Eurasian Economic Union Countries Research Articles

Dedollarization and settlements in national currencies: Eurasian and Latin American experience

In light of the sanction pressure on Russia, as well as a sharp deterioration in the global financial system under the conditions of the coronavirus pandemic in 2020, it is expedient to increase operations in the national currencies of the Eurasian Economic Union (EAEU). The purpose of the study is to consider the Eurasian and the Latin American experience of dedollarization and the advancement of settlements in national currencies and to propose measures for creating a comprehensive program to promote settlements in the national currencies of the EAEU countries. The article analyzes the dynamics of operations in these currencies on the FX market of the Russian Federation, estimates the integrated FX market of the EAEU countries, including the experience of developing operations with the Chinese yuan. The authors have identified the prospects of the Russian ruble as a regional currency of the EAEU.

Country Attractiveness: Analysis of the Main Factors

Attracting investment is a relevant issue for any economy. The aim of the research is to study the factors affecting the inflow of foreign direct investment (FDI) by the example of countries leading in attracting FDI and countries of the Eurasian Economic Union (EAEU). The author uses both qualitative and quantitative methods to analyze research data of other authors, reports of international organizations and the World Bank database. The author did econometric calculations using the application package Stata 14. A linear regression model using the least-squares method was built. The author selected several factors that presumably affect FDI inflows to the EAEU countries. The calculations were based on the combined panel data analysis model used in the BRICS and MINT countries, which allowed the author to calculate the degree of influence and significance of a number of variables of FDI inflows. The study shows that political stability is more important than the inflation rate, the volume of foreign trade and final consumption expenditure. The author concluded that poor institutional development hinders investment. In particular, the negative institutional factors are non-transparent regulation policy, the dominance of public property and the lack of proper investment protection system, low degree of rule of law and limitation of economic rights. Further study of issues related to attracting FDI should consider the trends of mass digitization since the introduction and implementation of digital technology are becoming an integral part of the competitiveness of the modern economy.

ANALYSIS AND PROSPECTS FOR THE DEVELOPMENT OF REGIONAL ENERGY INTEGRATION OF THE EURASIAN ECONOMIC UNION COUNTRIES

In the presented paper, it is proved that a new objective trend appears in the current conditions of Eurasian region development. It will strengthen mutual cooperation between the countries of Eurasia and it will enrich regionalization process in the context of world energy markets restructuring, intensification of competition, deglobalization tendencies and other challenges of the world economy. At the same time, fuel and energy complex (FEC) is becoming the main driving force for the countries of Eurasian region and their further development. The concept of regional energy integration of the Eurasian Economic Union (EAEU) countries is offered in the paper. It's based on the strategic advantages of economic integration in relation to the fuel and energy complex. Energy potential analysis of the EAEU member countries is performed. The issues of common energy markets formation in the region are considered. The main problems and a number of uncoordinated tasks between the countries participating in integrational process in this area are highlighted in terms of common gas, oil and oil products market formation, although it is noted that development and approval stage of the Programs for such formation is mostly completed. It is expected that these markets will be fully formed by 2025. It was emphasized that energy integration is one of the most important areas for the EAEU countries development, which is expected to bring significant economic benefits in the long-term period.Keywords: regional energy integration, common energy markets, energy potential, the Eurasian Economic Union (the EAEU).JEL Classifications: F02, F63, O13DOI: https://doi.org/10.32479/ijeep.9806

Legal Aspects of Harmonization of Labor Legislation of Kazakhstan and the Eurasian Economic Union Countries (EAEU)

The issues of legal aspects of harmonization of labor legislation of Kazakhstan and the countries of the Eurasian Economic Union (EAEU) are investigated. The urgency of the issue under consideration is determined by the further necessity to bring into a harmonious combination the legal aspects of the legislation of Kazakhstan and the states that are members of the EAEU. Harmonization in the legal field involves the development of a unification of the laws of the above states in the field of labor relations. To maintain a coherent policy in the field of social and labor relations in Kazakhstan and the countries included in the EAEU, the foundations of labor legislations have been developed. But, at the moment, they are advisory in nature, while the harmonization of labor legislations in the legal field requires the approval of the adopted legislative acts of these states in this area. In this regard, a search is being made for recommendations on the harmonization of the legal aspects of the issue under study regarding Kazakhstan and the countries of the Eurasian Economic Union (EAEU). The leading approach to the study of this issue is to evaluate the current legal standards of these countries in the field of labor law and identify ways for their further integration in this direction. The prospects for research in this direction are determined by the possibility of assessing the realism of harmonizing the labor legislations of Kazakhstan and the countries, members (EAEU), which will favorably affect the further integration of Kazakhstan into the legal framework of the Eurasian Economic Union. The applied value of this study is to identify the prospects for the development of labor laws of Kazakhstan and the countries that are members of the Eurasian Economic Union (EAEU) in order to determine specific measures for the integration of labor legislation of Kazakhstan in the legal field of the EAEU in the future.

On the Major Differences between the Banking Systems of the EAEU States

The presented study examines the problems of integration of the national banking systems of the member states of the Eurasian Economic Union (EAEU).Aim. The study aims to examine the major differences in various aspects of functioning of banking systems in the EAEU member states in terms of their impact on integration processes.Tasks. The author identifies the most prominent features of the banking systems of the EAEU states; reveals the depth of the existing differences through a comparative analysis of various indicators of national banking systems; outlines ways of overcoming integration problems associated with differences in the banking sectors of the Union states.Methods. This study is based on universal general scientific methods and elements of comparative, functional, and economic analysis within the framework of a systems approach. The author uses regulatory documents and banking reports of the EAEU states, statistical and analytical materials of the Eurasian Economic Commission (EEC), and data of Moody’s international rating agency.Results. The study identifies a number of aspects that contain the major differences in the functioning of banking systems in the EAEU member states; highlights the disproportions in the scale, level of development, financial stability, and risks of the banking spheres of the Union states; comparatively analyzes the proportion of banking and non-banking structures in the system and the share of the government and non-resident companies in the capital of banks; marks the difference in the pricing of banking services; determines differences in the existing approaches to banking regulation and the established standards; analyzes the major differences in the legislative acts of the central banks and governments of the EAEU member states and in the terms and definitions used. According to the results of the study, the major factors hindering the development of integration processes between the banking systems of the EAEU states are identified.Conclusions. The existing differences between the banking systems of the EAEU countries are diverse and multifaceted. The author states that the aspects addressed in this study have a significant negative impact on the further development of integration processes, describing the major directions and actions of the member states aimed at minimizing the exiting differences, which are required to facilitate the convergence of the states and the transition towards a common financial market.

Текущее состояние продовольственной безопасности в странах ЕАЭС

<span> В статье рассматриваются принятые концепции продовольственной безопасности и оценивается её актуальное состояние в странах Евразийского экономического союза (ЕАЭС). Представлен анализ экономической и физической доступности продовольствия, зависимости внутреннего рынка от импорта. Приводятся данные о среднедушевом потреблении продуктов питания (в сравнении с установленными нормативами), энергетической ценности рациона, доле расходов на продовольствие в структуре потребительских расходов населения, а также авторские оценки относительно фактических и нормативных потребительских расходов домашних хозяйств в разрезе 10%-х доходных групп. На основе данных балансов ресурсов и использования основных видов агропродовольственной продукции рассчитана доля импорта в их внутреннем потреблении. Автор делает вывод о том, что действующие критерии продовольственной безопасности формально выполняются по большинству продуктов питания во всех странах ЕАЭС, кроме Кыргызстана. Вместе с тем сохраняется проблема недостаточной экономической доступности продовольствия в требуемых объёмах и ассортименте для значительной части населения. Показано, что основную часть импорта сельхозсырья и продовольствия составляют поставки из стран-партнёров по ЕАЭС. Это уменьшает риски внешних шоков предложения агропродовольственной продукции и создаёт предпосылки для смягчения целевых установок концепции продовольственной безопасности в странах ЕАЭС в отношении минимальных уровней продовольственного самообеспечения.</span>

Mathematical Modeling of Optimal Measures to Counter Economic Sanctions

The paper considers the problems of developing recommendations in the area of fiscal and trade policies to counter economic sanctions at the level of both individual countries subject to such sanctions and at the level of economic union including such countries. Research study has been carried out based on the developed dynamic multi-sectoral and multi-country computable general equilibrium model, which describes the functioning of the economies of nine regions of the planet, including five countries of the Eurasian Economic Union (EAEU). The initial data of the model contain built sets of consistent social account matrices (SAMs) for the historical and forecast periods based on data from the Global Trade Analysis Project (GTAP) database, national input-output tables, international trade and IMF data (including forecast) for the main macroeconomic regions indicators. Results of the impact on macroeconomic and sectoral indicators of the EAEU countries and other regions of a hypothetical scenario providing the imposition of additional economic sanctions since 2019 against Russia from some regions were obtained. An approach to solving problems to counter the sanctions policy based on the parametric control theory by setting and solving a number of dynamic optimization problems to determine optimal values of the corresponding fiscal and trade policy instruments at the level of individual EAEU countries and the EAEU as a whole was proposed.
 The results of the model-based calculations were tested for the possibility of practical application using three approaches, including evaluation mappings’ stability of the exogenous parameters’ values of a calibrated model to the values of its endogenous variables. The results demonstrate greater efficiency for each EAEU country using a coordinated economic policy to counter sanctions, compared with the implementation of such policy separately at the level of each country.

Свести концы с концами

Свести концы с концами

ENERGY SECURITY, ECONOMICS AND ENVIRONMENT IN THE EURASIAN ECONOMIC UNION: CURRENT AND FUTURE SCENARIOS

The Eurasian Economic Union (EAEU) countries have actively taken a direction to promote political initiatives to strengthen energy security. Major policy initiatives are programmes to increase domestic renewable energy production, improve energy efficiency and reduce CO2 emissions from fossil fuel combustion. This paper aims to show how energy security indicators namely primary energy intensity of GDP (EI), primary energy dependence (PE), net import dependence (ID), supplier dependency (SD) vary in a range of energy security policies - Renewable Energy Development (REN), Energy Efficiency Reduction (EFF), and Greenhouse Gas Reduction (GHG). Furthermore, factors preventing the development of non-traditional and renewable sources of energy in countries of Eurasian Economic Union are considered. Mechanisms of solving existing contradictions are proposed. Particular attention is paid to the need to include environmental costs and pollution losses in economic analysis, which will improve the competitiveness of alternative energy sources. The necessity of accelerated development of alternative energy to increase energy supply, energy saving, energy and environmental security is shown.Keywords: renewable energy, energy security, sustainable developmentJEL Classifications: 0130, Q400, Q430DOI: https://doi.org/10.32479/ijeep.9127

Imperatives of the Economic Integration of the Eurasian Economic Union Countries

The development of integration of the Eurasian Economic Union (EAEU) countries is limited by the system of imperatives that includes challenges and threats to the interests and existence of the integration block and its members. The article identifies challenges to the development of the EAEU: liberal globalization, transition to the sixth technological order, global digital transformation, challenges associated with the emergence of new development centers and a new system of international redistribution of economic growth factors. It was established that external and internal challenges that do not receive well-timed and adequate answers are transformed into a system of threats. The paper provides a list of external threats to the Eurasian integration: threats, coming from western “partners” aimed at deterring and preventing integration processes in the EAEU, threats of a military nature, as well as threats of forming alternative integration projects. The author presents the analysis of internal threats: ethnic conflicts, changing foreign policies of the participating countries, conflicts of economic and political interests, problems of the financial and payment systems, limited mutual trade and investment relations, insufficient development of the transport infrastructure, the threat of “erosion” of a single economic and transit space of EAEU if the Unit is constructed on terms of “continental” integration. It is concluded that it is necessary to counteract the listed threats with measures of an economic, military-political or other nature.

Trade in electricity under WTO and EAEU Law: compatibility of two legal regimes†

Abstract Accession of Russia and Kazakhstan to the World Trade Organization (WTO) constitutes a landmark event in the history of this organization, especially in relation to trade in energy, in general, and trade in electricity, in particular. As a result, the role of the WTO in regulating trade in electricity has increasingly grown. However, the Treaty on the Eurasian Economic Union, a treaty that binds both Russia and Kazakhstan, necessitates additional regulation for trade in electricity, concurrent with law of the WTO. Recently, this treaty was amended by the Protocol on Common Electricity Market on 1 July 2019. As a result, compatibility issues between the rules of the WTO and the Eurasian Economic Union arise. This article concludes that the law of the WTO can be relevant to trade in electricity between Member States of the Eurasian Economic Union and third countries because of the specific place of the rules of the WTO under the Eurasian Economic Union legal order.

The Role of Russia in the Development of Integration Processes in Emerging Markets

Due to post-crisis slowdown in globalization, there is a necessity to structurally transform the Russian economy, strengthen the existing strategic partnerships and explore new economic growth points. Thus, the paper substantiates the importance of Russia’s participation in macro-regional economic associations. We examine the problems and risks of partnership development between the countries. Based on a mutual trade significance index, we analyse the importance of trade between the Russian Federation and the countries of the Eurasian Economic Union (EAEU), BRICS (Brazil, India, China and South Africa), and Shanghai Cooperation Organisation (SCO). The analysis shows that the share of Russian trade with the BRICS and SCO countries is growing fastest, largely due to the trade with China. At the same time, for the economic growth of the EAEU member countries, intra-union trade is less beneficial than the development of foreign trade relations. Moreover, recently the EAEU partners of Russia have been more interested in establishing and developing relations with third countries. The EAEU countries face a variety of problems during the integration process, including the fundamental incompatibility of the interests of the participants. Based on the obtained results, we demonstrate the development prospects of cooperation between Russia and various integration associations. The main obstacle for establishing new economic unions is the low competitiveness of the Russian economy. Even though the current situation does not enhance inter-regional cooperation, it provides Russia an opportunity to strengthen cooperation in the Asia-Pacific region and increase its participation in multilateral mechanisms. We conclude that in the medium term EAEU has to focus on strengthening the existing institutions and creating a modern flexible economic partnership.

Сравнительный анализ инновационного развития стран-участниц Евразийского экономического союза

Сравнительный анализ инновационного развития стран-участниц Евразийского экономического союза

EU-EAEU dilemma of Armenia: Does science support politics?

On January 1, 2015, the Republic of Armenia joined the (Russian-led) Eurasian Economic Union (EAEU) and actually refrained from entering into the alternative Association Agreement with the European Union (EU). Nevertheless, despite the prevalence of historic ties with the scientific community of the EAEU member-states and some push towards that direction, Armenian researchers demonstrate a certain scientific autonomy, which is expressed in numerous international scientific collaborations with researchers from many European countries. This paper proposes a bibliometric analysis of the international scientific collaboration between (i) Armenia and EU countries, and (ii) Armenia and EAEU countries, based on the papers indexed by the Web of Science Core Collection database and the Russian Science Citation Index database. Results indicate that the international collaboration with researchers from countries of both blocks gradually grows, displaying similarities and differences. Globally, Armenian researchers seem to collaborate more with researchers from EU countries rather than EAEU countries. Despite this, individual collaborations with Russia continue to prevail over those with other individual European countries, primarily Germany. Finally, it has been noted that “megaprojects” significantly influence the scientific collaborations between Armenian and foreign researchers.

ENERGY SECURITY AND SUSTAINABILITY IN EURASIAN ECONOMIC UNION IN THE TERMS OF ECONOMIC GROWTH: THE CASE OF KAZAKHSTAN’S ENERGY SECTOR UP TO 2040 PERSPECTIVES

The economy of Kazakhstan is the first economy in Central Asia and the second among Eurasian Economic Union (EAEU) countries after Russia. On rates of hydrocarbon raw materials extraction Kazakhstan is included into first ten countries of the world. Kazakhstani economy is based on heavy industry, ferrous and non-ferrous metals, and oil and gas. And it allows Kazakhstan is being on the road of economic growth. With economic growth, the energy production and consumption are also increasing rapidly, resulting first of all, on harmful carbon emissions. Thus, the purpose of this research is to carry out a comparative assessment in the energy sector development and to submit forecast of its demand and its environmental impact in terms of Kazakhstani economic growth up to 2040. First scenario (Base Case) assumes conventional development pattern together with neither significant changes in the patterns of energy supply and demand nor extensively changed policies and measures. The second one (Mitigation) assumes a technological improvement, regulation and industrial development policies and additional policies which have been designed to promote energy efficiency and reduce emissions across the economy. The simulations are applied until the year 2040, while 2015 is set as the base year. The findings suggest in both scenarios Kazakhstan will continue to pursue its economic development driving energy demand and carbon emissions will also raise. However, under Mitigation Scenario, emission intensity will be lower insignificantly.

Energy Cooperation between the EAEU and China

In May 2018, the Eurasian economic union (EAEU) and China signed a non-preferential agreement on trade and economic cooperation. The agreement provides for joint projects in many economics sectors. For China, this agreement is a new step in the implementation of the large – scale project «One belt-one road», as well as an attempt to approach the creation of a free trade zone in the SCO countries. For the EAEU, the trade agreement with China is an attempt to establish its own game rules in the process of pairing the EAEU and the Silk road economic belt. Attracting investment from China will allow the EAEU countries to develop large transport and energy projects, because China is still one of the world leaders in energy consumption. However it is important to bear in mind that China faces two important energy challenges: on the one hand, the necessity of transition from coal to natural gas, and, on the other hand, the necessity of transition from fossil to renewable energy sources. The analysis of the current agreements shows China's interest in the EAEU countries only from a logistical point of view, which means the need for the EAEU countries to create a unique proposal for the supply of energy resources to China.

Free Trade Agreement between the EAEU/Russia and Japan: soes it Make Sense?

Despite rising protectionist trends, the number of free trade agreements (FTAs) continues to grow worldwide. The countries of the Eurasian economic Union (EAEU) also do not remain aloof from these processes. Feasibility studies of signing such agreements with various partner countries are underway in the Eurasian Economic Commission. This article discusses the likely effects of the FTA with Japan. A review of the structure and trends of mutual trade is done. The analysis reveals the statistical and logical relationship between the dynamics of trade in goods between Russia and Japan and oil prices, as well as the impact of such factors as the devaluation of the Russian ruble, the increase in duties on the import of used cars, WTO accession and sanctions. The article assesses the possible quantitative effects of liberalization of trade in goods between the EAEU countries (primarily Russia) and Japan. We use the partial equilibrium model SMART (from the WITS toolkit) and calculations for the budget loss of zeroing of import duties. The structural asymmetry of mutual trade and the likely effects of its liberalization on business and budgets of the participating countries is shown. The probable impact of the FTA on the automotive sector in the Russian Federation are considered separately.

Trade of the EAEU Countries in Agricultural Products: Trends, Conflicts, Factors

The article is devoted to the analysis of domestic and foreign trade of the Eurasian economic Union (EAEU) of agri-food products; identification and assessment of current trends, growth factors and imbalances in the light of efforts to create a unified agricultural policy of the member States of the Union. It is determined that Russia's successful implementation of the priority project «Export of agricultural products» contributed to the increase in grain exports to third countries in spite of the limited effective demand within the EAEU. The largest contribution to exports within the five countries, especially in terms of livestock products, makes Belarus with a significant negative balance of its trade in agricultural products with countries outside the Union. The free trade agreement with Vietnam stimulates export from Russia with mainly wheat, which strengthens its position as a source of agricultural raw materials without shifting the focus to products of deep processing. The relevance of the article is due to the fact that agriculture is officially recognized as a strategic industry, and food security is an integral part of the national security of the country. It is of interest to study the formation of a single agricultural market within the EAEU and the realities of foreign trade with third countries.

ПРОИЗВОДСТВО И ПОТРЕБЛЕНИЕ ПЛОДОВО-ЯГОДНОЙ ПРОДУКЦИИ В СТРАНАХ СНГ В УСЛОВИЯХ ГЛОБАЛИЗАЦИИ И РЕГИОНАЛЬНОЙ ИНТЕГРАЦИИ

The Commonwealth of Independent States (CIS) emerged in the early 90s in the post-Soviet space, and 12 former Soviet republics participated or were members of its activities. Currently, it includes Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan and Uzbekistan. Turkmenistan is an associate member, while Ukraine does not participate in the work of the Commonwealth. Given the contradictions within the CIS, some of the states were forced to develop integration processes within the Eurasian Economic Community (EurAsEC), and then the Eurasian Economic Union (EAEU). The largest size of the consumer market, both in terms of population, and the size of the economy and average per capita income among the countries participating in the CIS and the EAEU, belongs to Russia. It is also one of the world’s largest importers of fruits, berries and nuts. Based on the use of statistical data from the Food and Agriculture Organization of the United Nations, the physical volumes of production and consumption of fruit and berry products in the CIS countries in the period 1992-2018 were analyzed. A general trend was revealed for the CIS countries of a decrease in the production and consumption of fruits, berries and nuts in the 90s of the last century, followed by their growth in the first and second decades of the XXI century in almost all states, except for Georgia (by both indicators) and Moldova (by consumption). Prospects for improving the situation with both the production and consumption of fruit and berry products created in the EAEU countries, as well as an increase in the scale of mutual trade in fruits, berries and nuts as part of the Eurasian Economic Union, including other interested CIS states, depends, on the one hand, on stimulating the development of national fruit and berry subcomplexes, on the other hand, on the desire of the ruling elites to expand regional integration in the post-Soviet space.

Globalization and export flows between Eurasian Economic Union countries: a gravity model approach

In the empirical tools for the research of trade integration a special place is occupied by gravity models, insofar as these models have rather high accuracy in explaining mutual trade flows. Recently, however, the gravity model approach has been subjected to critical rethinking: globalization brought considerable changes not only in economic growth, but also in international trade, what allowed speaking about a “Death of Distance”. At the same time, estimates based on gravity models almost always demonstrated an increase in the coefficient of distance as a proxy for transport costs, which contradicts the general perception of the phenomenon of globalization. The paper is devoted to testing the validity of inclusion of the globalization index in the model, which would allow consider the role of globalization in bilateral cross-country trade, as well as testing the hypothesis of reducing the coefficient of distance. Based on the annual panel data over the period 2000-2016 the trade integration model for the EEU countries was estimated. To test the hypothesis of a decrease in the estimated coefficient of distance over time, the gravity model was also evaluated at different time intervals. And the positive impact of the globalization factor on the volume of exports is revealed.