Head of EDB: Integration agreements open wide opportunities but they need to be implemented

Almaty, 24 May 2012. Integration is not a computer algorithm that automatically results in success. Integration agreements open wide opportunities but they need to be implemented. Igor Finogenov, Chairman of the Eurasian Development Bank’s (EDB) Executive Board, said this today at the session Opportunities and Challenges of Economic Integration of the 5th Astana Economic Forum.

According to a comprehensive assessment undertaken by the EDB Centre for Integration Studies in cooperation with Russian and Ukrainian researchers, the total cumulative effect from the creation of the Common Economic Space (CES) and Ukraine’s subsequent joining it can reach US $1 trillion for the four countries before 2030. This effect will produce an additional growth in Belarusian GDP of 14%, Ukrainian GDP of 6%, Kazakh GDP of 3.5%, and Russian GDP of 2%. Belarus, Ukraine and Kazakhstan are expected to benefit from integration to the greatest extent in terms of per capita effects and Russia in absolute terms.

«However this bonus needs to be earned,» the Head of EDB emphasised. «Economic integration does not result in automatic success. If projects are only declared on paper they will have no economic effect. This is a question of political will, patience and certain courage.»

«„Quick“ effects from the removal of customs barriers are rather insignificant and the main effect can be expected only in the long term, within the framework of specific initiatives and projects in high-tech sectors backed by positive changes in capital and labour markets and the formation of large transnational holdings that aspire for global leadership in their sectors,» Igor Finogenov added.

According to the Head of EDB, the maximum effect from integration should be expected in high-tech industries. «That said, industrial cooperation in the aviation, shipbuilding, space, nuclear, power and mechanical engineering sectors is based on both „Soviet“ ties and the relationships that are being built now within the framework of the Customs Union and the CES,» he said.

Additional Information

The Eurasian Development Bank is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth and the expansion of mutual trade and other economic ties in its member states. EDB’s charter capital exceeds US $1.5 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. Read more at https://www.eabr.org.