21 Nov 2011

Kazakh President Nursultan Nazarbayev: We will approach creation of single Eurasian community in 2015

Kazakh President Nursultan Nazarbayev has given an interview to Interfax and RIA Novosti following the signing of integration documents by Russian, Kazakh and Belarussian presidents, in which he speaks about Eurasian integration, Kazakh-Russian relations, as well as the Syrian and Iranian problems.

Question: First of all, we would like to congratulate you, Nursultan Abishevich, on implementing the ideas and proposals that you voiced back in the early 1990s. In your opinion, what should be done to avoid the mistakes made when supranational structures were formed in the Soviet era and the CIS?

Answer: It is common knowledge that ideas are always ahead of their time. A famous classic said that an idea must overwhelm the masses to be implemented. Probably, after the dissolution of the Soviet Union every state needed time to feel its independence, to turn back and understand what its interests were and how to develop further.
In the present-day globalizing world, it is impossible to imagine any state limited to its own borders. I believe that is a blind alley and means stagnation. The world has 240 integration associations with the European Union, NATO, SCO, APEC the largest - and now we add the Customs Union and the Common Economic Space.
Five years have passed since I expressed the idea at Moscow State University. The elites of our countries didn‘t support the idea then, although the people have always supported it. The idea was in the air, everybody was talking about it. And here it is, finally implemented.
I must say directly that this has been possible with active support from Russian President Dmitry Medvedev.
And secondly, in 2005, when Vladimir Putin was president, we agreed in Sochi to establish the Customs Union. We did in five years what it took the EU 40 to do. Having passed and ratified a vast number of laws, we are switching to the integration stage now. This is the Common Economic Space.
We approved 17 understandings, the implementation of which will create the conditions for establishing the Eurasian Economic Community. A law on harmonizing macroeconomic indicators remains to be passed. It will apply to the size of the government debt, the inflation rate, the unemployment rate, etc
Moreover, one will have to agree on common tariffs: for railroad, oil pipelines, and electric power lines. This will be completed by 2015, when we approach the creation of the Eurasian Union. As you can see, just three states had the political will to create a union that we need.

Q.: Does the EU serve as an example for the Eurasian Union? Is the EU interested in cooperating with the new structure in the post-Soviet space?

A.: There are different opinions. Putin has repeatedly spoken, for example, about integration from Vancouver to Vladivostok, meaning the whole post-Soviet space. Zbigniew Brzezinski supported the idea at the Yaroslavl forum that one can do without us.
My personal opinion is that the European Union should be interested in cooperating with us, with the Common Economic Space or the Eurasian Economic Union that we are building, because it is from here that Europe is getting its energy resources.
Everything depends on the will of European leaders. I am convinced that the future of Europe lies in cooperating with our Eurasian Union.

Q.: Could you tell us what currency the Eurasian Economic Union will use?

A.: We have not discussed that. In general, any union starts with a free trade zone, customs union, and common economic space followed by an economic union that may introduce a payment unit, not a currency. Do you remember the ECU, the European Currency Unit? Only then we will be at the stage to approach this matter.
First one has to create an economic space, the Eurasian Economic Union and then we will think. But now the foundation is laid for trade, for large trading positions, in rubles and tenge, not [U.S.] dollars. We [together with the Russian and Belarusian presidents] visited VTB bank.
We were told that VTB bank handles 600-800 million Kazakh tenge daily, in other words tenge comes second only after ruble. In our mutual trade, we need to use either the ruble or tenge, and skip purchasing dollars to settle accounts.
This is the first step. We must prove that our economic space and union is advantageous and equal, and the issue of a single currency will come to the front.
I believe that none of the national currencies, including, of course, the powerful ruble, will do. It must be another currency with a new name.

Q.: What about political changes in Kazakhstan? What is the snap parliamentary election is related to?

A.: A lot of events have happened in the country‘s political life this year. You remember that there was an initiative that came from the bottom to hold a referendum on extending my powers. I thanked all residents of Kazakhstan, but I did not go to the referendum. The presidential election took place on April 3. You remember the results vividly. Some members of parliament said that dissolution was desirable. The main argument is that the amendments to the Constitution say there should be at least two parties in parliament.
Now the ruling Nur Otan party [led by Nazarbayev] of course represents various political movements, but one party dominates. A new election is required to implement the constitutional provision on the multiparty parliament. This is the first argument.
The second argument: we all read and see that the second wave of the crisis is coming. We can feel this through our own skin. Probably nothing will happen, because when no one was speaking about it, it came unexpectedly, and when one is talking nothing happens. But in fact we can see that in Europe, other countries, the United States, a crisis is quite possible. Parliamentarians said that in 2012 we should not be distracted by elections but do business.
Thirdly, Kazakhstan is implementing a powerful program of industrialization. Some 350 enterprises will be launched in just two years. The processing industry has started to dominate, its products are exported. This is a great work for the whole country, every citizen. It is for the implementation of this program that parliamentarians think that new people must come to parliament and make new laws. I could not fail to agree with this.
I took these arguments. According to the Constitution, the president has the right to do this in agreement with the parliament‘s leaders. Such a decision was made. I think this is normal, constitutional and legitimate.

Q.: Russia has joined the WTO before Kazakhstan, One failed to synchronize the entry of two our countries to the WTO. Will this impact bilateral relations and integration processes?

A.: We‘ve already finished negotiations with all countries [WTO members], a year is left. I also think that Kazakhstan will be part of the WTO at the end of 2012. We did not join together, however, there is no such a precedent. One cannot join the WTO collectively. For us, Kazakhstan, it is very important that Russia entered first because all of our transport corridors to Europe go through Russia. That is why I think that this is normal.
Secondly, we agreed altogether [Kazakhstan, Russia and Belarus]. Today an agreement was signed between Kazakhstan and Russia through which Russia, having joined, will support our WTO accession in all areas.
And we will join on conditions more favorable than for Russia, bargaining higher tariffs than those applicable now. I believe that Kazakhstan‘s entry into the WTO after Russia would be reasonable. This, by the way, will in no way influence our Customs Union.

Q.: What is you attitude to prospects of SCO enlargement, in particular Iran‘s request to join the organization?

A.: Today six countries are either observers or partners of the Shanghai Cooperation Organization, in particular those are Iran, India, Afghanistan and Pakistan.
I support the idea of taking both India and Pakistan and later probably Iran. You know the political problems that exist on all these tracks. In principle, I personally am not against the expansion of the SCO, but such decisions are made together by all member countries.
We celebrated the 10th anniversary of the SCO in Astana. We spoke about it, about the conditions for accepting new members in the organization. There are certain conditions. We want the organization to be strong.

Many want. And the U.S. wants to be an observer. But this is decided by all member states.

Q.: What are the reasons of the so-called ‘Arab spring‘ that led to regime changes in a number of North African and Middle East countries?

A.: We could see a wave of anti-governmental riots in North Africa, the U.S., United Kingdom, Europe. These are all matters concerning justice. We hear two words - ‘freedom‘ and ‘justice.‘. Clearly freedom is a good thing, it is necessary, we won‘t forget about it. But it is a question of justice. The gap between the very rich and very poor is deepening. The crisis has unveiled another big difference between these notions. The deterioration of living standards after the crisis in Europe and North Africa served as a catalyst for such actions. Therefore, the question of social justice, the question of rising living standards, turning the economy in this very direction - that is what I find the most important thing now.
Terrorism is on the rise in the whole world. And such events have taken place in Kazakhstan. They don‘t have any organized roots, though. We had something like the Norwegian case when one person, plainly speaking a criminal, decided to kill people and then kill himself.
The investigation revealed that we faced such a thing. There is no frontline to terrorism, and all countries should be fighting the evil together.

Q.: The West has been talking about sanctions against Syria more often lately. Could you comment on this?

A.: Regretfully, we have witnessed the fact when the UN made a decision - to watch. In fact this resulted in the fact that they attacked and Gaddhafi was murdered. I‘m not a Gaddahfi supporter, I‘m not going to protect him, but this looks like a distortion of the Security Council decision, and its powers were exceeded. And this resulted in interference in the domestic affairs of another country.
This shows that such things cannot be applied to another independent state such as Syria. The international community knows what is happening there, people are dying there, a great number of people are suffering. I think we should work on that.
Today, Kazakhstan presides over the Organization of Islamic Cooperation, and we are also working. We will chair an OIC session which will also discuss this issue.

Q.: In connection with this, we would like to learn about your attitude to the West‘s attempts to introduce sanctions against Tehran.

A.: Plenty of sanctions have been applied to Iran, however, Iran continues living and working. As for the Iranian nuclear program, I am a supporter of continuing diplomatic work in this respect.
If we speak of the Iranian nuclear program why didn‘t we speak of it when Pakistan developed nuclear arms? Why aren‘t we speaking of Israel that actually has nuclear arms? No restrictions, no international treaties were applied. One should not approach things so asymmetrically.
Iran claims that it has a peaceful nuclear program. It says that everything can be checked and lets the IAEA in.
Recently, the IAEA said that everything was alright there. Now, the IAEA says that they have some hidden things. All this arouses doubts. Therefore, the negotiating process should continue. One should demand that Iran allow IAEA inspectors into all its facilities and that it should demonstrate to the world that it is really engaged in peaceful nuclear work.
I believe that there cannot be any use of force to resolve the problem because it is wrought with stormy developments for the whole world and primarily for Iran.

Q.: Russia and Kazakhstan are powerful energy states. Are Russia and Kazakhstan competitors or allies on the energy market?

A.: Russia is an enormous oil and gas powerhouse. Russia produces 500 million tonnes of oil, and around the same amount of gas in billions of cubic meters. Kazakhstan produced 20 million tonnes 20 years ago. Now, it produces 80 million tonnes. Russia produces 530 bcm or 540 bcm. We now produce 25 bcm [of gas]. We will reach 100 bcm by 2020. Therefore, I, for one, still don‘t sense any competition.
We will use Russian gas pipelines. We sell at the border. Russia then transports the gas onward. Furthermore, we have routes to China for both gas and oil. Therefore, in order to compete, we would have already thwarted each other and closed markets. This hasn‘t happened.
However, the two states produce the same products. And this is now more largely felt for wheat in this fertile year. We are now experiencing a deficit in transport for moving goods to export markets. So is Russia. Here, we don‘t have enough Russo-Kazakh grain transport. That‘s how it is.
Now with a Common Economic Space, macroeconomic and non-macroeconomic figures will be agreed upon. I think that we will find a balance of interests for both states. There won‘t be a competition

Q.: Which gas transportation route, Central Asia - Center pipeline and the Trans-Caspian pipeline, is a priority for Kazakhstan?

A.: I call the Trans-Caspian route the North Caspian. Today the core volume of oil is over 60 million tones, 45 million tonnes of which Kazakhstan exports though Russian systems: from Atyrau through Novorossiisk and Samara to the Baltic region.
Moreover, we built an oil pipeline to China. This is 2,500 kilometers long. The gas pipeline went though Turkmenistan.
Kazakhstan cooperates with Russia on gas. The Central Asia - Center pipeline goes through Kazakhstan, and Central Asia - Urals [pipeline] through Kazakhstan as well. Turkmen and Uzbek gas goes through Kazakhstan. We fully cooperate with Russia, we have an agreement. Kazakh gas also goes through.
The issue is as follows: each state and economic interest is a priority. If it is advantageous to transport thorough Russia, we will do it through Russia. If this becomes disadvantageous in terms of price, we will pump gas to China.

Q.: Are there plans to build a pipeline to China?

A.: We have already been building it. From the Caspian Sea to South Kazakhstan which connects to an existing pipeline. Turkmenistan, Uzbekistan, then it passes Kazakhstan. The largest stretch, 1,300 kilometers, runs through Kazakhstan.

Q.: What is the future of the Trans-Caspian gas pipeline from Turkmenistan to Azerbaijan, bypassing Russia?

A.: This prospect is very hazy. This is still in the discussion phase. It has been going on for many years. This is Nabucco, there are other names. The issue is about laying a gas pipeline on the floor of the Caspian Sea to Baku, and farther to Ceyhan. The issues is yet undecided.
Russia‘s has an interest in letting Turkmen gas flow through Russia, what has been suspended recently for reasons incomprehensible for me. I think that Turkmenistan did not object. Why? I cannot tell you for sure, but in fact it now does not give its gas to Russia‘s gas transportation system. Now a gas pipeline with a capacity of 30-40 billion cubic meters from Turkmenistan via Kazakhstan to China has been built. I know that Turkmenistan is working on going through Afghanistan and Pakistan. They have even signed a protocol of intent despite the difficulties.
You know it is easy to accuse one of bypassing Russia. No one is going to do it. I can recall a story of Kazakh oil, when I was to agree on the North Caspian oil pipeline to Novorossiisk for four or five years. This was in the times of the now late Yeltsin and Chernomyrdin. I was proving that Russia was losing $1.5 billion on transportation. We resolved this issue four or five years later. We said then that Kazakhstan will go to Baku-Ceyhan, we built a port there and started to bring oil to Baku by tankers.
That is why the Customs Union, the economic space will resolve such issues.

Q.: The unsuccessful talks on the modernization of the USSR are turning 20 the other day. The next date is 20th anniversary of the CIS. You were involved in these processes.

A.: Let‘s not speak about the dissolution of the USSR. A lot has been said. This is a separate issue. I have something to say. I read and listen to everything written in memoirs, everyone tries to highlight his role. That is why I do not write and do not speak about this subject. Different people have different attitudes. Dissolved, destroyed like broken dishes into tiny pieces. That was a great collapse. A real disaster for all the countries. All ties were torn. The economy stopped. Unemployment, no electric power, nothing of this, nothing of that.
I proposed forming a Commonwealth of Independent States in these conditions. If you remember, this happened in Almaty on December 21, 1991. Nine states took part, then two more joined. You know what happened to the CIS later. I called for making the CIS normal from the very first day. Gradually some left it, others were just present as participants.
That is why again I proposed the Eurasian Union, Eurasian cooperation, tighter integration. There is EurAsEC. So our further development will depend on what we have done today.
The Common Economic Space takes effect on January 1, 2012. The process will end in 2014-2015. We have yet to agree on the movement of capital, goods, services, tariffs, railroad and then pipeline tariffs. All that will be completed in 2015. We will say then that the Common Economic Space will have been accomplished, now we will switch to the Eurasian Economic Union. Here is the story.
I thanked [Russian President Dmitry] Medvedev, for we have gathered to announced this important decision. Russia‘s role was very important.
I would like to say one more thing. Russia is now facing a large scale and difficult election campaign, first the State Duma election then the presidential election.
I would like to note that Kazakhstan will respect the choice of the Russian people, we are committed to cooperation with Russia on various tracks.
It is appealing that Putin was nominated for the presidency. We remember the year 2000 when he came to power. Russia was on the brink of dissolution and civil war. Putin managed to restore order. I think that Medvedev showed political wisdom as well. Stability in Russia is very important. It is not the right time for disputes in the tandem.
I think that both politicians showed great courage. They sacrificed their own ambitions for the interests of Russia and the Russian people. I wish them great success and prosperity in Russia.