Common economic space as a perspective form of interaction in ensuring food security

The subject of food security is strategically important for the country. In this article are considered possibilities of increase stability of food supply by means of the trading block of the countries which entering into Common economic space. Authors considered possibilities for identification and using of unrealized potential of a regionalization of the economic relations in the countries of the Customs union. In article the assessment is given to the main results of the present stage of regional integration, positive sides for the Kazakhstan economy from CES functioning are defined: creation of a common market, free moving of the goods and services, cancellation of customs control, etc. Positive and negative sides of functioning of CES are noted in the developed SWOT analysis.

In modern conditions there is an intensive strengthening of the international economic interrelations and interdependence of the various countries and regions of the world. It conducts to increase of a role of an international component in all factors, links and elements of national reproductive system.

The world economic crisis of 2009 pointed first of all a necessity of legal and economic rapprochement of the countries at regional level. As the professor of Geteborg university (Sweden) Bjorn Hettne, «fairly notes a regionalism — one of ways to cope with global transformation because the majority of the countries which has not enough forces and funds to overcome this problems at national level» [1].

One of important aspects of economic policy and state strategy at the present stage is the regionalism. In general, regionalism in the economic theory and in practice is considered as the policy of the state   which directed on rapprochement of the political and economic relations in some region, or the state integration policy.

In the present time the number of regional agreements about free trade, Customs unions and preferential trading agreements was exceeded by three hundred and almost each country enters into some trading block, and even at once in several blocks. Thus, the regionalism and a regionalization is the objective tendencies of modern world market space which is being globalized. Furthermore this tendencies determined by aspiration of the national states to use the international exchange of the goods and factors of production for an intensification of economic growth, increasing of the income of business sector and public welfare of the country on the whole.

It is important to note that globalisation and a regionalization have the dual functional kind. On the one hand, they carry out consolidating function (from the point of view of liberalisation of every possible commodity and resource streams and the strengthening of interdependence of the various countries caused by it). On the other hand, for them it is also characteristic the dividing beginning: the globalisation inevitably conducts to polycentric stratification of the world, and a regionalism — to isolation from the third countries. In fact it means that the intensification of communications between the participating countries of the regional integration unions, merging of their economic or political systems is not the purpose of regional integration, more likely its incidental effect or the tool. The dominant purpose of regional integration as the model of the consolidated active participation of group of the countries of the region in globalisation processes of stratification of the world, aspiration of the participating countries to take higher position in world the world and to exclude probability of drift towards the periphery.

From these methodological positions it is necessary to analyze possibilities and consequences of the introduction of Kazakhstan in the Customs union with Belarus and Russia and the subsequent creation of Common economic space.

The concept «Common Economic Space» unlike «free trade area» (FTA) and «Customs union» is not mentioned in official documents of the WTO as a special form of integration, nevertheless, there are two economic spaces in the world, issued by the relevant agreements which are formed around the European Union. This European economic space with participation of EU and the countries of the European association of free trade (EFTA) and the General European economic space of EU and Russia, founded later. In the first case the advantages provided by Uniform economic space to the countries of EFTA, are limited and have the limits in comparison with complete membership in EU. The principle of free movement of the goods, services, the capitals and individuals are not fully extends on EFTA countries, and cooperation in the sphere of macroeconomic and currency policy is limited by consultations and exchange of information, control on borders of EU and EFTA remains.

The concept of the General European economic space of Russia and EU, according to experts, has uncertain character from the point of view of a format and common purpose of integration [2]. «The Road map» of the Common Economic Space supplements the Concept and contains a complex of priority actions on the near-term outlook, however does not define terms of realisation of these actions, control and responsibility of the parties mechanisms for their performance. As well as in the Concept, in «The Road map» there is no mention of FTA.

These models of economic space, despite their specifics and difficulties of formation, allow to speak about new general tendencies of development of regional integration in the conditions of globalisation:

• first, precedent for rapprochement in the integration focused format of essentially differing economy and interstate economic associations is created;
• secondly, in the conditions of multiplane influence of globalisation and complication of forms of inclusion of national economies in global processes this format is more preferable than the "rigid" formats of integration assuming consecutive expansion of the sphere of competences of supranational bodies;
• thirdly, this model of integration creates planned environment for deepening economic and scientific technical interaction between the participating countries;
• fourthly, in the classical scheme «the economic space» takes a place between a common market and the economic union, and for the majority of the countries which is building preferential schemes of trade and economic cooperation with partners, this model can be considered as «the top limit of integration» as all further stages are interfaced to restriction of the national sovereignty [3].

Available experience of functioning and realisation of integration initiatives in a format «the general (or uniform) economic space», despite terminological uncertainty and absence of official designation in WTO documents, creates preconditions for its consideration as a transitional form of regional integration.

To features of formed Uniform economic space of Belarus, Kazakhstan and Russia (CES) belong:

• existence of elements of supranational regulation;
• CES consideration as intermediate stage of integration of the countries of the Customs union on the way to creation of the Euroasian economic union. So, the agreements providing realisation are included in number of main units of documents of the CES contract and legal base of «four freedoms», unification of principles of the competition and harmonisation of norms of economic regulation in key spheres, carrying out the co-ordinated macroeconomic and currency policy, definition of uniform rules of functioning of the branch markets (power, communication, transport).

In the conditions of globalisation and uncertainty of the world economic architecture, and also terms of creation of the Euroasian economic union, this form has essential advantages for the participating countries of the Customs union of Belarus, Kazakhstan and Russia. Flexibility of category «uniform economic space» assumes some freedom in a choice of actions and criteria of integration process in this format. These advantages consist:

• first, in definition of the contents, priorities and terms of realisation of actions;
• secondly, in expansion of possible number of participants with different motivation, scales and structure of economy, both in rigid, and in a "soft" format of economic space without creation of supranational bodies (the CU and the EurAsEC country);
• thirdly, this form does not contradict the project of creation of the International zone of free trade (IZFT) of the According to experts, possibility of Belarus, Kazakhstan and Russia to speak on behalf of faces of the CU, would allow to structure all system of obligations on IZFT and to fix the international legal personality of the Customs union;
• fourthly, CES can develop in parallel with implementation of agreements of the Customs union of Belarus, Kazakhstan and Russia with other Customs unions (on type EC Turkey, EU-MERKOSUR, ), and also with the third countries and their groups in a format of regional trading agreements (RTA).

Specificity of CES model of Belarus, Kazakhstan and Russia, caused by its limit character, allows to combine lines of a common market, elements of the economic and currency union. In the conditions of decrease in possibilities of rigid regulation of processes of integration cooperation the given form is most acceptable for integration of CIS countries.

The relevance of completion of processes of institutional formation of the Customs union and Common economic space of Belarus, Kazakhstan and Russia increases due to inevitable involvement of CIS countries in negotiations about conclusion of regional trading agreements with the regional countries (for example, Ukraine-EC, Ukraine — EFTA) and an existing tendency of decrease in volumes of intraregional trade.

In the second half of the XX century and at the beginning of the XXI century established more than ten regional economic associations of integration character which were notified in the Secretariat of the GATT/the WTO as Customs unions. Only EU and Customs unions with EU participation were recognised, however other Customs unions are at less advanced stage or exist only on the paper, any of them has not broken up yet [4].

The Customs union became a fundamental stage of formation of EU. Today it continues to carry out functions of increasing of the international competitiveness of the European economy and to strengthen economic positions of EU in the world market.

The Customs union of Belarus, Kazakhstan and Russia and the Customs union of EU unites existence of the following signs:

• economic interest and strong political will to association;
• the Customs union in both cases was initially considered as the economic project in a context of the economic integration beyond trade in the goods and assuming close merging of national farms in other sectors;
• management of the Customs union provides formation of supranational

The Customs union of Belarus, Kazakhstan and Russia is closest to a format of the Customs union of EU, but at the same time CU has a number of the differences caused by specifics of CIS countries. First of all it concerns preconditions and conditions of formation of the Customs union, namely from the following a determinant:

• initial factors of integration;
• level of social and economic development of the participating countries of integration interaction;
• level and dynamics of mutual trade;
• existence of alternative projects.

As to initial factors of integration, for the European countries — founders need of increase of efficiency of industrial production (in the absence of considerable stocks of raw material resources) by creation of the integrated economic space became an initial factor to association. For CIS countries the initial incentive inducing to integration, was the external factor of negative global pressure and need of preservation of integrated earlier economic space.

Concerning level of social and economic development of the participating countries of integration interaction, it should be noted that all six founder countries of EU were at approximately identical level of economic development and had the similar structure of an economy based on the advanced industry and opening possibilities for production, interbranch and intra branch cooperation. The Customs union of CIS countries is based on the similar structure of economy of member countries based on using of considerable joint raw potential which intensity of use is insignificant (3,5 % of world export of goods and 2,5 % of services).

Level and dynamics of mutual trade is one more important condition of regional integration. In 1958 30 % of all volume of a foreign trade turnover were the share of mutual trade of EU countries, in 1970 — 49 %, by the beginning of the 80th (taking into account new members) — 54 %. Now 65 % are the share of intraregional trade of EU. In contrast, for the former Soviet Union countries decrease in specific weight of mutual trade from 27,7 % in 2000 — to 21, 8 % in 2010.

Existence of alternative projects also influences degree and depth of integration interaction of the countries of the region. So, for EU is an absence of alternative projects is characteristically except expansion of a field of activity at the expense of the countries of Europe and the Russian Federation (the program «Eastern partnership»). On the former Soviet Union area there are significant alternative projects as in the CU (OEP EU and the Russian Federation, Ukraine-EU and others), and out of the region (SCO) that can be considered as a factor of weakening of the position of the CIS.

The Customs union is considered in the international economic practice as a possibility of using advantages of real integration. For Belarus, Kazakhstan and Russia global advantages are caused by existence of resource, transit potential and the human capital, and problems are connected with inefficient using of these benefits [5].

The main feature of CES of Belarus, Kazakhstan and Russia is a terms of its formation. According to experts it assumes simultaneous realisation of two levels of integration interaction on space of the CIS:

• «rigid integration» in a format of three countries of the Customs union with its possible distribution on the EurAsEC countries;
• «soft integration», meaning creation of such system of the international relations in the CIS at which economic confrontation in principle is In this model the state keeps the sovereignty, is a separate part of integration process, decisions are accepted by means of consensus and are directed on overcoming of arising problems.

Other consequence of acceleration of processes of regional integration on space of the CIS is formation of two models of its development:

• «positive integration», which is connected with transition to supranational institutes or joint decisionmaking;
• «negative integration», meaning unification of economic rules and policy within bilateral agreements and creation of rather homogeneous economic space functioning in the conditions of a common market.

The examples of development of integration within given above models are EU and ASEAN, developing, respectively, under the influence of institutional agreements and integration of the markets. On the former Soviet Union area in a transition period can be release preconditions for formation universal model of integration of the CIS, which could unite the following parametres of both models:

• sharing of resources with the maximum economic and social efficiency;
• free circulation of factors of production;
• unification of a trading mode in the conditions of MFTA CIS with agreement elements about «FTA plus».

On the countries of the Customs union forming «the core of integration processes» on space of the CIS, in the conditions of quickly changing situation in world economy lies the main responsibility for preservation and development of the CIS as integration group. Possibly, it will demand reforming of institutes of the CIS, and also correction of the purposes and problems of existing Strategy of its development for the period till 2020, in particular, the solution of questions:

• ensuring economic growth;
• increases in volumes of intraregional trade;
• developments of common markets (commodity, work, investments, education, );
• granting the regional market for the world goods and services and access of the domestic goods to the world markets;
• infrastructure problems (transport service of commodity streams, );
• formations of the Euroasian zone of economic

At the present stage there is a possibility for identification and using of unrealized potential of a regionalization of the economic relations on the former Soviet Union space for the account:

• increases of the importance of trade in group (CU) and reorientation of domestic markets from foreign countries on the CIS market;
• stimulations of infrastructure projects;
• increases in investment streams in the CU and the CIS;
• formations of the regional market of primary raw materials;
• changes of structure of intraregional barter;
• achievements of equation of commodity and investment cooperation, both on space of the CIS, and in the CU.

Objective difficulties of economic implementation of the integration project of three states of the CIS only increase the special importance of subjective factors ideologies and programs of integration, mechanisms of regulation and cooperation stimulation.

Importance of the present stage of integration consists in ensuring stability of an existing format of the Customs union as in a transition period there are economic and political preconditions as for its further development in the high-grade economic union, and for preservation of integration processes in the region at level of the Customs union (with withdrawals and restrictions).

As it is represented, the main results of the present stage of regional integration consist in two perspective possibilities:

• in CU positioning as subject of a world trade policy;
• implementation of the project of «soft integration» without creation of supranational bodies as in scales of all Commonwealth (by MFTA creation, «FTA plus»), and in EurAsEC scales (the CU Common Economic Space with other countries of EurAsEC).

Thus, an optimum and perspective form of integration interaction is the  Common  economic space which signalize itself completion of processes of institutional formation of the Customs union and is considered as the intermediate stage of integration of the countries of the Customs union on a way to creation the Euroasian economic union.

Potential possibilities and advantages of CES are caused by a geographical arrangement of the partner countries, deep economic relations, cultural and mental proximity. Actually, today there is a speech about formation of the new economic centre of influence global scale on which the environment of the world markets will depend in many respects.

As positive sides for the Kazakhstan economy from functioning of CES it is possible to allocate the following: creation of a common market, free moving of the goods and services, cancellation of customs control etc. Actually the potential from integration within CES is much wider [6].

As negative effects such consequences, as impossibility of protection of domestic market of the country from the competition can act from the Russian, Belarusian and arriving Chinese goods. Kazakhstan obviously and implicitly constrained until recently import, first of all the Russian goods on the Kazakh market. In CES it will be impossible to do it.

Positive and negative sides from CES functioning, and also possibility and threat in the table of SWOT analysis are presented on table. 

SWOT-analysis of prospects of functioning of CES for Kazakhstan

T a b l e 

As the world practice shows, the competition is the engine of economic progress, because it present optimum ways and mechanisms of the organisation of production that conducts to growth of efficiency of all national economy, and also to increase of level of food security. After final registration of all «rules of the game» and the institutional procedures that necessary for normal functioning of the CU and CES, positions of each participating country and all block in globalisation processes and world hierarchy will amplify.

For the countries of the Customs union and CES is very important the expansion of number of participants at the expense of involvement of strong players, as China and Turkey that should promote increase in volumes of trade, strengthening of competitive fight and decrease in influence of each country at the general situation, to development of competitive productions. From this position the project «New Silk Way», mentioning the main actions of a transport and communication complex, and also a complex of actions of allied industries of economy, including areas of the industry, innovations, customs and other types of control on border and in the Republic of Kazakhstan can become an important stage of integration.

Expansion of geography and number of participants of economic integration will give the chance to Kazakhstan to reduce influence of negative effects which are existing today, to expand sales markets of a domestic production, to strengthen own position and to become the important interregional transit centre, being actively built in modern system of global political and economic interrelations.

References 

1. Bjorn Hettne. Globalisation and the New Regionalism: the Second Great Transformation // Hettne, , Inotai, A. and Sunkel, O. (eds.). Globalism and the New Regionalism. London, Macmillan, 1999, p. 3–24.
2. Dolgov S.I. Russian external economic messenger, 2010, 9, p. 21–45.
3. Sabelnikov L.V. Russian external economic messenger, 2010, 6, p. 66–71.
4. Tchebotareva E.D. Russian external economic messenger, 2010, 7, p. 95–107.
5. Dyumulen I.I. Russian external economic messenger, 2010, 7, p. 55–71.
6. Spartak A.N. Development and international legal regulation of processes of regional economic integration: new tendencies and facts at the beginning of XXI century // Russian external economic messenger, 2010, 7, p. 86–99.