TRADE COLLAPSES BETWEEN BELARUS AND KAZAKHSTAN.

Belarusan president Alyaksandr Lukashenka’s recent visit to Kazakstan illustrated the theory and reality of attempts at economic integration among CIS states. On the first day of his state visit in Almaty on September 23, Lukashenka told a press conference that the "Union of Four" customs union — consisting of Russia, Belarus, Kazakhstan, and Kyrgyzstan — was a model of what could be accomplished by CIS states working together. Because the Union of Four is concerned only with promoting economic integration and has no political dimension, Lukashenka argued, there is no reason why "not only Ukraine, but also the Baltic states should not join". (Russian agencies, September 23)

However, even as an institution promoting economic integration, the Union of Four has proved to be less than a smashing success. This was pointed out by Kazakh president Nursultan Nazarbaev, who told the same press conference that, as of mid-1997, trade between Belarus and Kazakhstan had fallen 40 percent from its mid-1996 levels. Nazarbaev attributed this result to the fact that the customs union "is not working". In contravention to the definition of a customs union, which presumes that member countries liberalize their mutual trade and adopt common tariffs for trade with non-members, Nazarbaev pointed out that Union of Four countries have adopted "different value added tax rates, and different rail shipping rates". Likewise, many foreign trade transactions remain tightly controlled by the government, especially in Belarus.

This collapse in trade between Belarus and Kazakhstan must come as a disappointment to advocates of intra-CIS economic and political integration. It would also seem to be inconsistent with the rapid economic growth officially reported in Belarus. One would have expected that the 11 percent increase in real GDP recorded by Minsk between mid-1996 and mid-1997 would have been accompanied by growing trade with Kazakhstan as a co-member of the Union of Four and one of Belarus’s leading trading partners.

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