Economic Relations between Kazakhstan and Russia

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.

These documents envisage the introduction of maximally simplified

procedures for acquiring citizenship and for movement without visas; they

also offer possibilities for contract work and military service; assert the

rights of possession, use, and disposal of property; create conditions for

exchange of currency and transfer of sums of money by individuals and

corporate entities of Kazakhstan and Russia; and many other provisions

which reliably protect the rights and interests of the citizens of the two

countries.

Yet another sphere in which combining the efforts of all the

interested parties is needed is the legal status of the Caspian Sea.

The position of the Republic of Kazakhstan on this issue is based on

the need for an early drafting and signing of a convention on the legal

status of the Caspian Sea, of which a draft was worked out by the

Kazakhstan foreign ministry and sent out to all the interested states as

early as March 1994. Unfortunately, there has been no response to this

initiative for quite a long time now, and the agreement on regional

cooperation on the Caspian Sea issue is still at a standstill.

At the same time preserving this unique object of nature is a task that the

present generation must be worthy of.

The events of the recent years thus prove conclusively the need to

proceed to a new level of integration, which will fully conform to the

vital needs of the peoples. International experience shows that any

interstate association goes through various states in its development,

becoming enriched in the process with new forms of cooperation. The

Eurasian Union should be seen as just one of such transitional forms

capable of optimizing the solution of the problems facing the Commonwealth.

From the time of the publication of the draft EAU project, politicians

and scholars have been paying close attention to it. Four major scientific

and practical conferences were devoted to this subject, as were hundreds of

publications in Kazakhstan, Russia, and other states. Politicians,

scholars, and diplomats continue to study the EAU project with great

attention.

The current period in history is characterized by a radical breakdown of

the old way of life. Society now faces difficult issues, and each person is

subject to serious trials It is quite natural under these conditions that

the peoples of Kazakhstan, Russia, and other countries with an interest in

the unification of the Commonwealth will find it easier to overcome these

difficulties together. A balanced attitude toward the past, a persistent

realization of the present potential, and confidence in a more certain

future - only these things will be able to give the peoples of our

countries a natural feeling of spiritual harmony and a sense of full-

blooded life.

History is offering us a chance to enter the 21st century in a

civilized manner. One of the ways to achieve that, in my view, is the

realization of the integration potential for the establishment of the

Eurasian Union, which will reflect the objective logic of the development

of the post-Soviet space and the will of the peoples of the former Soviet

Union to achieve integration.

This is how President Nazarbayev, the author of the Eurasian project,

characterized the development of this idea and his current vision of its

future: "I still remain an adherent of integration of post-Soviet space. As

I formulated my vision of integration I laid no claims to total realization

of all the provisions of the project, being fully aware of all the

political connotations of that period. Two considerations were my primary

motivation. First, I wanted to generalize within a single whole the most

realistic proposals for further integration, which simultaneously appeared

in the countries of the post-Soviet space. Second, I wished to interrupt

the indecently drawn-out pause in the activities of the CIS institutions.

In the last two years there was movement in the CIS countries on some

issues that had been at a standstill, including

4. VITAL PROBLEMS OF THE PRESENT-DAY STATE OF KAZAKHSTANI-RUSSIAN RELATIONS

The Present State and Prospects for Economic Cooperation between

Kazakhstan and Russia.

The top priority area of Kazakhstan’s policy in foreign trade is the

strengthening of economic cooperation with Russia and consistent

integration of the economies of the CIS countries. This is determined by

the traditionally strong economic links, a high level of mutual

complementarily and interdependence of two economies of a once unified

state, the size of the commodity market and identify of economic problems

awaiting solution. “Analysis of the results of development of the economy

of the former USSR and of experiences of economically advanced nations,”

President Nazarbayev stressed, “shows that the transition to the market is

objectively necessary and historically inevitable.”

The main feature of the present-day situation in Kazakhstan is the

increasing impact of the mechanisms that have evolved in the years of

reform and a weakening of the effect of non-market factors. In the initial

stages, the underdeveloped state of such important instruments of the

formation of the market as privatization, de-monopolization, absence of a

competitive environment, were the main sources of inflation in the

republic, a worsening state of the finances of enterprisers, an acute

shortage of turnover capital, a fall in production due to falling demand

and real earnings of the main mass of the population, as well as growing

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