World Economy

Russia Allocates $1.2b for Kyrgyz EEU Integration

Russia Allocates $1.2b for Kyrgyz EEU IntegrationRussia Allocates $1.2b for Kyrgyz EEU Integration

Lawmakers from Russia’s parliamentary upper house ratified on Wednesday an agreement with Kyrgyzstan on development of economic cooperation as part of Eurasian economic Union (EEU) integration.

For these purposes, the Russian government plans to allocate $1.2 billion over the next two years, Itar Tass reported.

The agreement signed in Astana on May 29 is designed to develop cooperation in agro-industrial sector, the sewing and textile industries, processing, mining and metallurgical industries, transport, housing construction, development of entrepreneurship and infrastructure.

A special development fund is going to be set up in the form of an international organization. Its status, functions, structure and rules of functioning will be defined in a separate agreement.

Russia guarantees that Kyrgyzstan will receive money for implementing projects in the aforesaid fields by forming the fund’s capital in equal shares in the next two years on the following conditions: an authorized capital estimated at $500 million and at least $500 million worth of borrowed loans.

  Free Grant

Besides, Russia has undertaken a commitment to grant $200 million to Kyrgyzstan free of charge in the next two years to finance the implementation of a roadmap for Kyrgyzstan’s accession to the Customs Union of Russia, Belarus and Kazakhstan.

Kyrgyz authorities decided to join the Moscow-led Customs Union in the spring of 2011. Six months later, the former Soviet republic filed an official request for accession. Its government is currently aligning legislation with that of the Customs Union and the wider planned common economic space. A roadmap plan for integration approved by all interested parties says Kyrgyzstan will join by January 1, 2015.

A treaty on the republic’s accession to the Customs Union and the newly-formalized Eurasian Economic Union of Russia, Belarus and Kazakhstan is expected to be signed on December 23.

The Eurasian Economic Union, which envisages the free movement of goods, services, capital and workforce and is based on the Customs Union, will become operational from January 1 next year.