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Eurasian Integration Yearbook 2010
Annual publication of the Eurasian Development Bank


65.9 (2) 8 91 Eurasian Integration Yearbook 2010. ­ Almaty, 2010. ­ p. 368 ISBN 978-601-7151-07-2 Annual publication of the Eurasian Development Bank

The Eurasian Development Bank is an international financial institution established to promote economic growth and integration processes in Eurasia. The Bank was founded by the intergovernmental agreement signed in January 2006 by the Russian Federation and the Republic of Kazakhstan. In April 2009 Armenia has completed all the admission procedures and became the third full member of the Bank. Next, in June 2009 Tajikistan joined the Bank. The Agreement on Establishing the Eurasian Development Bank has come into force for Belarus, it is in the process of finalising the required admission procedures. Electric power, water and energy, transportation infrastructure and hightech and innovative industries are the key areas for Bank's financing activity. As part of its mission the Bank carries out extensive research and analysis of contemporary development issues and trends in the region, with particular focus on Eurasian integration. The Bank also hosts regular conferences and round tables addressing various aspects of integration. In 2008, the Bank launched an annual EDB Eurasian Integration Yearbook (in English) and quarterly Journal of Eurasian Economic Integration (in Russian). Both publications are available online at www.eabr.org. The Bank's Strategy and Research Department publishes detailed Industry and Country Analytical Reports and plans to undertake a number of research projects. The EDB System of Indicators of Eurasian Integration has become the first project in the pipeline.

ISBN 978-601-7151-07-2

65.9 (2) 8 © Eurasian Development Bank, 2010

Address: Dostyk av., 220, Almaty, 050051, Republic of Kazakhstan, Telephone +7 (727) 244 40 44, ext. 6146 Fax +7 (727) 244 65 70, 291 42 63 E-mail: editor@eabr.org http://www.eabr.org Coordinator: Gulnaz Imamniyazova, EDB Design, layout, and printing: RUAN Publishing Company The EDB's special acknowledgements go to Stanislav Myong, Ekaterina Kopylova, Hannah Dyson and Jonathan Elliot for translating and editing materials for the Yearbook.
No part of this publication may be reprinted or reproduced or utilised in any form, including reprinting and recording of any kind, without due reference to this publication. The views expressed in this publication are those of author and do not necessarily reflect the views of the Eurasian Development Bank.


Eurasian Integration Yearbook 2010
Annual publication of the Eurasian Development Bank

Edited by Evgeny Vinokurov, EDB Advisory Council: Sailau Baizakov, Insitute for Economic Research, Astana Michael Emerson, Centre for European Policy Studies, Brussels Valery Geets, Institute for Economic Forecasting, Kyiv Ruslan Grinberg, Insitute of Economy RAS, Moscow Ivan Korolev, Institute for World Economy and International Relations RAS, Moscow Luk Van Langenhove, United Nations University, Bruges Johannes Linn, Brookings Institute, Washington Liu Huaqin, Chinese Academy of International Trade and Economic Cooperation, Beijing Katlijn Malfliet, Catholic University of Leuven Ivan Samson, University of Grenoble II Leonid Vardomskiy, Institute of Economy RAS, Moscow Vladimir Yasinskiy, EDB, Almaty


Contents

Contents

List of Figures and Tables Notes on the Contributors List of Abbreviations

6 11 15

Greetings
Igor Finogenov, EDB Chairman Sergei Glazyev, EurAsEC Deputy General Secretary Vladimir Yasinskiy, EDB Head of Strategy and Research 17 18 19

Introduction
1. Accelerating Regional Integration: Directions for Research EvgEny vinokurov 20

2009: Data and Events
2. Chronicle of Eurasian Regional Integration 2009 natalia MaqsiMchook 3. Main Macroeconomic Indicators of the CIS Region yErzhan MoldabEkov 4. International and Regional Development Banks in Northern and Central Eurasia: Overview of Activities in 2009 zhanar sagiMbayEva 28 97

110

Regional Integration and Regionalisation
5. EDB System of Indicators of Eurasian Integration: General Findings EvgEny vinokurov, alExandEr libMan 6. Effect of External Shocks on CIS Economies during Crisis of 2007­2009: Global and Regional Aspects Mikhail golovnin, darya ushkalova, alEksandra yakushEva

136

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EDB Eurasian Integration Yearbook 2010


Contents

7. Emerging Regional Configuration in Central Asia: Remaining Traces of Unipolarity, Unstable Multipolarity and other Alternatives yang chEng 8. From Central Asian regional integration to Eurasian integration space? ­ Changing dynamics of post-Soviet regionalism ikboljon qoraboyEv

175

206

Financial Integration and Common Currency
9. Rouble as Payment Currency of CIS MarsEl salikhov, sErgEy agibalov 10. Integration of Financial Markets and Interaction Between Stock Exchanges of the CIS Member States victoria Mishina 233

243

Sectors and Issues
11. Economic Cooperation in Agricultural Sector of CIS Countries. EDB Report no. 7 262 Murat jadraliyEv 12. Impact of Climate Change on Water Resources in Central Asia. EDB Report no. 6 293 sagit ibatullin, vladiMir yasinskiy, alExandEr MironEnkov 13. Ecological Efficiency of Russian and Kazakh Businesses: a Comparative Analysis 331 alEksandr Martynov Information for authors Index 356 358

Eurasian Development Bank




List of Figures and Tables

List of Figures and Tables
Figures
Figure .1. Composition of SIEI Figure .2. Consolidated indices of integration of post-Soviet countries with CIS-12 Figure .3. Consolidated indices of integration of five groups of countries within the post-Soviet space Figure .. Dynamics of trade integration in the five regions Figure .. Dynamics of labour migration integration Figure .. Dynamics of energy integration Figure .7. Dynamics of agriculture integration Figure .8. Dynamics of education integration Figure .9. Dynamics of macroeconomic convergence Figure .10. Dynamics of monetary policy convergence Figure .1. Real GDP dynamics in CIS in 2007­2009 Figure .2. Industrial production in CIS in 2007­2009 Figure 9.1. Share of total export and import trade payments transacted in roubles between Russia and other EurAsEC countries in 2008 Figure 9.2. Trade balance of Russia and other CIS countries in 2008 Figure 10.1. Currency structure of Belarus' proceeds from exports in 2009 Figure 10.2. CIS member states' service sector exports and imports classified under "travel" Figure 10.3. Structure of cash exports by Belarusian banks in 2009 Figure 10.. Structure of spot currency market in Kazakhstan in 2008 Figure 10.. Structure of spot currency market in Ukraine in 2008 Figure 11.1. Structure of investments in Kazakhstan agribusiness in 2008 138 142 143 145 146 146 147 148 150 150 158 159

239 240

244 246 248 248 249

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List of Figures and Tables

Figure 11.2. Structure of Russian investment in Ukraine Figure 11.3. Structure of foreign investment in agriculture, forestry, and fishing in Kazakhstan Figure 11.. Dynamics of imports of meat to Belarus, Kazakhstan, Russia and Ukraine Figure 11.. Dynamics of agriculture integration in five post-Soviet groupings Figure 11.. Trade in cereals between CIS countries in 2008 Figure 12.1. Average pace of increase in maximum and minimum air temperatures in Uzbekistan since 191 Figure 12.2. Changes in annual precipitation in Uzbekistan Figure 12.3. Changes in annual precipitation in Tajikistan in 190­200 Figure 12.. Changes in precipitation by season in Tajikistan in 190­200 Figure 12.. Average multiannual changes in precipitation in Turkmenistan (solid line) and linear trend in 1931­199 Figure 12.. River runoff in a medium-water-content year and a share contributed by glaciers Figure 12.7. Changes in volume of glaciers in Tajikistan Figure 12.8. Atmospheric concentration of 2 in 1000­2000 Figure 13.1. Energy efficiency dynamics of small businesses Figure 13.2. Energy efficiency dynamics of small and medium businesses Figure 13.3. Ecological efficiency dynamics of Russian businesses Figure 13.. Ecological efficiency dynamics of Kazakh businesses Figure 13.. Technology efficiency dynamics of Russian businesses Figure 13.. Technology efficiency dynamics of Kazakh businesses Figure 13.7. Energy efficiency dynamics in some industries in Russia Figure 13.8. Energy efficiency dynamics in some industries in Kazakhstan Figure 13.9. Ecological efficiency dynamics in some industries in Russia Figure 13.10. Ecological efficiency dynamics in some industries in Kazakhstan Figure 13.11. Technology efficiency dynamics in some industries in Russia Figure 13.12. Technology efficiency dynamics in some industries in Kazakhstan

270 271 277 280 281

303 304 304 305 306 307 308 312 337 337 338 338 340 340 342 342 342 342 345 345

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List of Figures and Tables

Figure Figure Figure Figure Figure power Figure Figure Figure Figure power Figure Figure Figure

13.13. Efficiency dynamics by power generation type 13.1. Energy efficiency dynamics by resource type 13.1. Energy efficiency dynamics of basic processing 13.1. Energy efficiency dynamics in infrastructure 13.17. Ecological efficiency dynamics by generation type 13.18. Ecological efficiency dynamics by resource type 13.19. Ecological efficiency dynamics of basic processing 13.20. Ecological efficiency dynamics in infrastructure 13.21. Technology efficiency dynamics by generation type 13.22. Technology efficiency dynamics by resource type 13.23. Technology efficiency dynamics of basic processing 13.2. Technology efficiency dynamics in infrastructure

345 345 346 346 346 346 347 347 347 347 354 354

Tables
Table Table Table Table Table Table Table Table Table Table Table Table 3.1. Main macroeconomic indicators: Azerbaijan 3.2. Main macroeconomic indicators: Armenia 3.3. Main macroeconomic indicators: Belarus 3.. Main macroeconomic indicators: Georgia 3.. Main macroeconomic indicators: Kazakhstan 3.. Main macroeconomic indicators: Kyrgyzstan 3.7. Main macroeconomic indicators: Moldova 3.8. Main macroeconomic indicators: Russia 3.9. Main macroeconomic indicators: Tajikistan 3.10. Main macroeconomic indicators: Turkmenistan 3.11. Main macroeconomic indicators: Uzbekistan 3.12. Main macroeconomic indicators: Ukraine 98 99 100 101 102 103 104 105 106 107 108 109 112 127 140 144 149 157 158 160

Table .1. WBG Commitments in ECA region Table .2. Approved IFI Funding in 2009 Table .1. Structure of SIEI Table .2. Dynamics of integration of markets in post-Soviet space Table .3. Dynamics of convergence of post-Soviet economies Table .1. Foreign investments in CIS countries Table .2. Growth of exports and imports in CIS countries Table .3. Trade with CIS and other countries as a proportion of total foreign trade turnover of individual CIS countries

8

EDB Eurasian Integration Yearbook 2010


List of Figures and Tables

Table .. Trade with other CIS countries as a proportion of total foreign trade turnover of individual CIS countries Table .. Exports to other CIS countries as a proportion of total exports by individual CIS countries Table .. Imports from other CIS countries as a proportion of total imports into individual CIS countries Table .7. Increases in exports to CIS and world markets, Q 2008 ­ Q1 2009 Table .8. Commodity structure of CIS countries' export to other CIS countries and non-CIS markets in 2008 Table .9. Balance of payments between Russia and other CIS countries Table .10. Increase in current transfers Table 7.1. Central Asian countries 2000­2008 Foreign Trade Statistics Table 7.2. Trade between China, Russia, United States and Central Asian countries 2001­2008 Table 7.3. China's trade with Central Asian countries from 2003 to 2007 Table 7.. Russian investment in Central Asia Table 7.. 2003­2007 Flow of China's non-financial direct investment in Central Asia Table 7.. 1992­2008 United States Aid to Central Asia Table 7.7. Russian military presence in Central Asia Table 7.8. Number of students coming from Central Asia who attended Russian State and Municipal colleges and universities Table 7.9. Participants in Central Asia International Exchange and Training Programmes sponsored by the U.S. Government Table 7.10. Number of Migrants to Russia from Central Asia (2000­2008) Table 7.11. Labour migrant remittances of Central Asia (2007­2008) Table 9.1. Countries oriented towards trading with Russia Table 9.2. Cash flows servicing trade between Russia and other EurAsEC countries in 2008 Table 10.1. EurAsEC member state payment structure Table 10.2. Money transfers from EurAsEC member states by currency in 2008 Table 10.3. Development of EurAsEC member states' financial systems

161 161 162 163 166 167 170

181 182 182 183 184 185 188 190 192 194 195 236 238 245 247 250

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List of Figures and Tables

Table 10.. General characteristics of the CIS stock markets Table 10.. Average daily amount of CIS currency operations on the Russian market Table 10.. Exchange rate fluctuations between Russian roubles, US dollars and Euros and official rates of CIS currencies Table 10.7. Trade executed in foreign currency on Belarusian currency and stock exchange Table 10.8. Trade executed in foreign currency on Kazakhstan Stock Exchange Table 10.9. Volume of trade in CIS currencies on MICEX Table 11.1. Share of agribusiness in GDP in some CIS countries Table 11.2. Assessments of FDI in agriculture, forestry, fishery and food industry Table 11.3. Sources of investments in privately and publicly owned fixed assets in agriculture in Kazakhstan Table 11.. Import of cereals from CIS countries in 2008 according to importer country's statistics Table 11.. Mutual trade in cereals in CIS Table 12.1. Decrease in glacier and total runoff after warming by +200 and depending on share of glaciers in river feeding Table 13.1. Indices taken as 100% in efficiency calculations Table 13.2. Energy efficiency of production and its dynamics in businesses of different sizes Table 13.3. Ecological efficiency of production and its dynamics in businesses of different sizes Table 13.. Technology efficiency of production and its dynamics in businesses of different sizes Table 13.. Energy efficiency of production and its dynamics in different industries Table 13.. Ecological efficiency of production and its dynamics Table 13.7. Technology efficiency of production and its dynamics Table 13.8. Energy efficiency of production and its dynamics in businesses engaging in different types of activity Table 13.9. Ecological efficiency of production and its dynamics Table 13.10. Technology efficiency of production and its dynamics

251 252 254 256 256 257 264 266 267 276 282

316 333 336 337 338 339 343 344 348 350 352

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EDB Eurasian Integration Yearbook 2010


Notes on the Contributors

Notes on the Contributors

Sergei Agibalov ­ he has been working for the Institute of Energy & Finance since July 2006. He has expertise in CIS macroeconomics, energy ef ficiency, energy and climate change, and foreign trade. Before joining the Institute, Sergey participated in studies of gas hydrates at the Moscow State University's UNESCO Centre on Marine Geology and Geophysics, and later worked for DEKO Geofizika (oil industry services). Sergey graduated from the Geology Faculty of the Lomonosov Moscow State University in 2004 (geophysics). In 2003 he took a postgraduate programme at the Bremen University (Earth Sciences Faculty), and in 2004 received a Master's degree from the Moscow State University's Higher School of Economics. E-mail: s_agibalov@fief.ru Mikhail Golovnin ­ Candidate of Economic Sciences (2003). Deputy Head of the Centre on Globalisation and Integration of the Institute of Economics of the Russian Academy of Sciences. Graduate in Economics, Lomonosov Moscow State University (2000). Author of over 60 research publications, including papers published by the leading economic magazines (Voprosy ekonomiki, Mirovaya ekonomika i mezhdunarodnyie otnosheniya, Problemy prognozirovaniya, Obschestvo i ekonomika, etc.). One of the authors and editor of the collective monograph Interaction of CIS Financial Systems (St. Petersburg, Aleteya, 2010). Winner of the President of the Russian Federation's bursary competition for young Russian scientists, candidates of science and their research supervisors (2006­2007), winner of the Russian Academy of Sciences Best Economist award in 2004­2005 and 2008. His specialist interests include currency and financial integration, monetary and credit policy, and financial globalisation. E-mail: mgecon@mail.ru Saghit Ibatullin ­ Ph.D., professor, correspondent member of the Kazakh Academyof agricultural sciences. He has significant experience in organisationand realisation of scientific research and development works in the fieldof land-reclamation and water industry. He is a honourble worker of educationof the Republic of Kazakhstan. He is anauthor of more than 80 scientific articles, school books and methodical guides. E-mail: saghit@inbox.ru Murat Jadraliyev ­ MPIA Global Political Economy, University of Pittsburgh, USA. Senior Analyst at the EDB Strategy and Research Department, Economic Analysis Unit. Prior to joining Eurasian Development Bank, he

Eurasian Development Bank

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Notes on the Contributors

worked for the National Analytical Centre of the Government and the National Bank of the Republic of Kazakhstan. E-mail: Jadraliyev_ma@eabr.org Alexander Libman ­ Ph.D., Doctor of Economic Science; Junior Professor, Frankfurt School of Management & Finance; Senior Research Fellow, Institute of Economics of the Russian Academy of Sciences; Research Associate, East China University. Graduated from the Financial Academy of the Government of the Russian Federation; took postgraduate studies at the Institute of International Economic and Political Studies of the Russian Academy of Sciences; and a two-year study course at the University of Marburg. Published two monographs and some 200 other works in Europe-Asia Studies, European Journal of Comparative Economics, Social Sciences, Voprosy ekonomiki, Obschestvennyie nauki i sovremennost, Prikladnaya ekonometrika, Mirovaya ekonomika i mezhdunarodnyie otnosheniya, Obschestvo i ekonomika, Rossiyskiy zhurnal menedzhmenta, Svobodnaya mysl, etc. E-mail: libman@ rambler.ru Natalia Maqsimchook ­ MSc Business Studies; Senior Analyst at Economic Analysis Unit of the EDB Strategy and Research Department. More than ten years of experience in the UN system organisations. She has contributed to various publications on the issues of good governance, regional integration and development, and external aid coordination. E-mail: maqsimchook_nv@ eabr.org Aleksandr Martynov ­ Candidate of Biological Science, Director of Independent Environmental Rating Agency (IERA), Moscow. He specialises in environmental and economic research and sustainable development issues and has extensive experience in studying complex socioeconomic and environmental systems. He graduated from the Lomonosov Moscow State University in 1977 and published over 150 research papers. E-mail: martynov@biodat.ru Alexander Mironenkov ­ Ph.D., Head of Technical Assistance Unit at the Eurasian Development Bank, author of a great number of publications on water and energy system development and creation of sustainable environment issues in Central Asian region and Eurasian Economic Community. E-mail: mironenkov_ap@eabr.org Victoria Mishina ­ Ph.D., chief specialist, Research and Information Department, Moscow Interbank Currency Exchange (MICEX). Graduated from the Lomonosov Moscow State University, Faculty of economy; postgraduate course at the Central Institute of Economics and Mathematics, Russian Academy of Sciences. Mishina worked at the Institute of Economic Forecasting of the Russian Academy of Sciences. She is the author of over 30 scientific papers, including articles published in Money and Credit, Problems of Forecasting, Stock Market, Vestnik NAUFOR, Stock Exchange

12

EDB Eurasian Integration Yearbook 2010


Notes on the Contributors

Survey and other financial and economic periodicals. Sphere of scientific interests: macroeconomic conditions and prospects for development of financial markets, monetary and exchange rate policy, monetary and financial integration and rouble's international role. E-mail: MishinaV@micex.com Yang Cheng ­ Associate Professor, Deputy Director, Centre for Russian Studies, School of Advanced International and Area Studies, East China Normal University, China; Visiting Research Fellow, Slavic Research Centre at Hokkaido University, Japan. E-mail: yangcheng1103@hotmail.com Yerzhan Moldabekov ­ Candidate of Economic Sciences, Analyst at the Economic Analysis Unit, Strategy and Research Department of the EDB since 2007. In 2003 he took a master's programme of the Economics & Business Faculty of the Al Farabi Kazakh National University, and in 2008 received a Candidate of Sciences degree from that school. Yerzhan Moldabekov has a particular interest in the economic development of CIS countries and industry analysis (the space industry and mechanical engineering). E-mail: Moldabekov_ym@eabr.org Ikboljon Qoraboyev ­ Ph.D. Candidate, University of Toulouse 1 Capitole, France; Intern, UNU-CRIS, Brugge, Belgium His thesis focuses on questions of regionalism and regional order in Central Asia. He has presented papers on Central Asian regionalism at conferences in Belgium, Canada, France, Turkey and the US. He participated in the activities of GARNET Network of Excellence on Global Governance, Regionalisation and Regulation and Central Eurasian Studies Society (CESS). He holds a M.A. in International Law (2001) and a M.A. in European Law (2004) from the University of Montpellier 1. He obtained his B.A. degree in International Relations at the University of World Economy and Diplomacy (UWED) in Tashkent, Uzbekistan. E-mail: iqoraboyev@cris.unu.edu. Zhanar Sagimbayeva ­ Senior Analyst at the EDB Strategic Planning Unit. She graduated from Kazakh State University and Oklahoma State University. She has more than ten years of experience in development area at UNDP and government organisations in Kazakhstan. During ten years she led the production of the Kazakhstan's Human Development Report and other UN analytical publications presenting social, economic, political developments in the country. As the head of UNDP Environment and Sustainable Development Unit, she had to deal with various environment projects including their design, implementation and evaluation. During 2006­2007 she was Coordinator of UNDP programmes in the areas of energy and environment, governance and poverty reduction. E-mail: sagimbayeva_zn@eabr.org Marsel Salikhov ­ Candidate of Economic Sciences, Head of Economics of the Institute of Energy & Finance. His specialist interests include the issues of global economy development, commodity and financial markets, and the financial sector in Russia. He is the co-author of a number of papers

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Notes on the Contributors

on the economic development of post-Soviet countries, including GUAM Fifteen Years Later: Economic Changes in Georgia, Ukraine, Azerbaijan and Moldova in 1991­2006 (2007), The Difficult Way Out of the Transformation Crisis (Georgia's Case) (Voprosy ekonomiki, No.10, 2008), Ukraine: Double Transformation (Voprosy ekonomiki, No.3, 2009). Darya Ushkalova ­ Candidate of Economic Sciences (2008). Researcher of the Centre on Globalisation and Integration of the Institute of Economics of the Russian Academy of Sciences. Graduate of Geography (Socioeconomic Geography of Foreign Countries), Lomonosov Moscow State University (2004). Author of over 20 research publications. Her specialist interests include economic integration in the post-Soviet space, foreign trade and foreign policy in the CIS, and political and economic interaction between Russia and Belarus. E-mail: ushkalova@mail.ru Evgeny Vinokurov ­ Ph.D., Deputy Head of Strategy and Research Department ­ Head of Economic Analysis Unit at the Eurasian Development Bank, author of four individual and four collective monographs, including A Theory of Enclaves (Lexington Books, Lanham, 2007), Kaliningrad: Enclaves and Economic Integration (CEPS: Brussels, 2007), The CIS, the EU, and Russia: The Challenges of Integration (Palgrave Macmillan, London, 2007, with Katlijn Malfliet and Lien Verpoest), and the EDB Eurasian Integration Yearbook (2008 and 2009) (EDB: Almaty). Chief editor of the Journal of Eurasian Integration, published by the EDB since 2008. His current research focus is economic integration in Eurasia. Selected articles and reports are available at www.eabr.org/eng/publications/ and www.vinokurov.info. E-mail: vinokurov_ ey@eabr.org Aleksandra Yakusheva ­ Junior Researcher of the Centre on Globalisation and Integration of the Institute of Economics of the Russian Academy of Sciences. Graduate of Geography, Lomonosov Moscow State University (2007). Postgraduate student of the Institute of Economics of the Russian Academy of Sciences. Author of a number of research publications. Her research interests include relations in the Russia­Ukraine­EU triangle and integration in the post-Soviet space. E-mail: alexandra.yakusheva@gmail.com Vladimir Yasinskiy ­ Head of Strategy and Research Department, Member of the Board at the Eurasian Development Bank. He was trained as economist at the Economic Faculty of Moscow State University and at the Institute for Economy of the Russian Academy of Sciences (post-graduate studies). His professional record includes teaching at the People's Friendship University in Moscow and multiple assignments in Nepal, China and India in the capacity of deputy Trade representative as well as deputy representative of Gazprom in China. He is with the Eurasian Development Bank since 2006. E-mail: yasinskiy_va@eabr.org

1

EDB Eurasian Integration Yearbook 2010


Abbreviations

Abbreviations

ACDE ­ Association of Central Depositories of Eurasia ADB ­ Asian Development Bank ASEAN ­ Association of South East Asian Nations CA-4 ­ the four Central Asian states: Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan CAREC ­ Central Asia Economic Cooperation Program CES ­ Common Economic Space CIS ­ Commonwealth of Independent States CIS IASE ­ International Association of Stock Exchanges of the CIS CMEA ­ Council for Mutual Economic Assistance CRRF ­ Collective rapid response force CST(O)- Collective Security Treaty (Organisation) CU ­ Customs Union DFIs ­ development finance institutions EBRD ­ European Bank for Reconstruction and Development EC ­ European Community ECA ­ Europe and Central Asia EDB ­ Eurasian Development Bank EIB ­ European Investment Bank ETS ­ Eurasian Trade System EU ­ European Union EurAsEC ­ Eurasian Economic Community EurAsEC-3 ­ the three largest EurAsEC countries: Russia, Kazakhstan and Belarus EurAsEC-5 ­ the five members of EurAsEC: Russia, Kazakhstan, Kyrgyzstan, Belarus and Tajikistan FDI ­ foreign direct investment FSTS ­ Ukrainian First Stock Trading System FSU ­ former Soviet Union states FTA ­ free trade agreement GDP ­ gross domestic product

Eurasian Development Bank

1


Abbreviations

GUAM ­ Georgia, Ukraine, Azerbaijan and Moldova IBRD ­ International Bank for Reconstruction and Development IDA ­ International Development Association IDB ­ Islamic Development Bank IERA ­ Independent Environmental Rating Agency IFC ­ International Finance Corporation IFI ­ international financial institutions IMF ­ International Monetary Fund IOSCO ­ International Organisation of Securities Commissions IPA ­ Inter-Parliamentary Assembly of the CIS IWRM ­ Integrated Water Management System KASE ­ Kazakhstan Stock Exchange MDBs ­ Multilateral Development Banks MEDT ­ Ministry for Economic Development and Trade MFA ­ Ministry of Foreign Af fairs MFN ­ most favoured nation MICEX ­ Moscow Interbank Currency Exchange MIGA ­ Multilateral Investment Guarantee Agency NIS ­ Newly Independent States OECD ­ Organisation for Economic Cooperation and Development OSCE ­ Organisation for Security and Cooperation in Europe RF ­ Russian Federation RTA ­ Regional trade agreements SCO ­ Shanghai Cooperation Organisation SCO RATS ­ Shanghai Cooperation Organisation Regional Antiterrorism Structure SES ­ Single Economic Space SIEI ­ EDB's System of Indicators of Eurasian Integration UN ­ United Nations UN ECE ­ United Nations Economic Commission for Europe UNFCCC ­ United Nations Framework Convention on Climate Change USRB ­ Union State of Russia and Belarus WB ­ World Bank WBG ­ World Bank Group WFE ­ World Federation of Exchanges WTO ­ World Trade Organisation

1

EDB Eurasian Integration Yearbook 2010


Greetings

Dear friends,

The Eurasian Development Bank is proud to present the 2010 issue of its Eurasian Integration Yearbook. The past year was exceptionally rich in events that will have a direct bearing on the future integration of Eurasia. First of all, the concerted anti-crisis ef forts by our countries have brought about qualitatively new results in economic integration. Notably, EurAsEC countries have not confined themselves to anti-crisis measures alone. Today we are all witnesses to or participants in the large-scale project to establish the Customs Union of Belarus, Kazakhstan and Russia. In the future, a common customs territory will open new GDP growth opportunities for its member states. However, to fully realise the potential of this initiative, a great deal of work has to be done. Since the Customs Union countries are also members of the EDB, we at the Bank believe this Union will provide a strong impetus for trade, investment and new cross-border projects, which in turn will drive demand for the Bank's credit resources. Another critical area of cooperation is, undoubtedly, the EurAsEC Anti-crisis Fund which in time may well become our "regional IMF". In the past year, the Fund's regulations were finalised, the first meetings of its Council were held, its Experts Council commenced its work, and the preparation of its fist loans began. Our experience and firsthand knowledge of development processes in the region and the needs of our member states make EDB a key element of the Fund's resources management structure. The current stage of integration and the need for responsible decisions on the Customs Union and the Single Economic Space require profound knowledge and understanding of regional economic cooperation. To this end, the EDB is providing comprehensive analytical support to this process, with an emphasis on the sectors and areas that have significant potential for international cooperation. Finally, I am pleased to note that the EDB's publications continue to give our overseas readers an insight into the current status of post-Soviet integration studies.

chair

Man oF thE

igor FinogEnov ExEcutivE board oF thE Edb

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Greetings

Dear readers,

The tenth year of EurAsEC saw a number of pivotal developments which will determine the progress of the integration of the post-S