EDB EURASIAN I N T E G R A T I O N YEARBOOK 2011 Eurasian Integration Yearbook 2011 Annual publication of the Eurasian Development Bank УДК 339.7 ББК 65.012.3 Е 91 Eurasian Integration Yearbook 2011. – Almaty, 2011. – p. 352 ISBN 978–601–7151–21–8 Annual publication of the Eurasian Development Bank Edited by Evgeny Vinokurov 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 2009–2010 Armenia, Tajikistan, Belarus became full members of the Bank. Electric power, water and energy, transportation infrastructure and high-tech 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 in 2009. In June 2011 the Eurasian Development Bank launched the Centre for Integration Studies. This new analitical structure will focus on the applied research, in particular on the issues of regional economic integration. ISBN 978–601–7151–21–8 УДК 339.7 ББК 65.012.3 © Eurasian Development Bank, 2011 Address: 220, Dostyk ave., Almaty, 050051, Republic of Kazakhstan, Telephone: +7 (727) 244 40 44, Fax: +7 (727) 244 65 70, 291 42 63 E-mail: [email protected] 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 2011 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 6 Notes on the Contributors 10 List of Abbreviations 13 Greetings Igor Finogenov, EDB Chairman 16 Sergey Glazyev, EurAsEC Deputy Secretary General 17 Vladimir Yasinskiy, EDB Managing Director for Strategy and Research Department 18 1. Chronology of Two Decades of Post-Soviet Disintegration and Integration: 1991-2010 19 Global Crisis and Post-Soviet Regional Integration 2. Trends in Investment Cooperation between CIS Countries and the Global Economic Crisis 33 AleksAndr libmAn, mikhAil Golovnin 3. Foreign Trade in CIS Countries During the Economic Crisis 55 mikhAil Golovnin, dAryA UshkAlovA 4. Regional Effects of Global Economic Crisis in CIS: Migrants’ Remittances Channel 75 mikhAil Golovnin, AleksAndrA yAkUshevA 5. Spaghetti, Noodles, and Lapsha in Eurasia: Results of Gravity Regression for Eurasian Supercontinent 88 elvirA kUrmAnAlievA, evGeny vinokUrov Institutions of Regional Integration 6. Developing Institutional Structure of Eurasian Economic Community 106 nikolAi kAveshnikov 7. On Possibility of Artificial Currency Devaluation Within the Customs Union 124 evGeny vinokUrov, elvirA kUrmAnAlievA EDB Eurasian Integration Yearbook 2011 Contents 8. The Stock Markets of Russia and Kazakhstan: Prospects for Integration, edb report no.10 136 nAtAliA mAqsimchook, pArtAd Eurasian Integration – Historical and Social Aspects 9. Waves of Eurasian Exchange 187 evGeny vinokUrov 10. Educational Migration from Kazakhstan to Russia as an Aspect of Strategic Cooperation within the Customs Union 198 botAGoz rAkishevA, dmitry poletAev Economic Cooperation in Industries and Sectors 11. Integration Processes in CIS Telecommunications Sector 220 AiGUl AbsAmetovA 12. Russian and Kazakhstani Nuclear Energy: Trends in Economic Cooperation 232 AiGUl AbsAmetovA 2010: Data and Events 13. Chronicle of Eurasian Regional Integration 2010 246 nAtAliA mAqsimchook 14. Main Macroeconomic Indicators of CIS Region 313 elvirA kUrmAnAlievA, GAUkhAr ormAntAyevA 15. International and Regional Development banks in Northern and Central Eurasia: Overview of Activities in 2010 321 ellA bAybikovA Information for Authors 342 Index 343 Eurasian Development Bank List of Figures and Tables List of Figures and Tables Figures Figure 2.1. Inflow of investments from Russia to CIS countries 38 Figure 2.2. Inflow of investments and direct investments in Kyrgyzstan 40 Figure 2.3. Accumulated direct investments by Ukraine in Russia and by Russia in Ukraine 40 Figure 2.4. Investment inflow and outflow in/from Kazakhstan 41 Figure 2.5. The share of Russian (a) and Kazakh (b) investments in total investments in CIS countries 42 Figure 3.1. Contribution of the decline in exports to CIS and remote markets to the total decline in CIS exports 64 Figure 3.2. Contribution of the decline in imports from CIS and remote markets to the total decline in CIS imports 66 Figure 3.3. Contribution of the decline in intraregional turnover to the total decline in CIS turnover 67 Figure 5.1. Eurasian Spaghetti-Noodle-Lapsha 91 Figure 5.2. Dynamics of Eurasian Trade Openness 93 Figure 5.3. Intraregional Trade in Eurasia: 2008 94 Figure 5.4. Structure of intraregional trade of Eurasia: 2009 95 Figure 5.5. Evolution of regional dummies 96 Figure 5.6. Realization of Trade Potentials: actual trade / potential trade 97 Figure 7.1. Macroeconomic convergence 126 Figure 7.2. Monetary convergence 126 Figure 7.3. REER (2001=100) 127 Figure 7.4. RER (2001=100) 128 Figure 7.5. Changes in central bank currency reserves and monetary mass M2 129 Figure 7.6. Changes in the exchange rate, CPI and MPI 130 EDB Eurasian Integration Yearbook 2011 List of Figures and Tables Figure 8.1. Stock market indices in Russia and Kazakhstan 143 Figure 8.2. Categories of Kazakhstani respondents 157 Figure 8.3. Specialisation of Kazakhstani respondents 157 Figure 8.4. The most common professional activities 158 Figure 8.5. Subsidiaries in Russia 159 Figure 8.6. Kazakhstani respondents holding Russian securities 159 Figure 8.7. Kazakhstani respondents holding securities issued in other jurisdictions 160 Figure 8.8. Priority sectors for Kazakhstani professional market players 160 Figure 8.9. Interest in introducing securities to Russia 162 Figure 8.10. Specialisations of Russian respondents 163 Figure 8.11. Russian respondents holding Kazakhstani securities 164 Figure 8.12. APF asset structure in Kazakhstan 166 Figure 10.1. The structure of the study 202 Figure 10.2. Selection criteria for country of study 204 Figure 10.3. Kazakh school graduates’ main reasons for choosing a particular country of study 205 Figure 11.1. Development of information and telecommunications technology in CIS (1998-2008) 221 Figure 11.2. Service area of Russian mobile operators 225 Figure 12.1. Electricity generation by source (1973 and 2007) 233 Figure 12.2. Construction and operation costs of NPP 234 Figure 12.3. Structure of NPP fuel costs 234 Figure 12.4. Key uranium market players 235 Figure 12.5. Kazatomprom’s prospective nuclear fuel cycle 238 Figure 12.6. The current status of the Russian uranium industry 239 Figure 14.1. World GDP growth 314 Figure 14.2. CIS economic recovery 314 Figure 14.3. Commodity price dynamics: 2000-2010 315 Figure 14.4. Geographical structure of trade turnover in CIS countries in 2010 316 Eurasian Development Bank List of Figures and Tables Figure 14.5. Global inflation 317 Figure 14.6. CIS inflation 317 Figure 14.7. State budget balance 318 Figure 14.8. Savings and investments in the CIS: weighted average 319 Figure 14.9. Non-performing loans 319 Figure 14.10. Growth of monetary aggregate (M2) 320 Tables Table 3.1. Real GDP dynamics 56 Table 3.2. Industrial production dynamics 57 Table 3.3. Appreciation/devaluation of CIS currencies against the US dollar 59 Table 3.4. Ratio of absolute decline in intraregional export in 2009 compared to 2008 to nominal 2009 GDP 68 Table 3.5. Ratio of absolute decline in intraregional imports in 2009 compared to 2008 to nominal 2009 GDP 69 Table 3.6. Ratio of absolute decline in intraregional commodity revenue in 2009 compared to 2008 to nominal 2009 GDP 70 Table 3.7. Intraregional exports and imports as a proportion of total exports in CIS countries in 2008-2010 71 Table 4.1. Per capita GDP in CIS countries in 2000–2007 75 Table 4.2. Rate of growth (decline) in remittances 82 Table 4.3. Remittances from Russia made through the main payment systems 84 Table 4.4. Ratio of remittances received to GDP 85 Table 7.1. Ratios of correlation between exports and real bilateral exchange rates in the Customs Union 133 Table 8.1. Accumulated mutual investments by Russia and EurAsEC countries 145 Table 8.2. Portfolio investments 147 Table 8.3.