Kyrgyzstan MPs blame Government for poor work on EEU integration

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BISHKEK (TCA) — The Onuguu-Progress party faction in the Kyrgyz Parliament will seek the Government’s resignation due to its poor work on Kyrgyzstan’s integration into the Eurasian Economic Union (EEU), the faction leader Bakyt Torobaev said on February 16. Earlier this month, the Ata Meken opposition parliamentary faction suggested expressing a vote of no confidence in the Government.

Kyrgyzstan’s transitional period with preferences will end in August 2017 and the country will then obey common rules for all the EEU member states.

Not ready for EEU

Kyrgyzstan’s accession of the EEU has given local producers an opportunity to enter new markets and work according to international standards but the Government had not prepared conditions for it, MPs said.

Kyrgyzstan’s trade with the EEU member states decreased by 18.6% in 2016 compared to 2015 and amounted to $1.9 billion. Revenues from customs duties fell by 23% compared to 2014. Trade at the Dordoi and Kara-Suu markets, the largest in the country, has decreased threefold.

Farmers cannot export their products because they do not meet the requirements of EEU technical regulations. Problems with the export of meat and dairy products are also related to livestock identification.

According to MP Kanybek Imanaliev (Ata Meken parliamentary faction), only 19 local farms have been granted the right to export their products to the EEU markets while there are 320 thousand farms in the country.

Ex-Chairperson of the Count Chamber Elmira Ibraimova believes that many of Kyrgyzstan’s problems within the Eurasian Economic Union are due to the Government’s poor work.

“We hoped for too long that someone will solve our problems. We blame the EEU partners for not giving us money to start production and construct certification laboratories,” Ibraimova said on February 15 at the forum to discuss the country’s integration in the EEU.

To enter the EEU markets, it is necessary to conduct an identification of cattle and to introduce an electronic tracking system. The Government has started to think about it just now, when the period of preferences granted to Kyrgyzstan to facilitate its adaptation to the EEU will soon expire.

Government’s optimism

Despite the criticism of MPs, Deputy Prime Minister Oleg Pankratov was optimistic, speaking about a 3.8% GDP growth and an increase in customs duties by 8 billion soms in 2016.

Exports grew by 5.1% in 2016, up to $1.54 billion, compared to a 22% decrease in 2015. Imports decreased by 3.7% in 2016, compared to a 29% decrease in 2015.

According to a research, had Kyrgyzstan not entered the EEU, its GDP growth would barely exceed 0.1% by the end of 2016, Pankratov said.

“By joining the EEU, Kyrgyzstan has provided itself with the opportunity to find its own place in global trade and international market,” he said. “A country not included in any of the existing integration organizations would be an outsider counteracting the economic and political powers of several cohesive states.”

According to Pankratov, the main task of the Government in joining the EEU was to save the country’s market and niche.

“Since the establishment of the Customs Union [now EEU], there was a threat that Kyrgyzstan could lose the existing markets, not only because of the customs and tariff barriers, but also because of the growing number of technical barriers,” he said.

Kyrgyzstan, with its small economy, does not have large hydrocarbon resources, so it cannot exist separately.

When Kyrgyzstan entered the EEU in 2015, the choice was: either the country joins the union of Russia, Belarus and Kazakhstan and gets involved in global processes, or it will develop on its own, competing not only with the EEU member countries but also with such economic giants as India, China and Iran.

According to Pankratov, the issue of Eurasian integration is strongly politicized, and this is the Government’s mistake. The population has high expectations and believes that the EEU can solve all of the country’s problems.

Protecting local entrepreneurs

It makes no sense to discuss whether it was right or wrong for Kyrgyzstan to join the Eurasian Economic Union, ex-Prime Minister Temir Sariyev said at the forum.

The decision on Eurasian integration was historically correct and politically verified, he stressed. Kyrgyzstan’s membership of the EEU guarantees the country access to large markets and an opportunity to systematically solve problems. Staying outside of the EEU would mean endless obstacles and problems for the country.

Kyrgyzstan now has to think about steps to be taken to take advantage from its EEU membership. To open certification laboratories and export products in large volumes, the Government should draft a roadmap to develop entrepreneurship and to protect the interests of local entrepreneurs, Sariyev concluded.