Economic Growth Gets More Sustainable in EEU Countries

4 september 2017

The Analytical Center has published a final bulletin on the economic development of the Eurasian Economic Union (EEU) countries. Previous issues of the bulletin focused on some peculiarities of development in Armenia, Belarus, Kazakhstan, and Kyrgyzstan. The new document dwells on economic integration of the post-Soviet countries, which now form the EEU, with the main goal to improve overall well-being.

According to experts, the integration process intensified in the second half of 2000s. 2010 saw the establishment of the Customs Union, and 2015, of the EEU. Today, compared to Ukraine, Uzbekistan and Georgia, the EEU countries show a higher GDP per capita as well as faster economic growth. However, if benchmarked against their other neighbors, Poland and Turkey, they are slightly behind.  Experts believe that the EEU member states exporting to Russia as well as personal remittances from Russia are the two key factors of their economic sustainability.

In recent years important steps were made to establish an institutional basis for the EEU, analysts say. A new development bank, the Eurasian Development Bank, has invested USD 5.8 mn in projects on the territory of the EEU states and Tajikistan in 10 years. Against the backdrop of a complicated geopolitical situation and some foreign trade shocks experienced in recent years by oil exporters (Russia and Kazakhstan, in particular), the EEU countries are adapting to global development realities.

Russia is the key contributor to the aggregate EEU GDP (in terms of PPP) with 85% (USD 3.52 trillion out of 4.14 in 2016). Kazakhstan's share is growing steadily and in 2016 it reached 10% for the first time. Since 2015, the aggregate share of Armenia and Kyrgyzstan has been over 1%. The shares of Russia and Belarus have been shrinking gradually. After an uneasy transformation period and a GDP slump in the 1990s followed by a number of crises and shocks in the global economy, the growth in the EEU countries is getting more sustainable, as they can rely on the total of their markets and resources thanks to the integration.

Scientists note that demographic indicators in the EEU are better compared to other post-Soviet countries, such as Ukraine and Georgia, where the population in 2016 was lower than in 2000 by 18% and 16% correspondingly.

To compare transition period advances properly, the accumulated economic growth of the post-Soviet countries should be compared with the growth inherited from the USSR and with that after a drop in the second half of 1990s. Despite being a relatively poor country (USD 3,300 per person in 2016), it is restoring its Soviet-period condition. In 25 years Armenia (and Uzbekistan) have improved significantly the well-being of their nations (to USD 8,200 per person in 2016), whereas Ukraine and Georgia, that started in the 1990 from similar grounds, did not. Russia is the richest country in the EEU. In recent years Kazakhstan almost drew level with Russia in terms of GDP per capita. The indicators of Belarus are also relatively high.

The bulletin also gives an overview of economic statistics in the leading countries of the world.

For more details see the Economic Ties and Development in EEU bulletin.

More bulletins on current global economy trends are available in the Publications section.