Calls to ban Russian imports voiced in Kazakhstan

Pavlodar authorities have addressed the First Vice-Prime-Minister of Kazakhstan Bakhytzhan Sagintayev with a proposal to temporarily ban imports from Russia, Tengrinews reports.

The city administration complained that domestic industrial enterprises were experiencing serious problems because the Kazakh market was flooded with cheap Russian products. "Prices of Russian competitors are 30-60% lower than what Kazakhstani suppliers can offer. This has a negative impact on the activities of the local industrial enterprises," Vice-Governor of Pavlodar Oblast Duisenbai Turganov said.

Russia has been repeatedly hit by severe political and economic sanctions since the Ukrainian conflict began last year. In the end of 2014 the Russian ruble began its dramatic fall exacerbated by low oil prices depriving the country of tens of billions of dollars in oil revenues. The devaluation is at around 80% compared to the dollar-ruble exchange rate of mid-2014.

Due to the exchange rate differences between Kazakhstan and Russia that emerged as a result of the devaluation of the Russian ruble, there has been a substantial difference in prices of similar goods in Russia and Kazakhstan.

"We are offering to introduce a ban or limit the import from Russia for those goods that domestic producers are capable of supplying in sufficient quantities on their own, or to apply non-terrif regulation measures and antidumping measures similar to those that Russia applies in relation to some of the goods originating in Kazakhstan," the Kazakh Vice-Governor said.

Among other options the Vice-Governor mentioned setting additional technical or environmental requirements for the goods inbound to Kazakhstan from Russia. 

Vice-Prime-Minister of Kazakhstan replied that the Kazakh Government was looking for solutions and was planing to coordinate its actions with the Russian Government. 

Director of the Center for Macroeconomic Research Olzhas Khudaibergenov agreed that a temporarily ban of Russian imports was more than appropriate under the circumstances.

He reminded that the Eurasian Economic Union's (both Kazakhstan and Russia are part of the economic union) regime allowed protective measures, including temporary bans on imports, in exceptional cases. The current situation is that very exceptional case, he said. 

The Kazakh financial analyst explained that those measures, if adopted, were not supposed to be viewed as a sign of disintegration of the union or regarded as a negative development.

"It is necessary to make it very clear that Kazakhstan supports the integration. And Russia, in turn, should make it clear that it has no objections to the protective measures (adopted by Kazakhstan)," he said.

Khudaibergenov proposed set three conditions for the ban: it had to be temporary - two years, three years maximum, it had to apply only to the Russian goods that are competing with similar Kazakh goods, and the ban would only limit the goods from exceeding the amounts of supply recorded in 2013.

This way Russia will keep the volume of deliveries of competing goods and will be able to increase exports to Kazakhstan of non-competing products, Khudaibergenov said.

The analyst stresses that this plan was beneficial both for Kazakhstan and Russia: the first would stabilize its domestic market, the second would improve the Kazakh population’s attitude towards the integration process.

It will send a signal to both Kazakh and foreign observers that Russia is not intending to reintroduce a soviet-style regime through the economic union and is not going to solve its problems at the expense of its neighbours, Kazakhstan in particular. Moreover, the measure will be an example of efficient and mutually beneficial cooperation of the members of the Eurasian Economic Union in the time of crisis.

Reporting by Azhar Ashirova, writing by Dinara Urazova and Tatyana Kuzmina