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Foreign investment in Kyrgyzstan after its accession to EAEU more than doubled

Foreign investment in Kyrgyzstan after its accession to EAEU more than doubled

12/10/2015

On December 10 in Moscow, Ministers of the EEC talked about the features of integration in the Eurasian Economic Union (EAEU) and the role of business in its development at the business forum “Kyrgyz-Expo-2015.”

The business forum was attended by representatives of state authorities of the Kyrgyz Republic and the Russian Federation, non-governmental organizations, the business community of Kyrgyzstan and the Union countries. 

The Member of the Board - Minister of the EEC, Danil Ibrayev delivered a speech in which he noted the main aspects that facilitate Eurasian integration. “The EAEU has the potential for the development of each state,” the Minister said. “One of the main reasons behind the union of our countries is economic interest. The implementation of economic integration will undoubtedly have positive effects on the parties involved. For example, the development of integration processes significantly contributes to the expansion of trade turnover and cooperation in industrial relations.”

The EEC Minister stressed that the positive effect could be observed immediately, since the degree of economic integration of the member states varied. This corresponds to one of the key principles of the Union - the principle of “variable-speed integration,” which allows for the gradual adaptation to the single requirements. On the other hand, the economies of the EAEU themselves have features that allow them to find their areas of specialization yet maintain equal opportunities for access to each other's markets, and competition in all sectors.

Despite the short period of Kyrgyzstan's membership in the EAEU, both ordinary citizens and economic experts were already able to assess the first effects of integration.“The inflow of direct foreign investments to the country over the period of January-June 2015 when compared to January-June of 2014 increased 2.3 times and amounted to 498.5 million US dollars,” the EEC Minister noted.“The volume of foreign direct investments from the CIS countries when compared to January-June 2014 increased 2.8 times. In particular, investment from Russia increased 7.4 times.”

One of the most important aspects of integration is a favourable competitive environment. “The stronger we are internally, the more interesting we are for others. Our strength lies in the extent we can promote our products. This concerns innovation, investment, new technologies, other sectors - everything that we can offer each other and the world. In the production of petroleum products, the Eurasian Economic Union ranks 1st in the world, of gas - 2nd, for electric power resources we are in 4th place,” the EEC Minister said. According to Ibrayev, there is a need to establish the rules of a non-discriminatory approach to the level of prices of natural resources after the integration of the states. Upon acquiring a particular product, it is necessary to observe equal conditions for the entire Union.

According to the Member of the Board - Minister of the EEC Mukai Kadyrkulov, an important area of work regarding the accession progress of Kyrgyzstan to the EAEU is the improvement of equipping and the harmonisation of the customs checkpoints, and laboratories for veterinary, sanitary and phytosanitary measures to the standards of the Union. “In the first phase of the preparatory works, four customs checkpoints have been equipped,” the EEC Minister said.“The second stage foresees that by February 2016 a further seven customs checkpoints will be equipped.”

Mukai Kadyrkulov also recalled that in August at the session of the EEC, a decision was made to eliminate the sanitary and phytosanitary control at the Kazakh-Kyrgyz border. This allowed businesses to feel the first effects of the freedom of goods movement.

The Member of the Board - Minister of the EEC, Robert Arutyunyan, in turn, stressed the need for greater involvement of business in the process of rapprochement of the Union countries. Its representatives may pose questions to the governments of the participating countries and the EEC about removing of obstacles that hinder implementation of economic activities throughout the Union.

According to Robert Arutyunyan, in the current economic and political conditions, businesses of the EAEU countries should actively promote their products on the domestic market, in order to replace imported equivalents.“You have to evolve and improve, and thus offer consumers new solutions and products,” the EEC Minister confidently stated. “We, in turn, provide common standards and rules that are clear to business and help it to make better use of the positive factors of integration. We in the Commission believe that all the current challenges can only be overcome by working together, helping each other, sharing experience and knowledge. This is what our union is working towards.”