Economic Relations between Kazakhstan and Russia

Economic Relations between Kazakhstan and Russia

manifolds that for complete use of their powers does not suffice 20 mln

tons, brings additional profit.

The first stage of reconstruction of the algorithm manifold Atyrau -

Samara- its channel capacity now is realized is lifted up to 12 mln of

tons. Due to this the arrangement with Russia about magnifying of a transit

quota in 2000 also was reached.

For Kazakhstan the magnifying of a channel capacity of the algorithm

manifold Atyrau – Samara and export of oil through Russia opens the

perspective market of selling, what Europe is. On a system of oil pipelines

"«Friendship" the Kazakhstan oil can act in Germanium, Poland, Hungary,

Slovenia, Czechia and Slovakia, where there is a stable demand for oil.

Under the forecasts of the experts, by 2010 Central and East Europe will

import about 80 mln of tons of oil to one year. Now more than half of

volumes of imported oil in this region make delivering of the countries of

CIS, primarily - from Russia (51 %). Having expanded outbound opportunities

in this direction, Kazakhstan can become one of the largest suppliers of

raw material in the European countries.

By share efforts of Kazakhstan and Russia is put into operation

Caspian Pipeline Consortium (CPC). The common extent of the algorithm

manifold makes 1 580 km, primal channel capacity 28 mln ton / year. Thus

for reaching a maximum channel capacity 67 mln of tons of oil per one year

(from them 45 mln ton - for Kazakhstan oil supplier) it is necessary only

to augment opportunities of pump stations, that is recognized schedule to

carry out in four stages. There is a construction of the algorithm manifold

up to Atyrau, which will connect Karachiganak with CPC and will allow

originally pumping up to 7 mln of tons of oil, and in future - up to 11 mln

of tons.

During nearest of forty years CPC will be a stable source of the

incomes for the shareholders, and also Russia and Kazakhstan. According to

accounts, for a period of maintenance of the algorithm manifold in federal

and regional budgets of Russia will arrive approximately 23,3 billion of US

dollars as deductions and profit, of Kazakhstan will receive approximately

8,2 billion of dollars.

The development of transport cooperating with Russian Federation is

most actual for Kazakhstan’s for today within the framework of architecture

of regional and transcontinental transit.

Regional transit. Russian Federation is one of the basic countries of

shaping and assignment of transit weights; on its share it is necessary

about 26 % of shaping and 20 % of assignment of weights from total amount

of all transit transportations.

Transcontinental transit. In the whole transit streams in directions

Southeast and East Asia Europe are evaluated approximately in 330 - 400

billion of dollars. Thus up to 20 % of these streams can pass through

region of Russia and Kazakhstan.

Taking into account in the whole size commodity circulation, iron roads of

the Eurasian continent and primarily Kazakhstan and Russia have real

potential for partial stylus orientations transcontinental good traffic

with sea on railway routes.

For Kazakhstan in this direction of activity has a primary value a

development of transportations on Northern corridor Trans Asian of a

railway turnpike on a route “China - Kazakhstan - Russia – Byelorussia

Poland - Germany. Now Kazakhstan together with Russia Europe - Asia and

back carries on active operation on shaping this terrestrial transport

corridor by the message.

As a whole in transport-communication sphere before Kazakhstan the

following tasks stand:

• Saving conditions for transit of the Kazakhstan power resources through

region of Russia, maintenance at a necessary level of quotas on transit of

oil for Kazakhstan.

• Scheduled magnifying of a channel capacity CPC.

• Decision of accumulating questions between the Ministry of means of

communication of Russian Federation and CJSC of “Kazakhstan Temir Joli” on

railroad rates and other questions.

• Creation of the share enterprises in transport branch.

• Realization share transport - communication of the projects on active use

of transit potential of Kazakhstan and Russia.

2. ABOUT A CONDITION OF FOREIGN TRADE BOTH DEV’T OF THE JOINT /

ENTERPRISES KAZAKHSAN AND RUSSIA

Indexes of foreign trade of RK with RF, 1995-2001

| |1995 |1996 |1997 |1998 |1999 |2000 |2001 |

|Commodity | 4 | 4 | 4 | 3 | 2489,2 | 4227,6 | 4 639,3|

|circulation |265,5 |809,0 |257.2 |323.2 | | | |

|mln of US | | | | | | | |

|dollars | | | | | | | |

|In % to the | | 112,7 | 88,5 | 78,1 | 74,8 | 169,8 | 109,7 |

|appropriate | | | | | | | |

|period of the| | | | | | | |

|previous year| | | | | | | |

|Export, mln | 2 | 2484,4| 2 | 1 | 1 138,6| 1 769,1| 1 748,4|

|of US dollars|365,8 | |287,8 |611,4 | | | |

|In % to the | | 105 | 92,1 | 70,4 | 70,7 | 155,4 | 98,8 |

|appropriate | | | | | | | |

|period of the| | | | | | | |

|previous year| | | | | | | |

|Import, mln | 1 | 2 | 1 | 1 | 1 350,6| 2458,5 | 2 890,9|

|of US dollars|899.7 |324,6 |969,4 |711,8 | | | |

|In % to the | | 122,4 | 84,7 | 86,9 | 78,9 | 182 | 117,6 i|

|appropriate | | | | | | | |

|period of the| | | | | | | |

|previous year| | | | | | | |

|Balance, mln | 466,1| 159,8 | 318,4 | -100,4| -212 | -689,4 | -1 |

|of US dollars| | | | | | |142,5 |

|Specific | 45,1 | 42 | 35,2 | 29,6 | 19,8 | 19,4 | 20,2 |

|gravity of | | | | | | | |

|Russia in | | | | | | | |

|total amount | | | | | | | |

|of export | | | | | | | |

|from | | | | | | | |

|Kazakhstan, | | | | | | | |

|in % | | | | | | | |

|Specific | 49,9 | 54,8 | 45,8 | 39,4 | 36,7 | 48,7 | 45,4 |

|gravity of | | | | | | | |

|Russia in | | | | | | | |

|total amount | | | | | | | |

|of import in | | | | | | | |

|Kazakhstan, | | | | | | | |

|in % | | | | | | | |

Russian Federation of the valid historically folded processes of an

economic development is the basic trade partner of Kazakhstan and basic

consumer of Kazakhstan production. The specific gravity of Russian

Federation in volume of export in the countries of CIS annually makes not

less than 91-93 %.

In 1997 the reorientation on a development of the foreign trade links

with the countries of long-distance foreign countries began. In this

connection a -percent ratio in volumes of export between the countries of

Commonwealth essentially has varied. In 1997 there was cutting volumes of

foreign trade between Russia and Kazakhstan, per consequent years this

tendency continued to be magnified. On many goods occupying a powerful

share in export of Kazakhstan production in Russia, there was a significant

lowering of standard items.

In 2000 there was an essential heightening of volumes of export with

all countries - basic trade partners from among Commonwealth. The foreign

trade turnover of Kazakhstan with Russia in 2000 has approximated to a

level of 1997. The export has increased as contrasted to 1999 in 1,5 times,

the import has increased by 82 %. In 2001 as contrasted to 2000 of

delivering in Russian Federation practically have remained at a former

level (reduction by 1 %).

The share of Russia in total amount of export in 2001 has made 20,2 %

(in 2000 -19,4 %).

The greatest specific gravity in structure of export in Russian Federation

occupy:

Mineral products - 47,1 of % in 2001 (46,8 % in 2000): coal - 91 % of

export coal from Kazakhstan, oil and gaseous condensate - 12 %, ores and

concentrates iron, chrome, zinc -10,3 % (7,9 %); products of inorganic

chemistry junction, inorganic and organic precious and rarely of metals of

radioactive elements and isotopes 13 % (13,5 %): an oxide and hydracids of

aluminum - 90 % of all outbound delivering; ferrous metals - 8,2 % (6,3 %).

In import from Russian Federation predominate: mineral products,

machines and equipment.

In 2001 basic paper of import was: purchase of mineral fuel, oil and

petroleum - 21,4 % (more than 77 % from common import of fuel, from them

coke, diesel fuel, lubricant oils, electric power;the machines and

equipment - 16,3 %, metallurgical production -14,5 %, vehicles -13 %,

production chemical and industries, coupled to it,-12 %, plastic and work

piece from it -4 % were imported.

On October 1 2001 in Republic of Kazakhstan 740 share and foreign

enterprises created with participation of Russia (including 466 share and

274 foreign enterprises) with the authorized capital - 22,7 billion tenge

operated. The share of the foreign founder in the authorized capital has

made 1,3 billion tenge, or 5,94 %. From them 121 enterprises manufactured

production, 72 - realized deliverings on export, 182 - had import receipts

and 456 realized delivering on a home market. In 2000 in republic 461

enterprises, in 1999 - 325 operated.

The enterprises created together with the Russian partners, realize

the following aspects of activity: production of crude oil, mounting of the

process equipment, construction of civil engineering buildings, manufacture

of the electric power both electro distributive and monitoring equipment,

pharmaceutical products, copper, woolen and synthetic fabrics, flour,

processing and conservator of production, rendering of different aspects of

services and researches, maintenance and repair of automobiles, activity in

the field of a wireless and television.

2.1 Some aspects of economic interaction Kazakhstan and Russia

For adjustment and intensive development of mutually advantageous two-

sided ratios within the framework of CIS Republic of Kazakhstan and Russian

Federation have necessary objective premises. Russia and Kazakhstan make a

basis of huge Eurasian region, in which historically there were steady

geopolitical, economic, ethnic and cultural links of two countries and

peoples. In many vital spheres the national interests of two countries are

close or coincide, both countries hold on to course on saving of common

defensive, humanitarian and information space and the stability and

prosperity of two countries, further democratic of a society and success of

market transformations are equally interested in hardening safety.

The interaction of Kazakhstan with Russia is a priority in external

policy, external economic and military-strategic course of republic. A

complex of the reasons conditions and factors having not tactical, but

basic essence and long-time character stipulates it.

Today common balance of mutual relation between Kazakhstan and Russia

has positive character, as consider each other as the strategic partners

and it establishes the important premise for their mutual cooperating in

the field of policy, economy, science, engineering and other spheres.

Kazakhstan-Russian economic partnership belongs to the most advanced

regions of two-sided ratios between two states, as for this purpose both

countries have premises for rapprochement. It in many respects defines

character, both mutual relation, and other economic links, folding in the

European direction, of Kazakhstan.

On today there are favorable and unfavorable factors inherent in

Kazakhstan on a path to economic cooperating to Russia.

Alongside with the favorable factors of a development of two-sided economic

ratioes exist as well unfavorable or constraining moment. The overcoming of

economic barriers by means of restoring cooperation links will allow

introducing the operations in frameworks EAEU (Euro-Asian Economic Union).

2.2 The factors of economic interaction of Kazakhstan and Russia

Favorable

a) Presence in Kazakhstan of large mineral operational lives.

b) Transit potential and favorable geopolitical position of Kazakhstan at

the center of the Eurasian continent: on a crossroads of trade and

transport paths from Europe in Asia: through China on Far East ports,

Pacific Ocean of the state; through Iran and Turkey in the Mediterranean

pool.

c) Determination of Kazakhstan and Russia as basic trade partners on export

and import.

d) Retention of Kazakhstan in the majority large international

architectures UN, Architecture of Economic Cooperating, Economic union

Central Asian of the countries (together with Uzbekistan and Kyrgyzstan)

and Central-Asian Bank of Cooperating and Development (CABCD); Great five

Republic of Kazakhstan in frameworks of CIS (Russia, Kazakhstan, Belarus,

Kyrgyzstan, Tadjikistan).

e) The large region with the common boundary (more than 6.000 kms) with

Russia, that has for two countries a serious value in matter of hardening

of their national and collective safety.

f) The residing in republic of the large ethnic interlayer of the European

origin (Russian, Ukraine, Germany) is one of the factors of rapprochement

of Kazakhstan with the European civilization and culture.

Unfavorable

a) A close arrangement of Kazakhstan to the inconsistent states Central

Asian of region.

b) Support by Kazakhstan of multifactor policy in a ratio of transportation

of the Caspian oil.

c) The boundaries Central Asian of the states from a point of view of

international law properly not democratic of Republic of Kazakhstan;

Kazakhstan has appeared as a matter of fact cut off from Western Europe

d) Increase of ecological crisis, that weakens its positions in region and

world, narrows down opportunities of fast industrial growth.

e) Absence in Kazakhstan of a direct exit to World Ocean, exterior warm

seas, that hampers links with the largest centers of a modern civilization.

f) Support by the countries of trade wars (introduction of limitation on

import of the goods, policy of an ascertaining dumping in relation to the

exported goods, raw interdependence of the countries etc.).

In the beginning 1990s. It seemed, that the revived democratic states

within the framework of their new statuses would be and further dynamically

to explicate the ratios, filling their contents, adequate to a new

position. However it has not taken place and in basic for past years of two-

way communications were characterized defined inertia.

As displays the analysis, the policy of Russia in a ratio of the

states of Commonwealth for flowing out five years did not differ by a

sequence.

There was a natural process of comprehension of key national-state

interests attended by searching for new, as it seemed, more perspective

partners.

Certainly, the today's level of economic integration does not answer

necessities national economic of Republic of Kazakhstan and Russian

Federation. Available on it is necessary to evaluate the today facts of

economic interaction between two countries as insufficient and requiring in

serious adjusting. The priority of a development of the Kazakhstan-Russian

economic links is possible to support with existing numerous perspective

directions of a development, it:

. Trade-economic cooperating of Republic of Kazakhstan and Russian

Federation;

. Frontier cooperating Republic Of Kazakhstan and Russian Federation;

. Development of industrial-cooperation links in machine-building and

chemical complexes, by means of creation of share financial and

industrial groups;

. Cooperating and development fuel and energy of complexes of Russia and

Kazakhstan;

. Cooperating in sphere of transport;

. Cooperating of Kazakhstan and Russia in mastering vehicle launching of

Baikonur;

. Cooperating in mastering natural riches of the Caspian sea;

. Scientific - technological cooperating;

. Cooperating in the market of agricultural production.

The historically folded trade ratios of the countries of the Eurasian

region, including Russia and Kazakhstan from times “Silk road” - allow to

hope for success in a development of economic cooperating in modern

conditions.

At the same time it is necessary to mark the common tendencies,

natural for the new independent countries. The orientation to the market of

long-distance foreign countries makes production of raw in branches of the

countries rarely for them raw refined in branches, as last valid by

considerably lower, than world, efficiency of the manufacture can not

acquire production first on world or close to world prices. Stronger links

with the world market of branches of the states of Commonwealth inevitably

preclude with their demand for production domestic resource refinery of

branches by virtue of its non-competitiveness in the world market. It

inevitably reduces different branches to of an economic development

resource producers and resource refinery of branches in the countries of

CIS.

2.3 Engaging the foreign investments

The participation of the foreign capital promotes the decision of the

following tasks:

- Heightening of efficiency of an export potential, overcoming of its raw

directedness and development import substitute of manufactures;

- Heightening of a scientific and technical level of production with the

help new scientific of techniques, methods of management and selling of

production;

- Magnifying of tax receipts in the state budget;

- Assistance to a development backward and depressive of regions and

creation of new workstations in national economy;

- Use of modern industrial and administrative experience through tutoring

and retraining of the staff.

It is necessary to mark, that the cooperating of Kazakhstan and Russia

can explicate in different regions of economy. For power engineering and

mineral operational life’s priority directions are: the opportunity of an

effective shared use of mineral operational life’s, introduction new and

development of available processing manufactures oriented on export to long-

distance foreign countries, creation of a reliable system energy supply,

development of the transport communications, which development is

stipulated by presence of investment operational life’s.

Figure 1. Structure of the direct foreign investments in Kazakhstan in 2000

[pic]

In structure of the direct foreign investments in Kazakhstan the share

of Russian Federation makes 5 %. In spite of the fact that the Russian

economy requires not less to investment means, the enclosure of the

investments serves the factor of interest by Kazakhstan. The interests of

Russia consist, first of all, in natural operational life (oil, coal, ore

etc.), mastering and development.

2.4 Cooperating in the field of electric power industry

As other step which has strengthened a positions of power branch, it

is possible to name creation on the basis of bankrupt CJSC “Ekibastuz

Energy Center”, half of which shares the European Economic Community of

Russia on account of cancellation of duties of Kazakhstan for the electric

power was transferred to the Russian partners from the Russian Academy of

Science.

Since 2000 the integrated power Grid of Kazakhstan works in a parallel

condition from European Economic Community of Russia and grid system of the

countries of Central Asia.

The parallel operation of electric power systems has allowed

considerably to boost quality of electrical power and reliability of

electro supply of consumers of Kazakhstan, Central Asia and Russian

Federation, operatively to realize flow both transit of electrical power

and powers, it is more rational to use power powers of electrical stations.

The electric power system of Kazakhstan and Russian Academy of Science

European Economic Community of Russia is called secure each other in case

of crashes. It will ensure with the electric power not only Republic Of

Kazakhstan, but also Southern Ural.

With the purposes of a heightening of efficiency of a parallel

operation the measures on simplification of customs procedures are studied

at migration of electrical power through the customs boundary.

The operation coal extraction of the enterprises is stabilized. In

2002 the production 78 mln of tons coal is forecast, from which more than

25 mln of tons will be exported.

2.5 Cooperating in the field of machine construction industry

The lowering of manufacture in machine construction industry and

metalworking is called by aggravation of a financial condition of basic

consumers of machine-building production, significant rise in price of

import furnishing work pieces.

The cooperating of Russia and Kazakhstan in machine construction

industry is possible at the expense of a shared use of available industrial

potential for issue of competitive production. On basis Kentau excavator

factory assembly manufacture of dredges together with joint-stock company

Tver excavator a factory and joint-stock company Sarex. On Pavlodar

tractor together with joint-stock company the “Altay” motor factory.

Barnaul and Sibzavod (Omsk) it is planned to adjust manufacture of new

tractors, and the enterprises agricultural machinary of Kazakhstan together

with Rostelmash can master assembly manufacture a grain and of combines.

Besides in machine building branch the creation JV on manufacture of

diesel drives (planned on the basis of joint-stock company the “Kustanay”

diesel factory and joint-stock company “Hurrah Laz”) and Transnational of

financial and industrial group “Electropribor”.

2.6 Cooperating in the field of a uranium industry

Annually Kazakhstan extracts and sells about 3 % (1,5 thousand tons)

from it Whole World of production. Production of the National company

“Казатомпром” consumes Russia, USA, Western Europe, Southern Korea and

other countries.

The company “Казатомпром” combines investigation, production and

manufacture of uranium, and also accompanying rarely of elements. Into its

structure go into: joint-stock company “Volkovgoelogy” one of highly

professional in all CIS of the geological enterprises, joint-stock company

“Stepgeology”. Three ore management “Central”, “Steppe”, “Sixth”.

The basic manufacturer of uranium fuel in Kazakhstan - Ulbinski a

metal works. This versatile enterprise specializing on issue rarely metal

and super conducting production, and also special material, used in an

atomic industry, electron technology, instrument making, space engineering.

The raw material - enriched uranium - is made in Kazakhstan or is delivered

from Siberia, on Ulba make of it tablets and deliver them on the Russian

factories, where make ready heat distributor of assembly for atomic power

plants. Ulbinski the metal works occupies the important place in a nuclear-

fuel cycle of Russia and Kazakhstan.

In the near past the nuclear -fuel complex of Russia and Kazakhstan

made a single unit. To tear this line-up was it does not pay Russians,

Kazakhstan.

Last years the Kazakhstan raw material in basic went on export, and

the fuel tablets on Ulbinski factory were manufactured from the Russian raw

material. Besides is acute there was a problem solvency. Russia paid for

services by the consumer goods. An exit from the folded situation became

the offer of the Kazakhstan side to the partners from Russian "«fuel

element" of start-up of a new uranium line-up. As a result of the

enterprise deliver each other necessary components, in particular from

Kazakhstan in Russia - fuel tablets. The financial accounts between the

countries are made at the end of a line-up in accordance with sale of

products higher remake in the exterior market.

Within the framework of this cooperating, with the purposes of an

ascertaining of the greater confidence the National company “Kazatomprom”,

releases the gold share, which is transferred and gives it the right to

superimpose the veto on such decisions of Kazakhstan,

As, for example, refusal to work in one nuclear-fuel cycle to not

produce fuel tablets for Russian Atomic Electric Station or other

irrational variations in the strategy and tactics of behavior in the

market. In turn, Russia has given us assurances of a reliability and long

term of the orders. It concerns uranium, but also tantalum raw material,

beryllium etc. Durability of strategic interests of the sides by the plans

on interchanging the shares Ulbinski factory on the similar shares of the

enterprises of a nuclear -fuel cycle of Russia.

In October, 2000 the long-term contract for manufacture CJSC Ulbinski

factory of dusts of uranium and fuel tablets for AES with their further

annual delivering in Russian Federation up to 200 т of a dust and 300 т of

tablets, on a period till 2005 inclusively is made.

Besides the arrangement on creation of the share enterprise on production

of uranium on deposits “Zarechni and “Budenovski” in Southern Kazakhstan is

reached.

Considering problems of integration of Russia and Kazakhstan, it is

possible to conclude, that the activation of economic links between the

countries directly depends on the decision of legal, political, economic

and ecological problems precluding their more effective activity. The

opportunities by wider attract in a long-term perspective appreciably

depend on those political courses, which will be selected by both

countries. According to our reckoning, the creation of the common market of

Kazakhstan and Russia will allow to support steady solvency demand for

production of real sectors of economy of the countries on the basis of the

long-term target and selective contracts.

Thus, the necessity of effective economic interaction between the

countries stipulates necessity of the further decision of existing problems

and uses of every possible redundancy of premises of rise of manufacture.

3. involvement in international organizations, kazakhstan and russia

For anybody not a secret, that creation and the operation of regional

systems of safety in Central Asia was called by the following basic

reasons:

First, inability of the states becoming in plants of aggressive plans

of the international terrorist architectures, appearing under Islamic by

the slogans and using financial support international extremism of

architectures to give them effective defense;

Secondly, double standards of the conducting countries of West,

including USA, Great Britain, in a ratio of operations of a series of

terrorist architectures considered by them as battle groups national fight

for freedom of driving. By characteristic development of double standards

was, for example, the refusal of the American authorities to satisfy the

request Ministry of Foreign Affairs Peoples Republic Of China about output

gripped in captivities in Afghanistan of hits - citizens of Peoples

Republic of China Uygur of a nationality. A motivation: the Washington does

not consider Driving for independence East Turkestan as terrorist

architecture;

Thirdly, the anti Soviet moods, cultivated in West by decades, in a

defined measure were transformed in anti Russian, especially to first half

90 years. Therefore warnings of Russia, states of Central Asia, closely

face with operations of the international terrorist gangs in Chechnya, in

Batken, about real consequences of their activity were not heard.

It would be possible to explain creation of military-aerial basses of

USA in Afghanistan, Kyrgyzstan, Tadjikistan, Uzbekistan still by war

against a condition taliban. But there is a question, why these basses

began to be established as a matter of fact after completion of an active

military phase of rout taliban of a condition. Moreover, arranging of

basses air force of USA not only in Afghanistan, but also in Kyrgyzstan,

and also Tajikistan bordering with China, on defined reflections. In

particular, involuntarily there is an idea: whether can these basses

hypothetically and in a defined situation to be used as basis of a dual

purpose - not only against hits in Afghanistan, but also against China or

even against Russia.

After September 11 and especially after an overthrow reactionary

taliban of a condition in Afghanistan and ascertaining of the American

military presence in Central Asia basic; in essence there is a

consideration of an opportunity of cooperating of these architectures from

USA, for, without the account of policy of Russia, China and USA and

understanding of principles of a guard by these states of the national

interests, it is impossible to explain a situation in sphere of a safety in

region.

Whether such script of a development of events in next China is

necessary to Kazakhstan and other countries of region.

Uniquely - is not present. The consequences of disorder USSR, as is

known, have done without in tens thousand life and millions refugees.

The important element of regional cooperating is the effective

military-engineering cooperating between the countries by the members DKNB.

Today any country of Central Asia is not capable in the nearest perspective

to refuse from former Soviet, so, present Russian weapon and military

engineering. Hence, the key role of Russia in this direction will be saved.

The important element of regional cooperating is the effective

military-engineering cooperating between the countries - members DKNB Today

any country of Central Asia is not capable in the nearest perspective to

refuse from former Soviet, so, presents Russian weapon and military

engineering. Hence, the key role of Russia in this direction will be saved.

Though other points of view take place also:

a) In opinion of the Uzbek experts, principal reason of an exit of

Tashkent from DKNB was ostensibly refusal of the Russian side to sell to

Uzbekistan necessary arms and military engineering, when the country has

exposed to attacks of gangs of the international terrorists.

In these conditions of Uzbekistan forced to convert to active cooperating

from USA;

b) In mass - media the hearings, on the one hand, are persistently

spreader that Russia ostensibly is not interested in maintenance vehicle

launching of Baikonur, recognizing schedule to transfer all rocket start-

ups on vehicle launching or to realize start-ups from tropics, and with

another - that vehicle launching of Baikonur to Kazakhstan anything, except

for harm, does not bring.

Tragedy of September 11 and military action, which has followed behind

it, of USA in Afghanistan by a radical image, have changed a situation in

our region. In this connection experts of Kazakhstan Contract, being the

member, of collective safety, expected, that the states the members DKNB

will consult among themselves on all questions of the international safety,

including regional, but, unfortunately, such has not taken place also it

once again speaks that one of the reasons of an inefficiency DKNB is an

existing level of ratios between Russia and other sides of the Contract. On

my sight, on the one hand, Russia till now is not ready to equal in rights

partner to ratios with the new independent states, and, with another - in

the countries FSU of space the suspiciousness and uncertainty is still

saved in what policy Russia will realize further.

Therefore, on my sight, the special urgency is acquired now by

necessity of amplification of mutual confidence, openness, knowledge, first

of all, between Kazakhstan and Russia having on FSU space the special level

of ratios and the best premises for creation of allied ratios.

Thus, at folding geopolitical the structure of regional systems of

safety is necessary different level. In particular, Kazakhstan and Russia

should not wait of operations on the part of other countries of region, by

a phantom of the dollar help, and actively be shaded slide on a path not

only economic integration in frameworks EAEU (Euro-Asian Economic Union),

but also development of systems of safety in frameworks DKNB.

Similar situation in a ratio of cooperating with China within the

framework of the Shanghai architecture of cooperating in a direction of

struggle with terrorism, extremism and separatism

Appearing on January 25 this year at the extended meeting of the principals

of the executive authority Republic Of Kazakhstan, the President

N.Nazarbayev has formulated seven tasks facing to government, including in

the field of exterior policy.

January 25, 2002 in Almaty the third session Integration of committee

EAEU (Euro-Asian Economic Union) has passed, on which 28 questions were

considered, from which on 27 the decision is accepted. The totals of

operation of this session, unfortunately, have appeared unfavorable:

a) The participants still were not defined, in what direction it is

necessary to explicate cooperating;

b) Each participant wants first of all to defend the interests, instead

of interests of the partners. Therefore, in particular, customs duties

till now are not strip-chart unified to establish a condition of

preference for mutual trade;

c) The countries EAEU (Euro-Asian Economic Union) tend in WTO, supposing

already others, and very rigid, condition, not having matched the

positions.

Nevertheless of Kazakhstan appears for a development EAEU (Euro-Asian

Economic Union), and also others (organization structures with

participation of Russia, as such policy in finished the score answers

interests without dangerous of our country.

3.1 The Eurasian Union: Realities and Perspectives

For five years already Kazakhstan, Russia, and other post-Soviet

states, most of which are united in the Commonwealth of Independent States,

have developed in the situation of a new political reality as equal agents

of the world order. But the process of the formation of new independent

states and open democratic social systems has just begun.

Without going into detailed critique of the CIS, let us note that all

its activities and all the bilateral and multilateral efforts of its member

states clearly show that the time has come for a more effective, deep, and

diverse integration of the countries involved - the kind of integration

that would achieve a stabilization of the situation in the economy and

ensure its development on a qualitatively new basis. This applies above all

to the economies of Kazakhstan and Russia, which might become the engines

of future integrative processes in the post-Soviet space. There are also

quite a few issues pertaining to cooperation in the military-political,

scientific-technological, humanitarian, and other spheres, which are

awaiting their solution in the framework of a more effective integration

model. The idea of the formation of the Eurasian union of states proposed

by President Nazarbayev is precisely such a model; it organically combines

both the existing realities and the objective needs of today and tomorrow.

Taking into account the differences between our countries in the

levels of development of market economy, in the democratization of

political processes, we propose to establish an additional integrative

structure, the Eurasian Union, whose activities would be combined with

those of the CIS. In doing so, the member states will take into account the

diversity of integration scenarios and differences in the rate, form, and

direction of CIS states’ development. Thus there is an urgent need for the

formation of a new economic order in the CIS.

It can thus be said that the draft project for the formation of the EAU is

in keeping with the natural aspirations of the peoples living in the post-

Soviet space, the idea of new integration. The project has not only

acquired a great many supporters but has also proved that it is realistic,

urgent, and vital.

Turning to the genesis of that integrative idea, it must be recalled

that the Kazakhstan leader advocated the preservation of good relations and

re-integration on a new basis of the former Soviet republics from the very

first days of the new states acquiring independence. President Nazarbayev

stressed repeatedly that he never raised the idea of independence to the

status of a fetish but rather endeavored to preserve old ties and create

new ones. The idea of the Eurasian Union originates in the midst of life,

in the simple and universal human needs.

From that moment, the debate on the idea of the EAU assumed a new

tone. It accelerated the political crystallization on the choice between

further disintegration and re-integration on a new basis.

Many participants in the hearings stated that the EAU project offers a

chance for entering the 21st century in a civilized manner, and that it

reflects the objective logic of development of the post-Soviet space and

the consciously realized objective need for the development of integration

processes.

In this way the initiative of forming the Eurasian Union was gaining

momentum. The number of its adherents increased at scholarly events, in

government offices, and in the diplomatic circles. An understanding and

sincere approval of the EAU project was expressed, among others.

The proposals contained in the EAU project - to introduce unified visa

procedures, to guarantee the freedom of movement, to make the ruble the

settlement unit, to create a unified system of defense, parliament,

legislation, and an executive committee as an interstate organ - were at

first guardedly received by some public figures. However, the numbers of

adherents of integration are growing. Clearly, their approaches to the

problem differ, but their desire for integration remains strong.

On the question of the main principles of the EAU project, it must be

stressed that the EAU is a union of equal, independent states aimed at the

realization of the national interests of each member state and of the

available integration potential. The EAU is a form of integration of

sovereign states with the aim of consolidating stability and security and

socioeconomic modernization in the post-Soviet space. Economic interests

determine the foundations of the rapprochement among the independent

states. The political institutions of the EAU must adequately reflect these

interests and facilitate economic integration.

The following principles and mechanism of formation of the Eurasian

Union are proposed:

— National referendums or decisions of parliaments on the entry of

states in the EAU;

— The signing by member states of a treaty on the setting up of the EAU

on the basis of the principles of equality, noninterference in the affairs

of each other, respect for sovereignty, territorial integrity and

inviolability of state borders. The treaty must lay the legal and

organizational foundations for deeper integration, with the formation of an

economic, currency, and political union as its goal;

— No associated membership is permitted in the EAU;

— Decisions are carried in the EAU by the qualified majority of four-fifths

(4/5) of the overall number of member countries.

Independent states join the EAU, if the following preliminary

conditions are satisfied:

— Mandatory compliance with endorsed inter-state agreements;

— Mutual recognition of the existing political institutions of the EAU

member countries;

— Recognition of territorial integrity and inviolability of the

borders;

— Rejection of economic, political, and other forms of pressure in

inter-state relations;

— Cessation of hostilities among member countries.

New members enter the EAU after an expert evaluation is passed on

their readiness to enter the EAU and all EAU members vote unanimously on

it. An organ formed on parity terms by the states, which expressed their

readiness to become EAU members, proposes expert evaluations.

EAU states may take part in other integrative alliances, including the CIS,

on the basis of associated or permanent membership or in the role of an

observer.

Every member can leave the EAU, giving notice not later than six

months before the decision is made.

It is suggested to form the following supranational bodies:

— The Council of EAU Heads of State and Heads of Government - the

highest organ of EAU political leadership. Each member state chairs the EAU

for a period of six months in rotation according to the Cyrillic alphabet.

— The highest consultative and advisory body is the EAU Parliament. The

Parliament is formed by delegating deputies of the member states'

parliaments on the basis of equal representation of each member country or

through direct elections. Decisions of the EAU Parliament come into force

after their ratification by the parliaments of the EAU states. Ratification

must be effected within the period of one month.

— The main area of the activity of the EAU Parliament is coordination

of the member countries' legislation to insure the development of a unified

economic space, protection of the social rights and interests of

individuals and of mutual respect for state sovereignty and civil rights

within EAU states.

— The EAU Parliament creates a common legal basis to regulate the relations

between the member countries' economic agents.

— The Council of EAU Foreign Ministers, to coordinate the member countries'

foreign-policy activities.

— The Inter-state Executive Committee of the EAU - an executive and

supervisory body functioning on a permanent basis. The EAU heads of state

appoints the head of the Executive Committee -a representative of the

member countries — for a period defined by the heads. The Executive

Committee's bodies are formed to include representatives of all the

countries.

The EAU as represented by its Executive Committee must receive observer

status in a number of major international organizations, such as:

— The EAU Executive Committee's Information Bureau. The member countries

must assume a special obligation or law not to permit unfriendly statements

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