Ladies and gentlemen,
Allow me to greet you on behalf of the Russian government at this 19th annual investors' conference, which is traditionally organised by Renaissance Capital. It is especially gratifying to see that this is such a representative event, which has gathered an impressive number of investors from more than 35 countries, as I was told - this immediately after the St Petersburg Economic Forum, which we regard as the principal forum in this country.
I consider the theme of this conference to be of critical importance. This is the year of Russian presidency in the CIS, and we intend to promote an important issue during it. We will try to formulate the parameters of the free trade zone, and to agree on these parameters by the end of the year. If we're lucky, we will even sign a draft of this agreement. The CIS format has aroused great interest and many arguments over the last years: what is the future of the Commonwealth, what is Russia's part in it, and to what extent can this format adapt to other integration processes. We proceed from the assumption that the CIS format will develop in new directions with the formation of the Customs Union of Russia, Belarus and Kazakhstan.
Allow me to say a few words about our general idea of global integration processes and the participation of the CIS in them. I hope that, during your discussions, you will help us answer questions the government encounters in its work on CIS-related problems. Today, the world's most powerful integration movement is the European Union. Five years ago, the EU and Russia agreed to form an economic union, which implies basic economic institutions and laws mutually identical in Russia and the EU countries. But in doing this, we will not form a common economic space, which differs from an economic union by the absence of common institutions and supranational agencies. The international agencies established in the European Union pertain to the EU area, while similar agencies and laws are in effect in Russia under the authority of Russian sovereign agencies.
We have worked on a parallel track, for Russia to join the World Trade Organisation and toward the formation of the Customs Union. In this, we proceed from the fact that pivotal Customs Union institutions should rest on the basic principles of the WTO and on pivotal institutions analogous to those of the European Union. Whatever questions arise, we should arrive at similar responses, and I hope this point will be clear as the Customs Union documents are reviewed.
Our goal is thus clear: as we and the EU form an economic union, we are, in a sense, advancing this economic union in Kazakhstan and Belarus. At the same time, Russia is forming a common economic space with Belarus and Kazakhstan - which means that, if we implement our plans in full, two systems of common economic space will coexist by January 1, 2012, with common approaches to economic activity, that is to say, a common economic space with its own agencies in the European Union and another common economic space within the Customs Union or other possibilities that could emerge by then: a united Eurasian economic space of three countries with supranational agencies of its own.
The first such supranational agency has been established already, with its authority and responsibilities. The member states have each delegated some authority to it. I mean the Customs Union Commission, active in Russia, Belarus and Kazakhstan since January 1, 2010. It has the right to establish customs duties and other nontariff regulations, and its decisions do not need the member states' approval. In other words, these are directly applicable bylaws for mandatory implementation by each of the three countries.
We face a tremendous job: to pass approximately 19 agreements between Russia, Belarus and Kazakhstan concerning a wide range of topics from the unified principles of macroeconomic policies to, say, common access to the transport infrastructure. In other words, these are basic economic laws built from the pivotal principles of the WTO and the European Union. This way, we will create an economic union with the EU while Kazakhstan, Russia and Belarus will have a common economic space.
The words "union" and "unity" might be misleading due to their likeness - but they become explicit after you say them ten times. What emerged on January 1 is a narrow format of the Customs Union, and we wait for July 5, when decisions for stage two will be made in Astana. As you know, from extensive press materials, these decisions will concern the second stage of the Customs Union. It will be either the tripartite union of Russia, Kazakhstan and Belarus, as previously agreed upon, or a bipartite Russia-Kazakhstan union. At any rate, the second stage is in progress in all three countries, and the next stage of closer integration depends on what decisions are made in Astana on July 5.
These three countries, Russia, Kazakhstan and Belarus, are CIS members. They have the highest degree of integration in the CIS and the entire post-Soviet region. You know that there are other formats, too: the EurAsEC and the CIS proper. We are often asked whether it is possible to form a new economic cooperation in the CIS, and if it is necessary when Kazakhstan, Russia and Belarus are pulling ahead with new integration and attempting to organise themselves along very different patterns of social and economic dispute settlement, etc, etc. The answer is yes. We certainly need it.
At present, the CIS has no multipartite free trade agreement. This will become more clear as we determine how the new economic process will differ between the three Customs Union member countries and the rest of the Commonwealth. It is a very sensitive matter because, as you know, Moldova, Ukraine, Uzbekistan and many of our CIS partners insist on free trade between our countries or between all CIS countries without exception.
But then, why should we establish a Customs Union at all? The Customs Union is an unlimited integration union. What will distinguish it from the CIS? Experts debate this, because a common market for Russia, Kazakhstan and Belarus should be entitled to certain preferences, after all. Exceptions should also be included for other countries, which are not yet ready for deeper integration. Whatever format the free trade agreement might take, the foundation of the economic legislation will spread to the entire Commonwealth via Russia and the united economic space. This is what we proceed from.
Thus, the basic EU agencies or economic laws will spread throughout the CIS with time. This is what the phrase "Europe from the Atlantic to the Pacific" means, not geographically of course but economically. Economically, it will be a European style system stretching from the Atlantic to the Pacific, and it will certainly spread to other regions. It is good to see India, Mongolia and other countries represented here because the formation of an economic union, and of a common economic space, even for mere three countries, will certainly have an effect on the interests of our closest partners and neighbours, not only the other CIS countries, but also India, China, Mongolia and other countries in the orbit of these integration processes.
What impact will our plans for an international financial centre have on the integration processes in the CIS? To what extent will they influence our Indian and Chinese partners? We are still finding answers to these questions as we proceed with our plans.
We need an international financial centre in Russia not as a project for its own sake, just to have something new in Moscow that would demand many bankers, loan offices and fiscal institutions. We need stock exchanges that differ from our present institutions. They are making good progress but we want to see them at quite a different developmental level. We need all this to implement the entire agenda of Russian modernisation about which we have been talking for several years now. Modernisation is out of the question without concentrated capital, and we are fully aware of this. We also realise that Moscow and all of Russia have the best chance within the post-Soviet area to implement the project now.
The attitudes to banking and bankers differ from country to country. As you know, the G20 summit has just wrapped up. A new tax was discussed. Russia does not think it should be introduced because we expect the banking sector to develop differently in Russia, including Moscow. It would receive support without any legislative initiatives which may ultimately send banking sliding into grey market areas. We do not support the idea, and we have said so on many occasions. We think that whatever is connected with Basel III, etc, all civilised banking instruments will be fully adapted to the Russian law and implemented. However, Russia can offer extra opportunities to develop banking and lending, and we will do our best to offer such opportunities.
I will say it again that our main goal is to provide real capital concentration and to provide the opportunities for these investments to penetrate the former Soviet Union, with a preference toward our partners, Kazakhstan and Belarus. Our other partners, who can use this capital, will also have the opportunity.
I hope you will have extremely productive discussions today. Your conclusions will be summarised for the government, whose representatives will be here throughout. As far as I know, my friend and colleague Alexei Kudrin will be here tomorrow, and I hope your recommendations will be of great help to us.
We firmly believe that the CIS is going through a new time of self-evaluation and reappraisal. It will celebrate its 20th anniversary next year. This is an essential time. I hope we will approach the anniversary in December 2011 with quite a new realisation that there is no alternative to the CIS due to its historical, economic and cultural commonality, whatever aspirations for European integration our partners in the CIS might have, and however eager they might be for integration with Asia. I hope these premises will become fact.
I wish you every success in your work. Thank you.