KZBlog

Rosbalt, a Russian business news site, is reporting that due to the customs union which will be adapted on 1 Jan 2010, Kazakhstan will correct 50% of customs tariffs [RU]. The article is short so I’ll reproduce it here, in my translation.

In preparation for the work of the Customs Union (Russia, Belarus and Kazakhstan), the largest number of adjustments of the tariffs will have to be made by Kazakhstan. Andrey Tochin, representative of the Ministry of Economic Development of Russia to the Commission on the Customs Union, reported this to a correspondent of Rosbalt.

“Regading Kazakhstan, they will have to change half of their tariffs. 40% of these adjustments will mean an increase in prices”, noted Tochin. In his opinion, this is the way to create preferential conditions for Russian goods in Kazakhstan.

According to Tochin, 80% of the unified customs tariffs which were approved on 27 November by the heads of state [of Kazakhstan, Russia and Belarus] in Minsk are in agreement with Russian policy. Therefore, Russia will not have to make large adjustments. “Only 10% of the current rates will be changed. Most of them will be decreased,” noted the official.

Belarus will also have to make minor adjustments in its tariffs. But a spokesman for the Ministry did not specify what will these changes.

So 1) Russia is announcing what Kazakhstan will do and 2) this is being reported in Russian newspapers but seems to get scant attention in the Kazakhstany press (as far as I can see, except for a vague statement by the Minister of the Economy that I wrote about here). And 3) Russian policy is being followed 80% of the time and 4) prices are going up again! Oh, and 5) Russian officials are stating baldly that these moves are good for Russian products, not good for all three nations.

It seems very strange that Kazakhstan and Belarus are entering a union the terms of which are being set by Moscow in order to benefit Russia. Now I’m not an economist, but I am not looking forward to the market being flooded with Russian goods and imported goods becoming more expensive. I need my macaroni and cheese and my books in English, people!

In all seriousness, as I glance around my home, most of the food and everyday household goods we buy was manufactured in Kazakhstan or Russia (including a lot of foreign brands). But most everything else came from somewhere else, from the furniture to the pens to the appliances. I’m not clear on how this will improve the quality of our life, and I’m not sure that Kazakhstani companies will benefit since it seems to me that people in Kazakhstan already buy a lot of goods that were made in Russia, so I don’t see that Russians will start buying Kazakhstan goods.

I’d love to hear in the comments what others think about this union, and if anyone has lived in Russia, are Kazakhstan-made goods bought there? Are our companies competitive?