Key areas of cooperation within the EAEU

On 14 October, at a meeting of the Supreme Eurasian Economic Council of the President of the Republic of Uzbekistan, Shavkat Mirziyoyev announced a proposal to hold an industrial forum and exhibition “Innoprom – Central Asia” on an annual basis in Uzbekistan with the EAEU member states.

It should be emphasized that this forum is a new regional format of the international industrial exhibition “Innoprom-2021”, which was first held on 5-7 April 2021 in Uzbekistan. More than 1.1 thousand enterprises from 20 countries of the world, including Russia, Armenia, Belarus, Germany, Kazakhstan, Kyrgyzstan, France, Czech Republic, and Japan, took part in it. The main sections of the exhibition were mechanical engineering, energy, metallurgy, chemical industry, pharmaceuticals and medicine. 

The high efficiency of the Innoprom forum was confirmed by the signing of over 20 agreements worth more than US$130 million, as well as the achievement of agreements on the implementation of about 33 projects involving Russian investments worth US$2.2 billion.

Against the background of the fact that today industrial cooperation has become one of the main instruments of economic development, the industrial forum and exhibition “Innoprom – Central Asia” is of particular importance in establishing direct interaction between companies of the Central Asian region with Russia, creating new production chains.

In this context, it should be noted that, within the framework of the industrial policy of the EAEU countries, work is underway to create and develop mechanisms for cooperation ties, financial instruments to stimulate joint projects and eliminate barriers in mutual trade in industrial goods, conditions for import substitution, localization of production and accelerate industrial integration, new high-tech industries.

Historically established economic ties of Uzbekistan with the EAEU states, implying further maintenance of industrial ties and strengthening of cooperation with these countries, actualizes the issue of interaction between the Republic and the Union member states in the industrial sphere.

In this vein, it should be noted that most of the EAEU countries are traditional foreign trade partners of Uzbekistan. At the end of 2020, they accounted for more than 30% of the country’s trade turnover: among the foreign trade partners of Uzbekistan, Russia ranks second with a trade turnover of US$5.6 billion, Kazakhstan – third (US$3.01 billion), Kyrgyzstan – seventh (US$903 million), Belarus – twentieth (US$280.1 million).

At the same time, in Uzbekistan, of the total number of enterprises with foreign capital participation, the EAEU countries account for 32% – the number of operating enterprises with the participation of capital of the business circles of the Russian Federation amounted to 1,934 units, Kazakhstan – 902 units, Kyrgyzstan – 161 units, Belarus – 80 units. Armenia – 36 units.

It is also necessary to take into account the fact that the developed and actively developing sectors of the Uzbek economy are included in the list of priority industrial sectors of the EAEU. In particular, this is the automotive industry, light, chemical and petrochemical industries, the production of machinery and equipment for agriculture and forestry, plastic and rubber products, household appliances, etc.

It is worth emphasizing that over the past few years, Uzbekistan has been paying particular attention to industrial development with the parallel promotion of a policy to reduce raw materials exports and diversify the production of products with high added value. For example, starting in 2018, the export of Uzbek raw cotton has been decreasing, and by 2025 it is planned to stop supplying natural gas abroad.

Based on the fact that the development of industrial production with high added value is facing tough competition in the world market, it became necessary to create a separate platform for discussing and developing new joint ideas and projects in the field of industrial cooperation between Uzbekistan and the EAEU countries. In this vein, the industrial forum and exhibition “Innoprom – Central Asia”, initiated by the President of the Republic of Uzbekistan Shavkat Mirziyoyev, will provide an opportunity for establishing new industrial and cooperative ties between Uzbekistan and the EAEU.

In the long term, such cooperation will open up new opportunities for the Uzbek side and the Union countries to expand interregional production chains, achieve international product quality standards, form a new export-oriented production, and implement the most efficient utilization of production capacities.

Ultimately, the industrial cooperation of Uzbekistan with the EAEU member states will significantly increase the competitiveness of industrial enterprises by expanding the volume and range of production of goods with high added value, as well as improving the quality and minimizing production costs.

Aziz Salikhov,

Chief Researcher

Institute for Strategic and Interregional Studies

under the President of the Republic of Uzbekistan

 

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