Problems of Economic Security of Kazakhstan and Kyrgyzstan in the System of Integration Processes in Eurasia

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 1078-1081

J. Environ. Treat. Tech.

ISSN: 2309-1185

Journal web link: http://www.jett.dormaj.com

Problems of Economic Security of Kazakhstan and

Kyrgyzstan in the System of Integration Processes

in Eurasia

Angelina G. Shamsutdinova , Elena A. Tereshina, Timur Z. Mansurov

Kazan Federal University, Institute of Social and Philosophical Sciences and Mass Communications, Kazan, Russia

Received: 13/09/2019

Accepted: 22/11/2019

Published: 20/12/2019

Abstract

The aim of the study is to identify problems and threats to ensure the economic security of Kazakhstan and Kyrgyzstan in the

system of integration processes in Eurasia. Both states can be attributed to the Central Asian region of the Eurasian post-Soviet space.

The processes taking place in this region are determined by the sovereignty of countries, national interests, development strategies of

each state, as well as the interests of national elites. Kazakhstan and Kyrgyzstan are more active participants in the integration

processes in the Eurasian space. The authors emphasize the diversity of integration processes in the post-Soviet Eurasian space. On

the one hand, there is a positive trend in the development of trade and economic ties with partner countries within the framework of

the Eurasian Economic Union (EAEU), on the other hand, the Central Asian states are oriented towards regional cooperation with

European states. The main objectives of the regional partnership are confronting internal and external threats, supporting reforms and

modernizing the economy, and strong cooperation in the field of human rights and the rule of law. The paper defines the specifics of

the “economic security” concept and considers the criteria of economic security. In studying the problems of economic security, the

authors used systemic and institutional methodological approaches. Particular attention is paid to the criteria of economic security,

thanks to which it is possible to assess the economic situation of states for compliance with the demands raised. Among the key

problems of Kazakhstan and Kyrgyzstan, there can be listed the negative structural changes in the economy, the lack of stimulating

factors for increasing production efficiency, artificially stabilized exchange rates, imbalances in the development of the regional

economy of the countries, the deepening of territorial and property inequality, a weak system of state supervision, and the problem of

external debt. In this regard, a joint solution to the problems of economic security requires the timely elimination of internal and

external threats to economic security.

Keywords: Integration processes, The Eurasian post-Soviet space, The Central Asian region, Kazakhstan, Kyrgyzstan, Russia,

Economic security

Turkmenistan, Uzbekistan). The main criterion for dividing

the Eurasian space into separate sub-regions is their

geographical location.

Introduction

It is well known that security is a priority for each state.

At the same time, with the intensification of globalization and

integration processes, new challenges and threats to the

national security of states are being formed.

The region within which new independent states were

formed after the collapse of the Soviet Union can be

conditionally designated as the “Eurasian post-Soviet space”.

The named region can be conditionally divided into several

separate subregions: East European (Belarus, Ukraine,

Moldova), Caucasus (Azerbaijan, Armenia, Georgia) and

Central Asian (Kazakhstan, Kyrgyzstan, Tajikistan,

The theoretical basis of this study was the work of

domestic and foreign scientists on issues of economic theory,

security, problems of development of the economic system

and economic security. The works do not fully reflect the

problems of ensuring economic security in the framework of

the regional integration processes. In this regard, the

definition and understanding of the existing economic

security problems in Kazakhstan and Kyrgyzstan in the

context of the on-going integration processes of the Eurasian

post-Soviet space will help to develop and propose solutions

to improve the level of development of the state economy,

measures to improve the social development of society and

the individual. The issues of protecting national interests in

all spheres of society require theoretical and methodological

reflection and analysis, and effective prevention of emerging

Corresponding author: Angelina G. Shamsutdinova, Kazan

Federal University, Institute of Social and Philosophical

Sciences and Mass Communications, Kazan, Russia. Email:

angel917927@icloud.com.

078

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 1078-1081

contradictions and conflicts will help ensure stability and

security of the region.

order to identify security threats in the context of on-going

processes of globalization and integration.

The economic security of the state is an integral part of

the security system of each country; it acts as the basis for

ensuring national security. There are several definitions that

reveal the essence of the "economic security" concept.

Methods

Within the framework of the presented study, the key

goal is to identify the economic security problems in the

Central Asian region of the Eurasian post-Soviet space by the

example of Kazakhstan and Kyrgyzstan. Security issues of

the states of the Central Asian region are updated in the

context of the development of integration processes within

the framework of the Eurasian Economic Union (EAEU).

The authors used a systematic approach as the main

research methodology. Also in the work, structural-functional

and institutional approaches were used.

The systematic approach allowed us to consider the

problems of ensuring economic security of Kazakhstan and

Kyrgyzstan in the context of the integration processes of

Eurasia.

) The set of conditions protecting the country's economy

from external and internal threats (3).

) The state of the economy and institutions of power,

which ensures guaranteed protection of national interests,

socially oriented development of the country as a whole,

sufficient defence potential even under the most unfavourable

conditions for the development of internal and external

processes (4).

3) The state of the possibility and readiness of the

country's economy to ensure sustainable economic

development, meeting social needs, social stability of the

individual, society and the state in the face of potential and

real threats (5).

Structural and functional analysis includes determining

the main relationships between economic security and the

external environment, as well as identifying the nature and

methods of some economic security substructure influence

Consequently, economic security is associated with the

protection of the economic interests of the state at the

national and international levels and the sustainable

development of the national economy. Sustainable

development of the economy implies a continuous increase in

its viability: the development of technologies, the

development of new products, the qualitative updating of the

production apparatus, the creation of new industries, etc.

Only the existence of a stable national economy in the state

will contribute to international economic integration with

other states.

If we talk about the economic security of the EAEU

member states, then, of course, economic security within the

Union should be aimed at protecting common economic

interests and projects.

Currently, a completely new quality of security is

emerging in the territory of the Eurasian post-Soviet space. In

fact, security in the territory of post-Soviet states has ceased

to fulfil the function of protecting common economic

interests.

The state of economic security can be assessed using the

following indicators that determine the importance of the

economic system development: 1) resource potential and the

possibility of its development; 2) the level of resource use

efficiency; 3) the competitiveness of the economy and

economic entities; 4) the integrity of territories and economic

space; 5) state sovereignty and independence; 6) the ability to

confront the external and internal threats to interethnic and

socio-political stability and conditions for the prevention and

resolution of social conflicts; 7) criminalization of the

economy (6).

Based on the presented criteria of economic security, it is

possible to identify problems in the field of protecting the

economic interests of Central Asian states. It is clear that

these criteria are conditional and may be changed or

supplemented.

(

e.g., food security, etc.) and their constituent elements, on

others.

Institutionalism as an object for its analysis puts forward

both economic and non-economic problems of socio-

economic development. Institutions play an important role in

achieving the country's competitiveness and the successful

development of society. The formation and effective

functioning of institutions is a prerequisite for the sustainable

development of the economy and stability of society.

Results and Discussion

The Republic of Kazakhstan and the Republic of

Kyrgyzstan are the most active participants in the integration

processes in the Eurasian space. The entry of these states into

the EAEU in 2014 demonstrated a positive attitude towards

the development of trade and economic ties with partner

countries in the Eurasian region, including Russia (1).

Moreover, integration processes in the Eurasian post-

Soviet space continue and have a different orientation. The

fulcrum in the framework of the current regional economic

integration is not only the sovereignty of the participating

countries, national interests, but also the interests of national

elites. Certainly, integration "from above" and excessive

politicization of integration can lead to a conflict of interests

between national elites.

The form of manifestation of such a conflict of interests

between the national elites of Kazakhstan and Kyrgyzstan

can be called the situations that arose on the Kyrgyz-Kazakh

border in the fall of 2017 and on the eve of the anniversary

summit of the Eurasian Economic Union in 2019 (2). All of

them are related to non-compliance by both parties with

agreements on the free movement of goods and services

established by the agreement on the EAEU.

Speaking about the resource potential and its effective

use in Kazakhstan, one can single out the problems

associated with lowering the quality of new reserves, their

Before considering the main problems of ensuring the

economic security of Kazakhstan and Kyrgyzstan, it is

important to disclose the essence of the concept of “economic

security” and determine the criteria for economic security in

reduction in

a number of regions of the republic,

complicating mining conditions and rising production costs.

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Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 1078-1081

In connection with the development of mining and

metallurgical production in the region, the environmental

situation is deteriorating.

regard, the search for effective ways to counter security

threats is the key policy direction of each state.

In our opinion, the most important problems of protecting

economic interests in the territory of the post-Soviet Eurasian

space include:

The Kyrgyz economy depends on gold mining and

development of the Kumtor deposit. During 2018, the

economy of the republic was in a state of instability.

According to the results of the first half of 2018, the economy

grew by only 0.1%. Since July 2018, a decline by 0.2%

began. The reason, according to some sources, is associated

with the development of a site with poor ore content in

Kumtor. As a result, the export of this precious metal fell

sharply, which immediately affected the country's economy

1) slowed economic growth against a background of low

consumption; 2) a decrease in the intra-industry productivity

growth rate in all the main sectors of the economy -

agriculture, industry and services; 3) weak diversified

economy, weak technological base, poorly developed private

sector of the economy; 4) difficulties in implementing

projects for the socio-economic development of Central

Asian states (for example, the draft Strategy for the Long-

Term Development of Kyrgyzstan until 2040); 5) the growth

of unemployment and the outflow of economically active

population in the neighbouring regions of the Eurasian post-

Soviet space, including Russia; 6) a low level of monetization

of the economy, which is the reason for weak investment in

the economy; 7) increased transaction costs, which reduce the

competitiveness of the economy; 8) the banking system is in

a stressful state amid a recovery in the banking sector.

(

7, 11, 14).

The performance of the Kyrgyz economy is relatively

stable. The GDP growth remains within the normal range of

%. At the same time, the indicators of industrial production,

as well as the entire economy, unlike 2017, are kept mainly

due to textiles, as well as mining.

One of the main internal threats to the economic security

of Kazakhstan and Kyrgyzstan is the low level of

competitiveness of domestic production.

So, on October 7, 2018, the World Economic Forum

(

WEF) published the annual report on the global

Summary

competitiveness index (GIC) 2018. According to the results

of the rating of 2018, Kazakhstan took 59th place,

Kyrgyzstan - 97th place, Russia - 43rd place.

The identification and analysis of economic security

problems in the territory of the post-Soviet Eurasian space

allows us to draw the following conclusions.

Kyrgyzstan has the worst indicators in terms of ability to

innovate (125th place), market size (124th place) and

development of the financial system (118th place).

Kyrgyzstan has the best indicators for macroeconomic

stability (64th place) and population health (98th place).

The competitive advantages of Kazakhstan are the labour

market - 30th place (improvement by 3 positions) and

Security in the Eurasian region of the post-Soviet space

manifests itself in various spheres of life. One of such

components of security is economic security as a state of

protection of economic interests at the national and

international levels.

The problems of ensuring the economic security of the

states of the Eurasian post-Soviet space must be addressed by

preventing and eliminating threats. Moreover, the state acts

as the main subject in solving the problems of economic

security.

As part of the integration and globalization of the

economy, it is time for the Central Asian states to implement

the reforms necessary to increase productivity, which is the

basis for sustainable growth and higher living standards, in

order to contribute to the development of new sources of

economic growth. Reforms require a financial foundation.

To accelerate economic growth, each state needs to carry

out structural transformations in the economy to increase

private investment and reduce the disproportionate role of the

state in the economy.

business dynamism

- 37th place (deterioration by 2

positions). The weak positions of Kazakhstan identified the

factors “Financial System” - 100th place. "Health" - 97th

place and "Innovation potential" - 87th place (8, 13).

A difficult problem is the problem of external debt which

does not allow the country to pursue an independent foreign

policy with full regard for its national interests.

If we pay attention to social indicators, then we’ll note

there is a territorial inequality in Kazakhstan. A decrease in

poverty can be observed in Almatynsky, Akmolinsky,

Severo-Kazakhstansky,

Vostochno-Kazakhstansky

and

Pavlodarsky regions. It is worth noting that the share of the

middle class in such areas as Kyzylordynsky, Atyrausky,

Aktyubinsky and Yuzhno-Kazakhstansky regions is below

the average level (9, 12).

The unemployment rate has also increased in Kyrgyzstan.

According to the National Statistics Committee, since the

beginning of 2019 the unemployment rate has increased by

Conclusions

Among the problems of economic security in Kazakhstan

and Kyrgyzstan, there are the negative structural changes in

the economy, the absence of stimulating factors for

increasing production efficiency, artificially stabilized

exchange rates, the deepening disproportionality in the

economic development of the country's regions, the

strengthening of property inequality in society, and the

weakening of the state supervision system.

Socio-political and economic processes taking place in

this region are determined by national interests, concepts and

strategies of each state. In this regard, strengthening the rule

of law, step-by-step practical implementation of projects of

19.2% compared to the same period last year. According to

the Ministry of Finance of the Kyrgyz Republic, the number

of officially registered unemployed at the end of April 2019

already amounted to 81.2 thousand people (10).

Based on the criteria of economic security, it is possible

to determine the existing and potential threats to the stability

and security of the region, which indicate the presence of

problems in the region and the need to resolve them. In this

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Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 1078-1081

socio-economic development both within the state and in the

framework of cooperation with international groups and

associations is necessary.

The determining factor for the rapprochement of the

Central Asian states in the post-Soviet space in the field of

security is international economic cooperation enshrined both

at the legal and organizational level.

Acknowledgements

The work is performed according to the Russian

Government Program of Competitive Growth of Kazan

Federal University.

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