the post-Soviet space. However, the historical fact is that the President of Kazakhstan Nursultan Nazarbayev presented the project of the Eurasian Union in March 1994.

To date, the EAEU model is characterized by a market economy and an institutional arrangement in accordance with democratic systems. It is important to note that the decisions, directives and recommendations of the EAEC Council are taken by consensus, which indicates full equality of the participating countries. The EAEU agenda  is deliberately limited to economic cooperation. And no matter how Western critics tried, political issues are not within the competence of the EAEU, but are resolved in the formats of bilateral interaction, for example, the Union State of Russia and Belarus, the CSTO and the CIS.

First published in our partner International Affairs

Continue Reading
Comments

Russia

St. Petersburg International Economic Forum 2018

Kester Kenn Klomegah

Published

on

The St. Petersburg International Economic Forum 2018, one of the annual international platforms that brings together political, industry and business leaders to discuss the most pressing issues affecting global economics, development and finance, will take place on May 24 to 26 in St. Petersburg.

Ahead of the forum, the official website of the President of the Russian Federation has published his welcome greetings to participants, organisers and guests. In his greetings, Putin expressed his confidence that ideas and initiatives to be developed during the forum would facilitate the recovery and growth of the world economy.

“By harnessing the wealth of scientific and technological potential which is rapidly expanding in digital and other areas today, we can improve quality of life and boost stable and harmonious development in all nations and across the world as a whole,” he stressed in his message.

“And it is crucial that we strive towards increasing mutual trust, promoting wide-ranging integration processes, realising large-scale and promising projects. Russia is always open to this kind of partnership and cooperation,” Putin said.

According to RosCongress, the event organiser, about 15,000 guests from more than 140 countries expected to participate in the forum. France, China, India and Japan as guests of the forum will have their own exhibition pavilions on site, which will house a presentation area and a business space for delegations and representatives to interact with business partners from other countries.

Delegations from Germany, Switzerland, Sweden, Greece, Italy, India, Saudi Arabia, Qatar, Israel, Vietnam, USA, Canada, African countries and others will participate in various business events. BRICS member states (Brazil, India, China and South Africa) have been prominently represented there.

For foreign participants, including Africans, the forum is very useful for networking and discussing business strategies, and serves as an important study platform for deepening knowledge about the economy and possible ways of transacting business in Russia.

Series of official speeches and panel discussions will undoubtedly dominate the three-day event. The special sessions on business and investment opportunities will include the “Russia – Africa Business Dialogue” that has generated increasing interests among Russian and African businesses, international companies, African governments and institutions.

According to Anton Kobyakov, Adviser to the President of the Russian Federation and Executive Secretary of the SPIEF Organising Committee, the upcoming forum will hold two special celebrations marking the occasions related to the continent: Africa Day and the 55th anniversary of the African Union.

“Economic cooperation between Russia and Africa has been developing rapidly during recent years. We have seen a positive dynamic in trade with Ethiopia, Cameroon, Angola, Sudan, Zimbabwe and other countries”, says Kobyakov. “I strongly believe that Russian-African cooperation at SPIEF, Russia’s largest forum will stimulate trade and economic ties, as well as investment activity.”

Kobyakov further disclosed that during the event, experts will share best practices and discuss new opportunities for implementing joint projects in the BRICS countries. Sergey Katyrin, the President of the Chamber of Commerce and Industry of the Russian Federation, will moderate the session.

“The paramount task for BRICS is to continue strengthening efforts aimed at solving international issues in the spirit of unity, mutual understanding and trust. The prospects for cooperation and joint efforts of the BRICS member states will be discussed at the SPIEF 2018. I am confident that this will give momentum to further development of a fruitful dialogue on key world issues,” Kobyakov says.

Over the past few years, Russian authorities have made relentless efforts toward raising Russia’s political influence and economic cooperation in some African countries. Thus, discussions at the forthcoming forum will undoubtedly focus on reviewing the past and the present as well as proposing practical and the most effective ways to facilitate investment activities and that might include promising areas such as infrastructure, energy and many other sectors in Africa.

On her part, Alexandra Arkhangelskaya, a Senior Researcher at the Institute of African Studies and a Senior Lecturer at the Moscow High School of Economics said in an interview with me that Russia and Africa needed each other – “Russia is a vast market not only for African minerals, but for various other goods and products produced by African countries.”

Currently, the signs for Russian-African relations are impressive – declarations of intentions have been made, important bilateral agreements signed – now it remains to be seen how these intentions and agreements will be implemented in practice, she pointed out in the interview.

The revival of Russia-African relations have be enhanced in all fields. Obstacles to the broadening of Russian-Africa relations have be addressed more vigorously. These include, in particular, the lack of knowledge or information in Russia about the situation in Africa, and vice versa, suggested Arkhangelskaya.

“What seems to irk the Russians, in particular, is that very few initiatives go beyond the symbolism, pomp and circumstance of high level opening moves. It is also still not clear how South Africa sees Russia’s willingness (and intention) to step up its role in Africa, especially with China becoming more visible and assertive on the continent,” said Professor Gerrit Olivier from the Department of Political Science, University of Pretoria, in South Africa.

Today, Russian influence in Africa, despite efforts towards resuscitation, remains marginal. Given its global status, Russia has to be more active in Africa, as Western Europe, the European Union, America and China are, but Russia is partially absent and playing a negligible role, according to the views of the retired  diplomat who served previously as South African Ambassador to the Russian Federation.

“Russia, of course, is not satisfied with this state of affairs. At present diplomacy dominates its approach: plethora of agreements entered into with South Africa and various other states in Africa, official visits from Moscow proliferate apace, but the outcomes remain hardly discernible,” he said.

“The Kremlin has revived its interest on the African continent and it will be realistic to expect that the spade work it is putting in now will at some stage show more tangible results,” Professor Olivier wrote in an email query from Pretoria, South Africa.

Last June 2017, the African representatives including heads of state, deputy president, ministers or their deputies, entrepreneurs and diplomats came to the St. Petersburg forum from Angola, Algeria, Burundi, Egypt, Gabon, Guinea, Morocco, Mozambique, Namibia, South Africa and Zimbabwe.

Continue Reading

Russia

Social protection for Filipino workers in the Russian Federation

Kester Kenn Klomegah

Published

on

Foreign Minister Sergey Lavrov with Philippines’ Secretary of Foreign Affairs Alan Peter Cayetano

The Philippines and Russia get closer to signing an agreement that would protect Filipino workers in the Russian Federation. As the number of migrant Filipino workers increases, Moscow and Manila are busy negotiating a bilateral labour agreement that could allow thousands more overseas workers into various sectors of the Russian economy.

On May 15, formal discussions were held by Foreign Minister Sergey Lavrov with Philippines’ Secretary of Foreign Affairs Alan Peter Cayetano in Moscow.

Sergey Lavrov noted: “We are interested in ensuring that Filipino workers, who work in the Russian Federation, are socially protected. Many of them were here through private companies, often without the necessary licenses.”

“All this does not provide social protection for Filipino citizens working in the Russian Federation. With the conclusion of the agreement, the beginning of preparation of which we have agreed today, we will solve these issues. We have such agreements with a number of other countries, including ASEAN member States,” he promisingly added.

Earlier, a Regional Migration Specialist at the International Labour Organisation (ILO)’s Regional Office for Asia-Pacific in Bangkok (Thailand), explained in an interview with me that a comprehensive labour agreement between Russia and the Philippines could be positive, if it established procedures and standards for the recruitment, employment and subsequent return of migrant workers.

According to the Philippines Overseas Employment Administration (POEA), Russia officially registered nearly 15, 000. Consequently, such an agreement (could) guarantee the labour rights of migrant workers and eliminate or limit recruitment costs. It will further provide Filipino workers with access to emerging labour market there.

The Federal Migration Service (FMS) office in Moscow has also explained that “official” Filipino workers are entering the country on tourist or business visas, assisted by middlemen and local licensed agencies that often act as migrants’ direct employers and channel them straight into labour market.

The Philippine government has been negotiating for better regulations and working conditions for its citizens for the past several years with little or no conclusive results.

In March 2012, for instance, the then Philippine Secretary of Foreign Affairs, Albert Del Rosario held an official discussion in Moscow with Minister Sergey Lavrov on the possibility of sealing a bilateral labour agreement.

Besides, a string of events and conferences over the years have highlighted renewed interests in developing the market of overseas Filipino workers, who are believed to be one of many solutions to Russia’s human resource needs.

Many experts believe that economic modernisation in Russia depends heavily on skilled foreign labour, limited to certain specific sectors like domestic work, finance, and construction.

The fact that Russia willingly entered into the negotiations implies not only that it has an urgent need for the services of foreign workers but also that it is fully aware of the benefits of such an agreement.

Experts have pointed to the Philippine government’s success in deploying its workforce abroad, in many foreign countries. About 10 percent of The Philippines’ population of 90 million people works abroad, with regular remittances accounting for up to 25 percent of the country’s gross domestic product (GDP).

Some estimates put the total contribution to the Philippine economy by specialists working abroad at $50 billion last year.

The Philippine Overseas Labour Office in Rome (Italy), explained to me that the Philippine government has an official policy of deploying Filipino workers only to countries that guarantee protection and promotion of their rights, welfare and interests.

Under a recently enacted law, the Philippine government banned its nationals from seeking employment in countries that do not guarantee the rights and welfare of foreign workers, or whose local labour and social legislation does not cover migrant workers.

Quite recent, the Philippines government and the Kuwaiti government signed an agreement on the recruitment, use and protection of Filipino workers after a diplomatic row over abuse and inhuman treatment of working Filipinos.

It therefore implies that The Philippines and Russian authorities have to work on effective ways to establish and improve the bilateral legal framework for mutual benefit for both countries. *This special report from Kester Kenn Klomegah, an independent researcher and policy consultant, in Moscow.

Continue Reading

Russia

The Russian strategy towards North Africa

Published

on

As John Mearsheimer quote “The ideal situation for any state is to experience sharp economic growth while its rivals’ economies grow slowly or hardly at all”. Russia paves the way to tighten its economic and military cooperation’s with Egypt as one of the main North African allies so far.

Russian keen interest in Africa, particularly North Africa, began in the 18th century, with benefits and incentives in the Mediterranean bowl as part of an expansion strategy that was based on economic, political and military estimation.

Africa changed between east and west in terms of alliances which helped form its, economic, cultural, political and militarily balance. Like now, after changes in the status of relationships among alliances, and after structures of the region shifted with a picture that is different to the previous one that had seen over the era of the alliances of the former Soviet Union during the Cold War, Russia is back again after the removal of the Americans. This time, Russia came to the region with the notion of regional rivalry, after a long time, which could make it a key actor until the US resets its position. Russia has put all its power and influence on playing a role in which it would take back its position in North Africa towards enlarging and deepening the economic and investment cooperation as well mutual relations that back to the 1960s.

Due to this, Russia has taken many steps that show its mutual incentive and awareness in North Africa with the main interest in Egypt. This came after the decline of Egyptian-American relations, so Russia and Egypt signed many political agreements, including one of the important agreement which is modernized Egyptian air defense system. This step is advised a Russian warning to the Americans that it is on its way to subjoin one of its significant allies in the region, which used to experienced strategic and military cooperation depend on mutual interests. American vessels used to be the first one when crossing the Suez Canal and could use its air zone in interchange for annual military aid equivalent to $1.3 billion in 2013, which America froze in protest upon the displace of the first democratic regime in Egypt that came after the January 25th Revolution and the coup d’état against legitimacy.

The objective of Russian return to the region is not incomparably limited to economic arbitrations; there are mainly arms contracts, security exchange in fighting terrorism and upgrading trade process. Other than Egypt, there are also other promising destinations which began with diplomatic visits, such as Morocco and Algeria. The significant aspect of returning of Russia to North Africa at this time is the lack of any ideological agenda in the new agreements and cooperation plans.

Currently, Russia embarks to Egypt; the foremost step reaches several targets. Basically, Egypt is seen as geo-strategic access and convenient gateway through Africa, and sub-Saharan Africa where the natural resources wealth of uranium, gold, oil and maritime exist. These natural resources might be a rational reason for future dispute between Russia and America, especially after US withdrawal from North Africa, but only after having strengthened its presence in sub-Saharan Africa and safeguards Maritime roads for Gulf oil through the region.

As long as the two superpowers competing, North Africa is the free land of future investment that requires an agreement between the Russia and America, especially as other powers, such as China, are present and access Africa from its center. China was involved and engaged in exploring and manufacturing Sudan’s oil, before the division of the state of South Sudan in 2011. Today China is growing its activities after most oil fields became part of South Sudan. In addition to the new state, China has other markets in central Africa and the east. It only collaborates and participates in economic and trade sectors and infrastructure construction in Sudan.

The Russian president Putin embark to Cairo last Monday after a concise and unpublished visit to a Russian military air base in Syria. The air base has offered the main ledge for the air campaign Russia has undertaken since September 2015 under the backing of Syrian President Basher Assad.

Egypt’s constantly close ties with Russia get back to the 1950s and 1960s when Egypt became a close Russian ally at the height of the cold war. Therefore, Egypt changed sides in the 1970s under the late President Anwar Sadat, who replaced Moscow with Washington as his country’s chief economic and military backer following the signing of a U.S.-fund peace treaty with Israel in 1979. Egypt has since become an important successor of American. aid. Under el-Sisi, Egypt has been able to sustain close relations with both Russia and the United States.

In term of Military Cooperation, Sisi and Putin also tackled about Syria and mutual rejection of U.S. President Donald Trump’s decision to recognize Jerusalem as the capital of Israel, a move that has sparked protests across the region and from European capitals as well. The high-level Russian visit comes after the U.S. government in August decided to deny Egypt $95.7 million in aid and to delay another $195 million because of its full failure to make progress on human rights and democratic norms.

Russia started a military operation to back and support Syrian President Bashar al-Assad in September 2015, and there are clues Moscow is keen to enlarge its military existence in the region.

To sum, Russia chose Egypt for its geopolitical and strategically partner combining three continents. Therefore, let’s see how Russia could maintain its presence in the region showing off its ability to promote economic interests, especially with African partners. So will Africa be for Russia alone?

Continue Reading

Latest

Newsdesk6 hours ago

An economic space from the Atlantic to the Pacific

On the 23 May, in the run-up to SPIEF, a roundtable held jointly between the Roscongress Foundation and St. Petersburg...

Newsdesk7 hours ago

Russia’s Economic Recovery Continues: Modest Growth Ahead

Russia’s economic recovery continues, amidst relatively high oil prices, enhanced macroeconomic stability, gradual monetary loosening, and ongoing momentum in global...

Green Planet8 hours ago

Governments need to act to encourage plastic recycling markets

Plastic recycling is failing to reach its full potential as low recovery rates of plastic waste, poor quality of recycled...

Economy9 hours ago

Business Chemistry: Practical Magic for Crafting Powerful Work Relationships

Ever wonder what it is that makes two people click or clash? Or why some groups excel while others fumble?...

Newsdesk10 hours ago

UNIDO at SPIEF 2018: Increasing the contribution of women to economic growth and prosperity

On the opening day of the St. Petersburg International Economic Forum (SPIEF) 2018, the United Nations Industrial Development Organization (UNIDO)...

South Asia11 hours ago

What to do with Pakistani militant Hafez Saeed? Pakistan and China grope for ambiguity

Recent remarks by several senior Pakistani officials suggest that Pakistan and China are groping with how to deal with globally...

Energy13 hours ago

The Bigger Picture: Convergence of Geopolitics and Oil

The rising tensions in Middle-East and the rising oil prices only show how strong the link between oil prices and...

Newsletter

Trending

Copyright © 2018 Modern Diplomacy