Eurasian Integration Yearbook 2012

Viktor Ivanter, Valery Geets, Vladimir Yasinskiy, Alexander Shirov,and Andrey Anisimov. “The Economic Effects of the Creationof the Single Economic Space and Potential Accession of Ukraine”Customs Unionand the Single Economic Spacerisks of the member states in mutual trade. On the other hand, advantages inbilateral trade will become impossible if a national currency devaluates. At firstglance, currency integration seems less advantageous to the net importers ofenergy resources who cannot offset the trade balance deficit with changes inexchange rates. Thus, it is important to understand whether the effects of thelifting of customs duties and enhanced industrial cooperation will offset thelosses associated with the need to use a unified currency system. The estimatesgenerated for this scenario, which encompasses all of the aforementionedfactors, indicate that the Ukrainian economy will preserve its gain, though lowercompared to the baseline scenario. Given that by 2030 the positive impact ofthese effects on Belarusian GDP is expected to reach approximately 6% ofthe baseline GDP, it can be asserted that, in the long term, joining the SingleEconomic Space with the unification of the currency system will yield a greatergain than that offered by the scenario envisioning the independent setting ofexchange rates.These forecasts reflect the existing integration risks associated with the formationof a single currency and financial system in the post-Soviet area (see Table1.9).Russia 2010 2015 2020 2025 2030Export 0 0.03 0.18 0.98 1.45Import 0 -0.25 -0.86 -1.48 -2.11GDP 0 0.02 0.11 0.29 0.41Kazakhstan 2010 2015 2020 2025 2030Export 0 0.1 0.27 0.78 1.52Import 0 -0.37 -1.29 -2.14 -2.92GDP 0 0.02 0.04 0.18 0.46Belarus 2010 2015 2020 2025 2030Export 0 0.13 0.16 -0.08 -0.32Import 0 0.62 2.29 3.92 7.7GDP 0 0.03 -0.14 -0.63 -0.74Ukraine 2010 2015 2020 2025 2030Export 0.05 2.51 1.56 -1.35 -3.4Import 0 -1.49 -3.44 -1.26 0.79GDP -0.05 2.56 5.78 3.87 1.98Table 1.9.Change in keymacroeconomicindicators comparedto the baselineoption(scenario envisioningUkraine’s joining theSES with a unifiedcurrency systemand technologicalconvergence;% of baselinevolumetric indicators)Source: Calculationsby IEF RASIn addition to the quantitative estimate of the overall macroeconomic effects ofdifferent integration scenarios in the post-Soviet area it is important to assesspossible changes in sectors.Eurasian Development Bank33