Kazakhstan unhappy with the Customs Union

April 22, 2016 18:38

Kazakhstan has blocked the extension of import duties on grain harvesters.

Kazakhstan is increasingly unhappy with the Customs Union (CU). Unlike the Russian and Belarusian economies, the Kazakh economy has no need of protective measures against high-quality imported goods. Kazakhstan may request the revision of some major agreements within the Customs Union framework. Perhaps it will not leave the CU, but it may significantly reduce the pace of integration.

Feeling dissatisfied with the Customs Union, Kazakhstan has blocked the extension of import duties within the CU and replaced them with quotas for the imports of grain harvesters.

Kazakhstan also has complaints about the mechanism of import duties’ distribution within the CU. In 2013, Kazakhstan paid USD 160-170 million more into the CU countries budgets than it received under the agreement on the distribution of import duties in the CU. The only thing that stops Kazakhstan from launching a revision procedure under this agreement is surplus in payments received in 2010 and 2011. It can also raise the issue of consistent surplus of payments to Belarus within the framework of that agreement. One of the major issues for Kazakhstan - oil supply swap agreements between Russia and Kazakhstan - has not been resolved either.

Kazakhstan’s industry structure differs fundamentally to that of both Belarus and Russia. In H1 2013, oil and gas extraction accounted for 51.4 % of the total volume of industrial production in Kazakhstan (in Russia - 23.1 %). Moreover, the share of oil refinery in the economy is insignificant. Kazakh farmers are also unhappy with the quality of equipment produced in Russia and Belarus. In fact, Russian and Belarusian producers are trying to divide the Kazakh market among themselves, limiting access for other competitors.

Kazakhstan sees no more advantages from cooperation within the CU. Kazakh people are unhappy about growing prices due to the closure of borders with China. Poultry producers are unhappy about the dominance of Belarusian and Russian producers, which secretly divided the Kazakh market. There are virtually no joint projects, the few joint ventures which had been planned never started operations, some lack economic feasibility in general. Simultaneously, Russia forces Kazakhstan to impose various restrictions on the imported goods, e.g. the recent situation with Ukraine. Therefore Kazakhstan tries to implement certain measures, which relate to its unhappiness about the CU realm.

Thus, the contradictions between the Customs Union members are growing. The future of the Customs Union will depend on its members’ satisfaction with the performance results. If their dissatisfaction grows, disintegration might start. 

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The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.