Eurasian Integration Yearbook 2008 an Annual Publication of the Eurasian Development Bank
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Eurasian Integration Yearbook 2008 An 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 ББК 65.9(2)8 Е91 Eurasian Integration Yearbook 2008. – Almaty, 2008. - p. 264 ISBN 978-601-7151-00-3 An 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 in Eurasia. The Bank was founded by an in- tergovernmental agreement signed in January 2006 by the Russian Federation and the Republic of Kazakhstan. Accession negotiations are currently under way with several neighbouring countries. Electric power, water and energy, transportation infrastruc- ture and high-tech and innovative industries are the key areas for Bank’s financing ac- tivities. As part of its mission the Bank carries out extensive research and analysis of contem- porary 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 In- tegration Yearbook (in English) and a quarterly Journal of Eurasian Economic Integra- tion (in Russian). Both publications are available online at www.eabr.org. The Bank’s Strategy and Research Department publishes detailed Industry and Country Reports and plans to undertake a number of research projects. Developing the EDB Eurasian Integration Index is the first project in the pipeline. ISBN 978-601-7151-00-3 ББК 65.9(2)8 © Eurasian Development Bank, 2008 Address: Republic of Kazakhstan Panfilov St. 98, Almaty, 050000 Eurasian Development Bank Tel.: +7 (727) 244 40 44, ext. 6146 Fax: +7 (327) 244 65 70, 291 42 63 E-mail: [email protected] http://www.eabr.org No part of this publication may be reprinted or reproduced or utilized 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. Contents List of Figures and Tables 2 Notes on the Contributors 4 List of Abbreviations 6 Greetings Igor Finogenov, Chairman of the Board, Eurasian Development Bank 8 Tair Mansurov, Secretary General of the EurAsEC 9 Sergey Lebedev, Chairman of the CIS Executive Committee 11 Johannes F. Linn, Executive Director, Brookings Institute 12 1. Introduction 14 Evgeny Vinokurov Institutional Integration 2. The Sustainability of Regional Integration Projects in the Post-Soviet Space 22 Aleksandr Libman 3. Opportunities and Obstacles to EurAsEC Integration 38 Michail Golovnin Economic Integration: Industries, Sectors, Issues 4. Cooperation in the CIS Machine-Building Sector: Decreasing Rather than Increasing 54 Yuriy Shishkov 5. Transborder cooperation on Russia’s ‘New’ and ‘Old’ Borders 63 Leonid Vardomskiy 6. The CIS Common Electric Power Market 81 Evgeny Vinokurov 7. Preconditions and Prospects for Banking Integration in the Eurasian Economic Community 102 Anna Abalkina Measuring Regional Integration and Economic Development 8. The Metropolisation of the FSU: Temptative Measurement via the Method of Hyperlinks Notoriety 115 Uljana Agibetova and Ivan Samson Reports 9. Nuclear Energy Complexes in Russia and Kazakhstan: Prospects for Development and Cooperation. EDB Industry Report no.1 136 Evgeny Vinokurov 10. Water and Energy Resources in Central Asia: Development and Utilisation Issues. EDB Industry Report no.2 163 EDB Strategy and Research Department Chronicles, Digests and Book Reviews 11. Chronicle of Eurasian Regional Integration 2007 206 Nazira Tiuliundieva 12. International and Regional Development Banks in Central Asia: Overview of Activities 230 Natalia Maqsimchook 13. First and Second EDB Round Tables on Regional Integration, November 2007 and May 2008 246 14. Book Review: Boris Kheifets and Aleksandr Libman “Corporate Integration. An Alternative for the Post-Soviet Space” 252 Erzhan Moldabekov Information for authors 254 Index 256 Eurasian Development Bank EDB Eurasian Integration Yearbook 2008 List of Figures and Tables Figures Figure 2.1. The link between the quality of governance and the population of an integration group 30 Figure 2.2. The link between GDP per capita and the size of population of an integration group 31 Figure 2. 3. Deviation of counterfactual size from actual size 31 Figure 2. 4. Cluster analysis of the post-Soviet space 34 Figure 6. 1. Russian electric power exports in 2002–2007 85 Figure 6. 2. Russian energy exports in 2007 85 Figure 6. 6. Existing and potential regional and sub-regional electric energy markets 97 Figure 7.1. Foreign network in EurAsEC as a share of bank’s assets and capital at the beginning of 2007 109 Figure 7.2. Share of foreign capital, including from EurAsEC member countries, in the banking system 109 Figure 7.3. The dynamics of monthly interest rates on loans issued to non-financial sector in EurAsEC countries 111 Figure 7.4. The spheres of influence of Russian and Kazakh banking capital 113 Figure 8.1. The population of Big Cities in FSU 117 Figure 9.1. Nuclear’s Contribution to World Energy Supplies 137 Insertion 10.1 Development of the Hydro energy potential of the River Vakhsh 178 Insertion 10.2 Cost Estimates for the Construction of Large Dams 180 Figure 10.1. Location map of Kambarata HPP-1 and HPP-2 182 Figure 12.1. ADB: Cumulative lending, Kazakhstan 234 Figure 12.2. ADB: Cumulative lending, Kyrgyzstan 234 Figure 12.3. ADB: Cumulative lending, Tajikistan 236 Figure 12.4. ADB: Cumulative lending, Uzbekistan 238 Figure 12.5. WB: Commitments by sector in 2008 239 Figure 12.6. EBRD: Commitments by sector 242 Tables Table 3. 1. Trade with EurAsEC member countries as a share of total foreign trade for selected EurAsEC countries 43 Table 3. 2. GDP per capita in EurAsEC member countries 46 Table 3. 3. Financial development indicators in EurAsEC countries 50 Table 4. 1. Selected manufacturing indicators in 12 countries in 1995 and 2005 56 Eurasian Development Bank Table 4. 2. Parts and components as a percentage of machinery and vehicle imports and exports in 11 countries 58 Table 4. 3. Parts and components as a percentage of machinery and vehicle imports and exports in nine CIS countries 59 Table 4. 4. Intra-regional exports of machines, parts and components in seven integrated supra-national blocs in 1995 and 2005 60 Table 6. 1. Export of electric power to CIS countries and EurAsEC in 2004–2007 83 Table 6. 2. Imports of electric power from CIS countries and EurAsEC in 2004–2006 84 Table 6. 3. Import and export of electric power by the CIS 84 Table 6. 5. Trans-border investment in the electric power industry in the CIS 88 Table 6. 6. Foreign assets of INTER RAO 89 Table 7.1. Banking sector indicators in EurAsEC member countries 103 Table 7.2. Interest rate margin in EurAsEC member countries 111 Table 8.1. The First Ten Cities of the FSU with Strong Simple Notoriety 121 Table 8.2. Integration Ratio Typology 123 Table 9.1. Global Uranium Recovery 139 Table 9.2. Largest Uranium Consumers 139 Table 9.4. Description of Operating NPPs 143 Table 9.5. Uranium Recovery by Mine 148 Table 10.1. Water Resources of the Aral Sea Basin 165 Table 10.2. Irrigated land in the Aral Sea Basin 165 Table 10.3. Key indicators of water and land utilization in the Aral Sea Basin 166 Table 10.4. Agriculture’s contribution to GDP 167 Table 10.5. Structure of the Production of Primary Fuel and Energy 168 Table 10.6. Annual Production and Consumption of Primary Fuel and Energy 168 Table 10.7. Hydro Energy Potential of the Central Asian Rivers 169 Table 10.8. The largest HPPs in Tajikistan and Kyrgyzstan 172 Table 10.9. Inflow and outflow of water at the Toktogul reservoir 175 Table 10.10. Territorial Water Deficits in the Amu-Darya Basin in 2000 176 Table 10.11. Tajikistan’s Export and Import Relations with the Countries of the Eurasian Economic Community, 2005–2006 185 Table 10.12. Kyrgyzstan’s Export and Import Relations with the Countries of the Eurasian Economic Community, 2005–2006 185 Table 10.13. Kyrgyzstan’s Electricity Export and Import Operations with the Countries of the Eurasian Economic Community 2004–2006 186 Table 12.1. Central Asian countries’ IFI membership 231 Table 12.2. ADB: Loans, TA and grant approvals in 2007 233 Table 12.3. WB: Lending in 2002–2008 238 Table 12.4. EBRD: Lending in 1992–2008 241 Eurasian Development Bank EDB Eurasian Integration Yearbook 2008 Notes on the Contributors Anna Abalkina – Candidate of Economic Sciences, Associate of the Academy of Finance under the Government of Russian Federation, Senior Researcher at the Institute of Economics of the Russian Academy of Sciences. Areas of research covers interaction in the banking sphere in the CIS, analysis of impact of foreign bank capital on national economy, regional financial integration world-wide. Anna Abalkina is a winner of a number of contests, including 2008 laureate of the program “The Best Economist of Russian Academy of Sciences” and winner of the grant contest of the President of Russian Federation in support of young Russian scientists – Candidates of Sciences and their academic supervisors.