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Analysis of Trade and Production Linkages between Border Regions of Russia and Kazakhstan: Impact of Customs Union and Single Economic Space

P. 102-127.
Limonov L. E., Oding N., Kadochnikov Denis, Savulkin Lev, Anisimov Andrey.
The present article, based on the corresponding report CU and cross-border cooperation between Kazakhstan and Russia by the Centre for Integration Studies of the Eurasian Development Bank (EDB) and the International Centre for Social and Economic Research (Leontief Centre) (EDB, 2012a). The complete Russian version of the report contains a full description of the methodology and references. On July 1, 2011, Belarus, Kazakhstan and Russia abolished customs controls at interstate borders within their Customs Union (CU), transferring them to the external borders of the Union, which became the sixth such bloc in the world economy. The three countries’ common customs zone thus began to function in full scale, which created favourable conditions for the development of trade and production ties between border regions in Russia and Kazakhstan. Firstly, this led to a significant simplification of international trade both between Russia and Kazakhstan and between these and other countries. Russian and Kazakh companies got better access to the markets of each other and that of Belarus, as well as to markets outside the CU. Secondly, the transportation time for freight and passengers shortened. Thirdly, new opportunities emerged for the development of multifaceted cooperation ties between Russian and Kazakh companies, which helps establish joint production enterprises and increase the supply of raw materials, components and finished products. Fourthly, favourable conditions were created for the joint operation, modernisation and capacity enhancement of engineering, power supply and transport infrastructures that tie the two countries together. Fifthly, important prerequisites were created for improving the economic climate and the investment attractiveness of the border regions of Russia and Kazakhstan that are viewed as the main ground for deepening the process of integration between the two countries. These prerequisites include, among others, the potentially positive effect of competition between jurisdictions, as the CU makes it possible to choose more favourable conditions for business operations within the common economic area, including better tax conditions. The purpose of this article is to analyse the effects of the Customs Union on economic interaction and production cooperation between the border regions of the Russian Federation and the Republic of Kazakhstan. The article is based on the results of joint research by the EDB Centre for Integration Studies and the Leontief Centre. The authors also used research done by the Kazakhstan branch of Russia’s Institute for Comparative Social Research (CESSI) under a project titled, “The Impact of the Customs Union and the Single Economic Space on the Small and Medium-Sized Business Sector in Kazakhstan’s Regions Bordering Russia.”

В книге

Analysis of Trade and Production Linkages between Border Regions of Russia and Kazakhstan: Impact of Customs Union and Single Economic Space
Almaty: 2013.