Economic Relations between Kazakhstan and Russia

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 about the treaty's member states, which may damage relations between them.
— The Council for Education, Culture, and Science. The formation of coordinated policy on education, promotion of cultural and scientific cooperation and exchange, and joint activity on compiling textbooks and manuals.
— To achieve a deeper coordination and effectiveness of the activities of the EAU countries, it is deemed advisable to set up in each of them a State
Committee (or Ministry) for EAU Affairs.
— Regular meetings and consultations on health services, education, labor, employment, culture, combating crime, and so on, by ministers of EAU countries.

. Encouraging the activities of non-governmental organizations in various areas of cooperation in accordance with EAU member countries' national legislation.

— The Russian language is the official EAU language, functioning side by side with the languages of legislation in the member nations.

— Citizenship. Free movement of citizens within EAU borders requires coordination of external visa policy with regard to third nations. On changing the country of residence within the EAU, an individual automatically receives the other country's membership.
— One of the cities at the juncture of Europe and Asia, such as Kazan or
Samara, might be proposed as the capital of the EAU.
In order to create a unified economic space within the EAU framework, it is proposed to establish a number of supranational coordinating structures:

— A commission on the economy under the Council of EAU Heads of State to work out the main directions of economic reform within the EAU framework; the commission takes into consideration the interests of the national states and offers its proposals for endorsement by the Council of the EAU Heads of State;

— A commission on the raw materials of the EAU exporter countries to coordinate and endorse the prices and quotas for exported raw materials and fuel and energy resources, an appropriate inter-state agreement to be signed by the member countries; coordination of policy in the mining and sale of gold and other precious metals is to be envisaged;

— A fund for economic and technological cooperation formed with EAU members' contributions. The fund will finance promising science-intensive economic, scientific, and technological programs and render assistance in the solution of a wide range of problems, including legal, tax, financial, and ecological issues;

— A commission on inter-state financial-industrial groups and joint ventures; — an EAU international investment bank;
— An inter-state EAU court of arbitration on economic problems, to resolve conflicts on a legal basis and to impose sanctions;
— A commission on the introduction of a clearance monetary unit (transfer ruble).
It is proposed to implement a number of measures to preserve the potential achieved in the previous decades and to enhance integration in the field of science, culture, and education:
— The setting up of common EAU research centers to carry out fundamental research in contemporary knowledge;
— The setting up of an EAU fund for the development of scientific research to unite the scientific collectives from various countries;
— The setting up of a committee on links in the field of culture, science, and education under the Council of the Heads of EAU Governments;
— Encouragement of the formation of non-governmental associations in the sphere of culture, education, and science;
— The setting up of a grants fund under the EAU Executive Committee.
It is proposed to conclude the following accords on defense within the EAU framework:
— A treaty on joint actions to strengthen the national Armed Forces of the
EAU member countries and to protect EAU external borders.
The EAU will establish a unified defense space to coordinate defense activities:

. The formation of joint peace-making EAU forces to maintain stability and eliminate conflicts within the member countries and between them. The sending of peace-making forces to conflict areas on EAU territory - with the agreement of EAU member states and in accordance with international legal norms;

. The tabling of joint proposals by EAU member countries at international organizations, including the United Nations

Security Council, on lending EAU joint contingents the status of a peace-making force;
— The setting up of an inter-state center on problems of nuclear disarmament attended by representatives of international organizations.
— All EAU states except Russia maintain their nuclear-free status.

In the area of ecology, the following mechanisms must be formed in the nearest future, according to the EAU project:
— An ecological fund under the EAU Council of Heads of State, to realize ecological programs within the EAU framework, to be financed by all member states;
— Coordination of actions with international organizations to reduce the extent of environmental pollution;
— Endorsement of short- and long-term programs for major problems of restoration of the environment and liquidation of the consequences of ecological disasters (the Aral Sea, Chernobyl, the Semipalatinsk nuclear testing ground);
— The endorsement of an inter-state EAU agreement on storing nuclear waste.
The Eurasian Union of States is thus based on three principal provisions:
— Joint supranational coordinating organs for the management of the economy, defense, and foreign policy;
— A unified economic space;
— A common defense complex.
The supranational institutions include the highest organ of political leadership of the Union - the council of heads of state and heads of government; the highest consultative organ, the parliament; the councils of foreign and defense ministers;

And the interstate executive committee - a permanently functioning executive and controlling body whose head is appointed by the heads of government for a term which they themselves define.
As for the unified economic space, it may be built, e.g., on such a basis as coordinating economic policies and mandatory programs; a common legislative basis regulating relations between economic agents; a supranational currency on the European ECU model; coordination of direct links between enterprises; the setting up of joint and mixed industrial- financial groups, transport firms, trade houses, and exchanges. The defense and foreign trade complexes may be just as effective. The EAU as represented by its executive committee must receive the status of an authorized representative in all the leading interstate organizations of the world.

The practical realization of the provisions of the EAU project in the bilateral Kazakhstan!-Russian relations is excellent proof of the viability of this program.

On January 20, 1995, a package of extremely important integration documents was signed during the working meeting between presidents
Nazarbayev and Yeltsin. This package included a declaration on expanding and deepening Kazakh-stani-Russian cooperation and an agreement on the
Customs Union, which was also signed by Belorussia. Both of these were discussed in detail before. This last agreement opens the way to the establishment of a unified customs space to be followed by a unified economic space, as envisioned in the EAU project.

With the setting up of the Customs Union, the economic cooperation of the three countries is built on the principles of free, non-discriminatory trade; a common market of commodities, services, capital, and labor; and close interaction in the production, investment, and financial spheres.

At present, the first stage in the formation of the Customs Union is largely completed. The work done by the three sides is generally recognized to be an important element of the realization of the foundations of the
Economic Union and the formation of the common market of CIS countries.
The legal acts on tariff and non-tariff regulation of foreign trade have been unified. Kazakhstan and Russia have signed an agreement on unified control of customs services. An agreement has also been reached on the identity of trade procedures in both countries in relation to third nations, and unified procedures have been introduced on the customs statistics on foreign trade and customs registration of commodities subject to excise. Customs controls on railroads and passenger air traffic between the two countries are lifted step by step.

A treaty has been signed between the Republic of Kazakhstan and the
Russian Federation on joint efforts on the protection of outer borders, the term “outer borders” taken to mean the sectors of the border between our countries and the states that are not part of the CIS. The edict of the president of Kazakhstan dated September 19, 1995 On the Lifting of Customs
Control on the Border between the Republic of Kazakhstan and the Russian
Federation concludes the first stage in the formation of the Customs Union and orders the implementation of joint customs controls on the Kazakhstan and Russian sectors of the outer borders of the Customs Union.

At the second stage of the formation of Kazakhstani-Russian-
Belorussian economic efforts to form a customs union, the most important areas of cooperation are a closer coordination of economic reforms; harmonization of civil and economic legislation; unification of currency, tax, and price regulation by the state with the aim of leveling out the economic and legal conditions for the activities of commodity producers within a unified customs space; working out coordinated positions of the members of the Customs Union in relations with third countries and international organizations. At the meeting of heads of CIS countries in
November 1995, three more countries stated their desire to join the Customs
Union: Kyrgyzstan, Uzbekistan, and Tajikistan. Later, only Kyrgyzstan went through with the necessary procedures and entered the Customs Union.
Another example of collaboration in the field of integration is the agreement on the Baikonur space vehicle-launching site, which makes it possible to use this great scientific and technological facility in the interests of Russia and Kazakhstan, as well as documents on the issues of citizenship signed by the presidents of Kazakhstan and Russian.

Let us consider in somewhat greater detail the problems of citizenship, of which the solution on a bilateral basis was also outlined in the draft project of the EAU.

Issues of citizenship became particularly prominent at the time of the emergence and building of sovereign independent states after the disintegration of the USSR, when tens of millions of former Soviet citizens overnight ended up outside their "historical homelands." This problem is as topical for Kazakhstan and Russia as for other CIS countries. More than that, it often figures as one of the most important issues of bilateral relations with Russia.

The more acute aspects of this problem were lifted as a result of the signing in January 1995 by the presidents of Russia and Kazakhstan of a treaty on the legal status of citizens of both countries living on the territory of the other state and of an agreement on simplified procedures for acquiring citizenship in moving from one country to another. Well-known specialists from the two countries worked fruitfully on these documents.
Authoritative Kazakhstan! and Russian politicians and jurists believe that these are innovative agreements without parallel in the world, and they are a fairly rare example of regulating bilateral issues on a civilized basis.
The importance of these agreements both for progressive development of our countries and for normal life of the citizens of Kazakhstan and Russia cannot be exaggerated.

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