Economic Relations between Kazakhstan and Russia

import and export commodities, favoring long-term agreements on their

purchase/selling over one-off deals.

In the medium-term perspective, transition should be effected from

restrictive policies to encouragement, consistently facilitating the

formation of a progressive, structure of exports and creating a

corresponding system of its state support.

Analysis of export/import operations of foreign trade companies and

enterprises shows that, in the absence of combined controls over exports

and currency and of an obligatory norm of currency sales, 1 all export

earnings reach the republic. According to Kazakhstan specialists

calculations, some $0.6-0.8 billion end up on the accounts of Kazakhstan

enterprises in the countries of near and far abroad. According to Russian

experts, corresponding figures for Russia range from $5 to $17 billion. In

this connection, one of the main tasks of management of foreign trade

activities of the two states is the setting up of systems of customs

control over export and import contracts and banking control over currency

earnings, investments, and other commodities.

In future, it is advisable to step up coordination of information

systems of control over repatriation of currency earnings by the customs

bodies and the banking system, which will permit a concentration of efforts

on securing maximum currency earnings from exports.

It is advisable to restrict the decisive role of the state in foreign

economic activity to internationally recognized standards, to be

implemented in accordance with the rules and norms of the World Trade

Organization.

It is also advisable, in a situation of considerable reduction of the

share of state property, to export and import commodities in state

interests only within the framework of intergovernmental agreements, which

must not include any privileges or tax or duty exemptions. For this

purpose, the possibility is created for domestic purchases on a competitive

basis.

The state policy of selective protection in relation to promising

exporting industries and conquering foreign markets gradually becomes one

of the main priorities of economic policy as a whole; it is called, upon to

prepare the implementation of a really proactive export policy, without

which it is impossible to ensure either the payment of foreign debts, or

internal financial stabilization, or investment activity and employment.

Another important task is the achievement of favorable trading

procedures-in relations with foreign countries and their trade and economic

groups, organizations, and unions, as well as the lifting of existing

discriminatory restrictions, and prevention of new ones, with regard to the

member states of the customs union.

To solve this task, plans are made to work consistently and

purposefully toward the entry of Kazakhstan and Russia in the World Trade

Organization, to harmonize our countries' legislative systems with

international norms and principles, and to implement the agreement on

partnership and cooperation with the European Union and agreements with

other countries.

Formation of new economic relations with states of the near abroad will

require a longer that previously believed period of time and a gradual and

coordinated advance toward generally accepted international norms of

organization.

The future economic policy of Kazakhstan in relation to Russia and the

countries of the near abroad must have the following goals development and

rationalization of cooperative economic links in terms of minimizing

expenditure and increasing competitiveness;

— The utilization of transit communications serving the export/import

commodity flows from Customs Union members to third countries;

— Cooperation and coordination of CIS countries' efforts in the

restructuring of production and in optimizing the distribution of

production forces. An active economic policy in relation to countries of

the near abroad is seen as one of the levers for the rehabilitation of the

economy and creating conditions for its upward swing.

Particularly important in the economic relations of Kazakhstan and

Russia is the creation of conditions for establishing horizontal links

between agents operating on the market, the use of new forms of economic

cooperation, such as joint ventures, transnational production, commercial,

and financial structures, and of financial-industrial groups.

Thus the entire course of economic cooperation between Kazakhstan and

Russia and its present state show that there is no alternative to close,

mutually advantageous, and constructive relations between the two

countries. As the two largest countries of post-Soviet space possessing

great natural resources, production potential, and a desire for

cooperation, Kazakhstan and Russia are quite capable of solving the tasks

they face in reforming the economy and achieving the level of economically

developed countries.

Present-day economic science and practice show that economic

integration is the absolute imperative of the future.

CONCLUSION

The analysis, in terms of history and political science, of the birth

and development of new, sovereign states at the end of the 20th century,

considered here in dynamic interaction with the development of other

states, leads us to a number of significant conclusions.

The formation of interstate relations between the Republic of

Kazakhstan and the Russian Federation is an example of synthesis of mutual

relations between two equal agents of international law. Considering the

unique situation and the entire context of ongoing processes, these

relations may be seen as a considerable contribution to the world political

and juridical experience.

An in-depth analysis of the causes of the disintegration of the USSR

was not the goal of the present study; besides, as President Nazarbayev

pointed out, it is difficult and even practically impossible to understand

everything that is connected with this event, which had such stupendous

consequences. However, it is possible to outline the objective and

subjective characteristics of this historical event.

Among the objective factors, economic causes must above all be pointed out.

The rigidly conservative plan-and-command system of the country's economy,

carrying the unbearable burden of the military-industrial complex and

serious structural unbalance, could not meet the real challenges of the

present level of development of the world economy - the postindustrial

resource- and energy-saving revamping of the economy and a breakthrough in

information technology. The inevitable nationality problems that

accumulated in the ethnically diverse Soviet Union called for considerable

attention and timely response to the challenges in this area. Perestroika

suddenly made these challenges topical almost overnight, but it couldn't

provide an adequate solution of the problems within the framework of a

unified state structure. The Novo-Ogarevo project proved Utopian in view of

its goal of achieving a consensus among nearly forty of its participants.

It is no secret that Russia played an integrative role, being a kind

of backbone in the genesis and architecture of the unitary state.

Considering its actual political and economic weight as the most powerful

republic of the Union, it is easy to understand the centrifugal effect of

the separation of the Russian Communist Party from the Communist Party of

the Soviet Union and the subsequent declaration of the sovereignty and

independence of the Russian Federation.

Among other factors, the subjective element also played a role in the

disintegration of the USSR. This element could be analyzed in terms of

persons and situations, but this is not of the greatest importance for the

purposes of the present study.

The dialectical development of Kazakhstani-Russian relations in the

process of the sovereignty of Kazakhstan showed the correctness of the view

of this process as a consequence of the disintegration of the USSR and

subsequent objective course of events in the post-Soviet space. It is

important to stress, in the context of our study, the consistent efforts of

President Nazarbayev of Kazakhstan aimed at developing integrative

processes in the relations between Kazakhstan and Russia and in the

Commonwealth of Independent States.

In turn, the declaration of sovereignty was only the beginning of a

complex process of real sovereignty for the post-Soviet countries. Using

Kazakhstan as a model, we tried to analyze the serious and comprehensive

work that had to be done, and will still have to be done, to achieve a

normal, civilized entry of the Republic in the international community. The

formation of the new Kazakhstan statehood occurred against the background

of an all-round political and economic reform of society. Despite many

complicated and contradictory processes, the country's leadership

endeavored therefore to act on the basis of scientifically well-founded

programs and concepts capable of providing the Kazakhstan is with real

reference points, the nearest tactical goals, and general strategic

objectives in this far from simple transition period.

The instituting of the post of president of the republic, the elections of

the first head of the Kazakhstan state, the constitutional reform, the

formation of a full-fledged parliamentarian system in the country were the

landmarks of the development of Kazakhstan as a sovereign independent

state.

The parliamentary system developed in Kazakhstan as a significant part

of a general political reform; it went through many political conflicts and

problem situations.

The Supreme Soviet of Kazakhstan, consisting of 360 deputies elected in

1990, was far from perfect. It should be remembered, however, that it was

this parliament that adopted the most important state acts on sovereignty,

independence, and the presidency; under this parliament, political reform

began, and new market laws were discussed and adopted. The deputies of this

parliament nurtured the idea of a professional, compact, and effective

highest legislative organ of the country working on a permanent basis.

The first professional parliament of Kazakhstan, numbering 177

deputies, was elected in March 1994. Its fate was contradictory and

dramatic. Though elected for a term of four years, this Supreme Soviet was

not quite ready for routine legislative work; besides, there were

significant violations of procedure during its election, and it was

therefore dissolved on a decision of the Constitutional Court in March

1995.

The country's political parties and movements took an active part in

the elections in December 1995 of a new parliament consisting of two

chambers, the Senate and the Mazhilis. Compact and professional, the new

parliament is, in the view of many jurists and politicians, quite capable

of fruitful legislative work and is absolutely in keeping with the

democratic principle of the division of powers.

The constitutional process in the republic also developed in a dynamic

way. This process consistently, step by step opened up new areas of the

rule of law, which corresponded to the vital periods in the development of

the republic. The path traversed from the first Constitution of sovereign

Kazakhstan, adapted in January 1993, to the Fundamental Law of the country,

adopted at a referendum in August 1995, is the path of progressive dynamic

legislative movement, of which many parameters corresponded to the

standards of developed democratic states.

Decisions on a wide range of problems in interethnic relations, the

dynamics of their development from the Forum of the Peoples of Kazakhstan

and the rise of national-cultural centers to the convocation of the

Assembly of the Peoples of Kazakhstan made it possible to conduct, in this

most difficult period in the building of the Kazakhstan state, all-round

socioeconomic and political reforms largely due to the preservation of

interethnic accord, civic peace, and goodwill of the peoples of Kazakhstan.

There is no need to emphasize the importance of Russia as a magnitude

of world order and Kazakhstan's closest neighbor. It is known all too well

what complex, and at times painful, political, economic, and social

processes took place, and are still taking place, in both states. During

the hundreds of years of cohabitation on vast adjacent territories,

Russians and Kazakhs have accumulated, despite certain differences in their

culture, traditions, and religion, a wealth of experiences in good-

neighborly relations.

The historical community, interdependence, and inter-connectedness of the

two countries' economies form the basis of Kazakhstani-Russian relations.

Of great significance is the geopolitical aspect of the relationship

between Kazakhstan and Russia as the two biggest states of the region,

which largely affects the general climate of the Eurasian subcontinent.

President Nazarbayev repeatedly stressed that Russia is our main

strategic partner, and the special relationship with Russia helps in the

solution of the most important current and long-term tasks in the

development of Kazakhstan. It may be stated today that a qualitatively new

level of relations is now taking shape in the relations between Kazakhstan

and Russia, characterized above all by the beginning of a practical

realization of the high integration potential accumulated in the public

consciousness of the two countries. It is tills area in Kazakhstan's

foreign policy, one that provides the key to the formation of a new shape

of the Kazakhstan state and is closely connected with the policy of

integration, that is an absolute priority for Kazakhstan.

Under the new historical conditions, the stable and dynamic development

of Kazakhstani-Russian relations rests on a serious legal basis. That basis

is the treaty of friendship, cooperation, and mutual assistance between the

Republic of Kazakhstan and the Russian Federation dated May 25, 1992, as

well as treaties and agreements signed in the course of the first official

visit of President Nazarbayev to Russia in March 1994 and his working

meeting with President Yeltsin in January 1995. As a follow-up to these

fundamentally important agreements, a whole series of intergovernmental

documents, agreements, and memorandums were signed which regulate the

relations between concrete ministries and departments.

However, the everyday practical experiences of bilateral cooperation

show that the joint efforts of the two countries must be constantly kept

up. Closer integration, especially in the economy and in the humanitarian

sphere, is necessary in the interests of democratic reform both in

Kazakhstan and in Russia. The process of further elaboration and

coordination of new agreements does not therefore cease. Recent years have

seen continuous meetings of heads of ministries and departments, government

delegations, and groups of experts to consider bilateral issues.

A considerable share of the economic potential of Kazakhstan and Russia

is employed in supporting production in the two countries. In recent years,

integration links have dynamically developed not only on the interstate

level but also between individual regions and enterprises. Besides, our

peoples are linked by centuries-old spiritual and cultural ties, as well as

by kinship and purely human relations, which must be constantly reinforced.

That is why the policy of integration is a principled line of conduct for

Kazakhstan leadership. "On the question of priorities," President

Nazarbayev commented, we must stress the vast importance of relations with

the Russian Federation. The effective factors here are the interdependence

of the economies, historical affinity, and demography. The two countries

are simply doomed to good-neighborly relations and collaboration. This

collaboration must be based on equal rights and mutual advantage, if we

have in mind the strategic goal of consolidating our common economic,

defense, humanitarian, information, and educational space.

Various aspects of economic and financial relations, problems in state

security and military-strategic cooperation, and humanitarian problems may,

as practical experience has shown, be positively resolved only if mutual

interests are taken into account, and if there is a conscious desire for

fruitful and mutually advantageous cooperation.

On March 28, 1994 a package of 23 treaties and agreements were signed,

five of them by the heads of state. These are, above all, the treaties on

further deepening of economic cooperation and integration, on military

cooperation, an agreement on the main principles of using the Baikonur

launching site, and a memorandum on the issues of citizenship and legal

status of citizens of the two countries.

These steps are in keeping with the integration efforts of our states

in the CIS framework, too. The ground has been laid for the economic and

settlement unions, and the Interstate Economic Committee - the Economic

Union's coordinating and executive committee - has begun to operate in

Moscow.

Other agreements, which significantly increase the horizons of

multilateral and bilateral cooperation, also promote the progress of the

Commonwealth toward new integration successes. Apart from the trade and

economic ones, agreements on cooperation in the sphere of defense also

belong here.

While noting the high level and rate of development of Kazakhstani-Russian

relations, it must be said that, both in previous times and nowadays,

unresolved problems naturally remain. There is a certain stage-by-stage

approach in foreign policy due to objective differences between the two

countries in their view of priorities in the phases of declaration,

establishment, and consolidation of sovereignty and independence.

The historical experiences of good-neighborly relations between

Kazakhstan and Russia and the solid relations of strategic partnership in

the present inspire confidence that the peoples of Kazakhstan and Russia

will enter the 21st century in a dignified manner.

LIST OF USED SOURSES

1.Mansurov. T. “Relationship between Kazakhstan and Russia”, 1998, /p.p178-

250/

2. Esengalin. N. “ External Economy” 1999, /p.p 12-45/

3. Peter Bophinger. “Kazakhstan 1993-2000” 2001, /p.p171-184/

4. Luts Hoffmann. “ Kazakhstan During the Transition”1998, /p.p202-235/

5. World Bank “Annual Report” 1998, /p.p 252-259/

6. World Bank “Annual Report” 2000, /p.p153-159/

7. National Agency of Statistics “Semiannually Report”2001 /p.p 159-175/

8. Hella Engerrer “Research of relationship between Kazakhstan and Russia

during the Transition” 1999 /p.p 25-50/

9. Katerina Dittmann “Tendency of Economic Development of Kazakhstan”, 1998

/p.p 89-123/

10. Todaro “Transition in CIS countries 2001 /p.p 25-31/

11. Mishkin “Relation Between Russia and CIS Countries 2001 /p.p 23-30/

12. Krugman “International Economies” 2001/2 /p.p 31-35/

13. EBRD “Annual Economic Report ” 2001, /p.p 123-159/

14. Daniel Gross “Economic Transition in Former Soviet Union” 1995 /p.p 145-

160/

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