Analytical materials / Tajikistan

Negmatullo Mirsaidov: “Should Tajikistan seek the accession to the EEU after Kyrgyzstan accession?”

06.07.2015

Negmatullo Mirsaidov, a journalist-analyst (Khujand, Tajikistan), discusses the benefits Tajikistan may receive after the entry into the EEU and possible problems for this country in an article written exclusively for Cabar.asia.
In 2015, Armenia and Kyrgyzstan joined the ranks of the members of the Eurasian Economic Union, which previously included Russia, Belarus and Kazakhstan. The closest neighbor of Tajikistan – Kyrgyzstan  – officially joined the EEU after the signing of a decree by the President Almazbek Atambaev on May 21. Tajikistan is among the candidates to join this new economic education and is the first in the list of candidates. The first and the last, so far. No other country of the former post-Soviet space has shown much interest in the new association, although we can not exclude the possibility of Moldova’s joining the EEU, rushing between the European Union and the EEU. Azerbaijan is actively invited by Russia into the ranks of the organization. A number of unrecognized state formations, such as the Republic of Abkhazia, South Ossetia, Moldovan Transdniestrian Republic, and, provided a certain development of the situation in Ukraine, People’s Republics of Donetsk and Lugansk can potentially also join the EEU.
Does Tajikistan have any choice?
We cannot say that the entry of Tajikistan into the EEU is a done deal. However, closer economic integration with Russia, the extensive labor migration, allowing to solve some socio-economic issues in the country, the presence of a Russian military base on the territory of the republic, a number of other important military objects, including the space station of tracking, the military threat coming from neighboring Afghanistan are factors that force Tajikistan to join the Union in the near future.
It is unknown how much time it will take – a year, two or three. It all depends on what kind of pressure from the Russia Tajikistan will continue to undergo, trying to protect itself not only economically, but also militarily, trying to push threats from the West, including the United States, from its own borders.
It is known that any alliance with big countries is a partial loss of sovereignty. Economic unions are no exception, although they speak of the EEU, as a union of the equal. The Kyrgyz Republic, despite the fact that Russia’s share in the total turnover of the country is much lower than the share of countries such as China and Turkey, yet has chosen to give some of its powers to the EEU, where the more powerful economy of Russia will be dominating. Certainly, Kyrgyz economists took into account all the “pros” and “cons”. The fact that Kyrgyzstan will receive $ 200 million compensation for the accession says that the impact of adverse factors on the economy of Kyrgyzstan will be more powerful than that one of favorable factors. But the leadership of the Kyrgyz Republic expects to receive a good environment for economic development in the future. According to analysts, the country in the next two or three years, will develop the situation when the economy gets a powerful impetus to even further positive development. This must happen as a result of the free movement of goods, capital and labor.
“Kyrgyzstan is an agricultural country, – says the head of department of economy of the Batken regional administration Solehdzhan Hamrabaev. – Almost all exported agricultural products go to Kazakhstan and Russia. – Free movement of goods will open for our peasantry an opportunity to increase production in the agricultural sector. We do not exclude that Russian investments will flow into the republic in connection with decreasing supply of agricultural products from the EU to Russia. This is a good chance to occupy a vacant niche”.
The Republic believes that with the help of Russia, it can become a powerful energy power with the available hydropower potential. Mining industry will get good prospects. In view of the geographical position, the country may become a transit base between North and South, while receiving the opportunity to develop tourism.
Kyrgyz labor migrants and entrepreneurs have already received a number of benefits as a result of which their situation is more favorable with the situation of Tajik citizens in Russia. For example, the latest changes of the Law of the Russian Federation “About the stay of foreign citizens in the Russian Federation” do not apply to migrant workers from the Kyrgyz Republic. These changes caused a significant reduction of labor migration from Tajikistan and reduced incomes of the population. A Kyrgyz citizen to find a job in Russia today needs only to register and to negotiate with the employer, on the same basis as citizens of the Russian Federation, whereas migrants from Tajikistan are forced to buy the patent, pass exams on knowledge of the Russian language and the basics of Russian statehood. According to the Office for Migration of Sughd region, only in northern Tajikistan, officially the number of migrant workers decreased by 27 thousand people per year as of January 1, 2015. Non-official data can be several times higher.
No reasons to worry yet
The total length of the border of Tajikistan and Kyrgyzstan is 971 km. Most of the border is impassable areas in mountain ranges. There are three highways connecting the two countries, Osh – Murgab-Khorog, Isfana-Sarytash-Jirgital, Batken-Isfara- Khujand. The main transport artery through which the freight transportation is implemented is  the highway of Batken-Isfara-Khujand.
Residents of border regions of Tajikistan were anxiously awaiting the first steps to tighten the rules of crossing the border, the movement of goods, but after one and a half months since the date of the Kyrgyz Republic’s accession to the Customs Union, everything remains the same. Perhaps, this is due to the fact that the EEU does not consider appropriate the reconstruction of checkpoints on the Kyrgyz-Tajik border, taking into account the imminent membership Tajikistan in the organization.
The only noticeable change is a rise in prices for gasoline and diesel fuel in the Kyrgyz gas stations along the border, which caused an increase in fuel prices in Tajikistan, too. Analysts attribute this trend to the more stringent control over the possible re-export to Tajikistan, which, in view of the large number of bypass roads, continues through smuggling.
Requirements on the movement of livestock have somewhat been tightened, however, there are no restrictions concerning the transport of fruit and vegetables, which are one of the main export items of Sughd region. And the reason is also understandable: it is also more necessary for Russia, experiencing a certain shortage of goods in connection with responses to Western sanctions.
Losses and gains from membership in the EEU
Tajikistan when joining the EEU could get all the benefits that Kyrgyzstan is going to get. Both countries have roughly the same geographical location, similar economic conditions, and approximately equal potential. For Tajikistan, more dependent on economic relations with Russia, transport links connecting the country with Russia are important. Solving the problem of free movement of goods could create good prospects for economic development. Another important factor may be the free movement of labor.
We know that monetary incomes of migrant workers from Tajikistan are equal to almost half of the country’s GDP. They tend to decrease, as a result of the tightening of the rules of stay of foreign citizens in the Russian Federation, which touched the citizens of Tajikistan, as well as of the devaluation of the Russian ruble. According to the National Bank of Tajikistan, in 2014, remittances to the republic from the CIS countries decreased by 8.3% to $ 3.9 billion. Projections of the main financial institution for 2015 are disappointing. Falling of the remittances by the end of the year may reach 30%. It is possible that about the same rate of reduction will have be among the revenues of migrant workers due to the devaluation of the Russian ruble and the reduced flow of migrant workers.
Timely further reform of the agricultural sector, followed by the transfer of land in usufruct to the peasantry in Sughd somewhat reduced social tension in the country’s northern region. However, the measures alone in the agricultural sector is not enough, to prepare in the future the conditions for the creation of decent jobs for approximately one million citizens throughout the country. Refusal of membership in the EEU could lead to a further increase in the dynamics of reducing the number of labor migrants in Russia and, therefore, more falling incomes. Given the lack of jobs in the republic, it can lead to growing discontent among the population, which will become a trump card in the hands of those who are ready to destabilize the political situation in the country.
There is no doubt that membership in the EEU will be beneficial to the public, but not to the state treasury. The state budget of Tajikistan, formed mainly by taxes, can lose a lot as a result of harmonization of taxes in the EEU, that will not work in the conditions of Tajikistan’s economy. Tajikistan will lose also in dividing the income from customs duties which will be taken by the tax authorities of the Russian Federation due to the movement of imports from other countries. Tajikistan will receive tax revenues in the form of customs duties of approximately the same amount of revenue that Kyrgyzstan can get – 1.9%, maybe a little more – 2%, because GDP of the two republics is on the same level.
No less important for the country is the problem of protecting its borders due to the increasing threats on the border with Afghanistan. Although the country is a member of the Collective Security Treaty Organization, this fact cannot guarantee the protection of borders from possible intrusion of forces having a plan to create a caliphate in Central Asia. Membership in the EEU can give further assistance in strengthening the borders of the country.
However, the following questions remain unanswered. Would not the EEU become a politicized organization in the future? Will the country preserve its sovereignty? Will not dynamically developing relations with other great powers, the US, China, India, Iran suffer after the accession to the EEU? Will not the republic turn into a hotbed of opposition in the beginning new “cold war” between the West and Russia? How to solve many issues related to poverty reduction, development of rural infrastructure, agricultural sector, which the country has so far successfully solved with the help of the EU and the US?
In short, it is a double-edged sword. The best option is to be in the middle. But it is hardly possible.
Doctor of Economics, Rector of Khujand State University Anvar Maksudov thinks that Russia has more leverage on the republic.
“It may be dragged in the EEU. Otherwise, a number of levers may be switched on that will inevitably lead to the destabilization of the political situation. Although there is no guarantee that there will be no other provocations when entering the EEU. But it may already be the work of other great powers”, said Maksudov.
Recommendations:
So, what the official Dushanbe can do?
1. Tajikistan should not rush to join in the EEU. It should examine the development of the situation in Armenia and Kyrgyzstan the most attentively. After all, Armenia has just adopted he first decisions on the alignment of prices for utilities, and social protests broke out and gripped the entire country. We must remember that open antisocial measures pose a threat. For this time, it will touch everyone – doctors, teachers, and retirees.
2. It is known that Kyrgyzstan has received certain privileges in the negotiations, when the decision was made on membership of the EEU in the form of a preparatory period for three years, allowing a soft entry into the Union. This means that scientists, who know the market economy, recognized experts, real patriots who cherish national interests should participate in negotiations with Russia, together with government officials, most of whom do not have deep economic knowledge and expertise, in particular, good knowledge of the Russian language. The government should have a great team for this work.
3. One of the possible benefits should be compensation for losses in the state budget when entering the EEU. Kyrgyzstan was able to get the amount of 200 million dollars. Possible losses of the budget of Tajikistan may be larger. Tajikistan in no case should lose the possibility of financing such areas as education and medicine. Damage in this category of people can cause irreparable damage to the people barely surviving in a market sectors, especially the social sphere.
4. In the course of negotiations with the Russian side, Tajikistan should hold the position of Kazakhstan and Belarus on the establishment of political institutions of the EEU. They should not have broad powers in the management of the Union, but should be, where possible, advisory. Otherwise, the big countries will “crush” small countries. Fortunately, there is an experience of the European Union today with emerging problems.

5. And finally. The country’s leaders should be most concerned about their own labor migrants. If we are talking about free movement of labor, there should not be any obstacles. This regime should be simple and liberal, similar to the rules of movement in the EU.\

Negmatullo Mirsaidov, journalist-analyst
The views of the author do not necessarily represent those of CABAR

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