The Eurasian
Intergovernmental Council considered a Report on macroeconomic situation in the
Eurasian Economic Union States and proposals for ensuring sustainable economic
development at its meeting held on February 5. The Eurasian Economic Commission
invited countries to drive innovation, develop financial systems and invest in
human capital to restore their economies.
According to the
report, the pandemic’s impact on the global economy was more significant than
expected due to the prolonged use of restrictive measures and lost
productivity.
According
to the results of 2020, the GDP growth rate of the EAEU will decrease by 3.9%,
and in 2021-2023 it is expected to grow by 3.2%, 3.1% and 2.5%, respectively,
because of recovery of internal and external demand.
According to the
Commission, it is required to drive innovation and introduce scientific
research results into production processes to restore the economy and enter the
path of sustainable economic development. In particular, the countries are
invited to support organizations that invest in manufacturing innovation and
encourage private investment in research.
The Commission
considers modern information technologies, biotechnologies (molecular biology,
genetic engineering and cell technologies), nanotechnologies, digital and laser
technologies, rocket and space industry, satellite and fiber-optic
communication systems and modern environmental technologies as key priority
areas of scientific and technological development.
As the document
reads, further development of the Union States’ financial systems will make a
positive contribution to the GDP dynamics. In particular, facilitating mutual
access to financial markets will be of great importance.
The report's authors
state that human capital becomes the key factor of competitiveness.
"The
State faces a number of tasks: reorienting the education system to new needs of
the future labor market, developing technologies for mass education of talents,
developing a system of supplementary education and changing qualifications for
adults, developing a health care system involving the public in preventive
medicine, providing social elevators and establishing a targeted social
assistance system".
Nowadays, the level
of government spending on human capital development in the EAEU States is kept
below the level of developed countries. Spending on education, health care and
culture amounts to about 15% of the GDP in most developed countries, while in
the EAEU it is only 8%.
"The
increase in inequality and poverty due to the pandemic will hinder economic
growth," the report notes. "The solution of problematic issues in the
social sphere (unemployment, low labor productivity and high poverty) as well
as the improvement of the education system and social infrastructure in the
Member States can significantly speed up economic development".
Special emphasis is
placed on forming a full-fledged system of financing investments in production
cooperation and creating value-added generation chains in the Union. The
document proposes specific steps and measures to set up the EAEU States’
development institutions and credit and financial structures for these
purposes.
The Report on the macroeconomic
situation is elaborated by the Commission on an annual basis. The issues of
boosting employment, providing social guarantees and developing human potential
have been included in the Report for the first time in accordance with
Paragraph 6.5.1 of the Strategic Directions for Developing the Eurasian
Economic Integration until 2025, approved at the meeting of the Supreme
Eurasian Economic Council on December 11, 2020.