Cooperation in Greater Eurasia: experience of developing production chains in the EAEU, SCO, and BRICS

4 September 2024

Cooperation in Greater Eurasia: experience of developing production chains in the EAEU, SCO, and BRICS

The economy of the Eurasian Economic Union (EAEU) is rapidly developing amidst global transformations. Strengthening production ties and cooperation between the countries of the region significantly enhances resilience to economic challenges. Simultaneously, the joint efforts of BRICS, SCO, and EAEU countries are opening new opportunities for trade and interaction. However, insufficient logistics and the absence of unified transport corridors complicate international exchanges. To overcome these problems, it is necessary to create an independent payment platform and similar tools for trade financing. Additionally, outdated legislation requires updating. These conclusions were reached by participants of the session entitled Cooperation in Greater Eurasia: Experience of Developing Production Chains in the EAEU, SCO, and BRICS, held as part of the Eastern Economic Forum.

Key conclusions

The EAEU is developing dynamically

“Today we can confidently state that the Eurasian Economic Union has proven itself as an effective integration body. The creation of the union was the result of a joint search for a format and direction of mutually beneficial cooperation, within which member states united the potential of their national economies for the sake of sustainable development. The union has also demonstrated its effectiveness in light of new geopolitical realities and continues to develop dynamically amidst global economic transformation,” Gohar Barseghyan, Member of the Board (Minister) for Industry and Agro-Industrial Complex, Eurasian Economic Commission.

“The EAEU is not only a dynamically developing international organization but also one with its own unique experience in fostering cooperation in various spheres,” Sergey Mikhnevich, Executive Secretary, Member of the Presidium, EAEU Business Council.

Cooperation between the EAEU, SCO, and BRICS countries holds significant potential for creating production chains

“Participation in the regional groupings of the Eurasian Economic Union, SCO, and BRICS signals the increasing importance of economic cooperation. Such collaboration promotes trade and regional development. Changes in a productive direction indicate that each of these groups is fulfilling key tasks, despite challenges, and ensures the realization of the potential that exists in the regions, as well as ensuring the sustainability of their countries’ development,” Charlie Than, Union Minister of the Republic of Myanmar.

“In 2023, the volume of international freight traffic we handled was 1.5 billion tonnes, one third of which was international transportation. This is a huge volume – 551 million tonnes, with 196 million tonnes being transported to BRICS countries. Of course, the main destinations are China, the UAE, and India. We also set a record in freight traffic with the EAEU countries. As for this year, in the first 8 months alone, we transported 864,000 containers, a 66% increase over the previous year. Together with our partners in the EAEU, SCO, and BRICS, we are forming additional export and import routes and developing new logistical solutions,” Sergey Pavlov, First Deputy Managing Director, Russian Railways.

Problems

Contradictions in the labour market and imperfections of global markets

“It is particularly evident what contradictions arise in the labour market. Kyrgyzstan, one of the main suppliers of labour to the Russian market, is a member of the Eurasian Economic Union and is subject to the laws of the Russian Federation. Meanwhile, we had to adopt many laws concerning Uzbekistan and Tajikistan, which have caused significant conflict of interest in our society between the national and regional labour markets, not to mention the global labour market. These contradictions have to be resolved while considering the needs of our citizens,” Leonid Kalashnikov, Chairman of the Committee of the State Duma of the Federal Assembly of the Russian Federation for the Commonwealth of Independent States, Eurasian Integration and Relations with Compatriots.

“In the era of globalization, no one doubted that if a country lacked something, it could be procured on the vast global market by placing orders at factories and enterprises on the other side of the world. But today, we live in conditions where this kind of global cooperation is becoming increasingly difficult. When we speak of growing state protectionism, we must remember that it is a forced necessity, partly due to external pressures,” Dmitry Volvach, Deputy Minister of Economic Development of the Russian Federation.

The impact of sanctions on economic relations between business representatives

“Rail transport is a unifying factor. You know how many challenges we faced this year and last year when payment systems changed or were shut down. But rail transport never stopped for a single day. All our border crossings and relations with colleagues with whom we have rail connections, I emphasize, all of them, never ceased to function and continue to operate,” Sergey Pavlov, First Deputy Managing Director, Russian Railways.

“Unfair competition, the dominance of the dollar, and unfriendly currencies are limiting the possibilities for cooperative and integrative relations, within which the Russian Federation conducts its foreign trade and economic activities. This is a serious restraining factor. Over the past years, we have learned how to bypass all sanctions – illegal and in violation of international law. Nevertheless, we must admit that it remains a serious limiting factor,” Sergey Ryabukhin, First Deputy Chairman of the Committee of the Council of the Federation of the Federal Assembly of the Russian Federation on Budget and Financial Markets.

Solutions

Strengthening cooperation between entrepreneurs through new information platforms

“There is potential: we must support and expand the connections between our entrepreneurs and businesspeople. The more enterprises and organizations participate in the work supported by coordinated actions of their governments, the friendlier the environment will be. We see that progress in innovation helps us better realize the potential that exists in our region,” Charlie Than, Union Minister of the Republic of Myanmar.

“Another area is addressing information gaps and building trust between economic operators in participating countries. This involves not only information exchange but also the creation of information platforms that provide insight into the regulatory frameworks for attracting investment in each country. It could involve creating a shared database of projects and tasks in which companies from our countries are interested. This information could be provided by leading business associations and organizations such as the business councils of SCO, BRICS, and EAEU,” Alexander Shokhin, President, Russian Union of Industrialists and Entrepreneurs.

Ensuring stable economic ties between countries more actively

“We need to work together more actively on establishing an independent payment platform. This work has already begun within BRICS. It is important to understand that absolutely all business entities in all the member countries of the groups we are discussing today are interested in this. It will ensure the independence of trade transactions, both in terms of the transfer of funds for these transactions and in terms of shielding them from interference by other companies that are not interested in the development of our cooperation,” Roman Chekushov, State Secretary – Deputy Minister of Industry and Trade of the Russian Federation.

“What do we need to do? The stability of economic ties with our closest regional partners is the foundation for continued growth and development. <…> We must also not overlook the use of modern technologies to promote cooperative development. We have the EAEU industrialization map. I would like it to shift from an informational tool to a proactive one. We will continue to work on this,” Dmitry Volvach, Deputy Minister of Economic Development of the Russian Federation.

*This is a translation of material that was originally generated in Russian using artificial intelligence.

For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en

Cooperation in Greater Eurasia: experience of developing production chains in the EAEU, SCO, and BRICS

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