EDB Integration Business Barometer

07.21.2022

Eurasian Development Bank (EDB) has presented results of survey among the large and medium-sized businesses in Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan.

According to the majority of companies surveyed (73% on average), the Eurasian integration makes it easier to do business in the EAEU member states. For some, significantly, for others, to some extent: the proportion of such responses combined was 79% and 78% in Kazakhstan and Belarus respectively, 75% each in Russia and Armenia, and 60% in Kyrgyzstan. As an experiment, questions concerning the EAEU were also asked in Tajikistan, where 73% of respondents believe that the EAEU facilitates doing business in the member states to some extent, and some of the respondents expressed a desire to see the republic as the Union member-state.

At the same time, companies of the six countries face barriers to international business in the EAEU and CIS, most often in trade. In addition to technical barriers, difficulties in customs clearance and sanitary regulations, respondents most often cited 1) high competition, 2) lack of information about foreign markets and potential partners, 3) restrictions on marketing of goods and 4) financial measures. Export subsidies, protection of intellectual property rights, restrictions on government procurements, and price controls on competition were the least difficult ones.

Possible measures proposed by businesses to remove barriers include: the use of international standards or development of their own ones and EAEU regulations, mutual recognition of product evaluation procedures, harmonization of labelling rules and regulations, and development of unified requirements and rules for goods circulation. A number of respondents noted the advisability of more meetings and forums. The need to invite more countries to join the EAEU was also stressed.

Among measures taken within the EAEU, the most popular ones were those on the digital transformation. It is considered the most effective in Kazakhstan, Kyrgyzstan, slightly less so in Belarus, and the least effective in Armenia and Russia. Across all countries, implementation of the EAEU digital agenda is seen as the most successful measure overall, with 71% of companies in Armenia, 73% in Belarus, 83% in Kazakhstan and 65% in Russia responding positively. The leader of positive responses in Kyrgyzstan is the single point of contact mechanism in the EAEU international business regulation system: it was chosen by 83%, while 77% were also in favor of the digital agenda.

According to most companies, reducing the tax burden works best, and the worst is introduction of special treatment for investors from member states, involving a free choice to use national and most-favored-nation treatment in each EAEU country. The deferral of indirect taxes for up to 50 days and the availability of equal employment rights for nationals of each EAEU country as residents of other member states are highly appreciated. Companies also identified the most attractive, desirable benefits and exemptions for business within the EAEU: reduced-rate lending, tax and customs exemptions.

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