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Interview of Advisor to the Minister in charge of Industry and Agroindustrial Complex of the EEC, Vladimir Maltsev, to the BELTA news agency: “Platform of Sustainability for Eurasian business”

Interview of Advisor to the Minister in charge of Industry and Agroindustrial Complex of the EEC, Vladimir Maltsev, to the BELTA news agency: “Platform of Sustainability for Eurasian business”

11/16/2016

The Eurasian Economic Union has a new instrument to develop interstate cooperation - Eurasian technology platforms.

The Council of the Eurasian Economic Commission has already confirm 11 priority technology platforms in 8 directions: space, medicine, information and communications technologies, photonics, natural resources, ecology, agriculture and industrial technology. The creator behind the idea emphasises that these platforms are intended to ensure systematic work on the accumulation of advanced national and international achievements in terms of scientific and technological progress and to mobilise the scientific potential of the Member States of the Union.

They will be used to solve applied tasks in the development of innovative products and technologies and their introduction into industrial production. Correspondent of BELTA asked Adviser to Member of the Board - Minister in charge of Industry and the Agroindustrial Complex of the EEC, Vladimir Maltsev, about how this idea will be implemented in practice.

- Mr. Maltsev, why was this particular format, i.e. technology platforms, chosen?

- If you look at the history of the creation of integration chains in the post-Soviet space, the most well-known are projects within the framework of the Union State. But they're all initiated from the top, not at the initiative of business. In reality, these projects were all developed in the offices of officials. And it turned out that the economic component had not been fully thought through, therefore all these projects stall somewhat. We, in the EAEU, have chosen another way. Technology platforms as a mechanism are not new. We haven’t invented anything. This mechanism was first applied in Russia in 2008. The idea was copied from the European Union: it originated when the EU had borders, the Union was not as it is now, but it had already developed cooperation chains. The most well-known of them is the aircraft concern Airbus whose parts are made in different countries, where differing measures of support were set out in the legislation. Therefore the question arose: a common product is being constructed, whose partners, even though they are in different states, should be eligible for state support measures. In fact, this is what a technology platform is.

-So, to briefly sum up, a technology platform is a conventional cooperation chain with equal measures of state support?

- With support measures, but not equal ones. Integration in the EAEU has not reached the extent where the level of State support can be unified. However, the advantages of our technology platforms are still substantial: if you enter into this cooperation chain, then, in your State, you should be given some form of preferences as a matter of priority. Moreover, the technology platform can cover the process from the production of raw materials to the final product. For example, take the Belarusian company, Kamvol. It operates under conditions of very high competition. There is a light industry technology platform it can use to see the chain, from the creation of wool production to sewing the finished product, and then join this chain. Why are so many projects at a standstill in the post-Soviet space? Because we are trying to establish joint ventures among ourselves, where competition is very strongly developed. What’s more, we are using state budget to do so. But each State has protectionist measures to support, for example, MAZ and KAMAZ; they compete in the internal market. That is to say that they can cooperate but only in exports.

- As far as I understand, business itself must decide whether to join the Eurasian platform or not?

-Yes. We now have nine platforms specifically in industry. We formed them and then immediately added the proviso: this is cooperation aimed at innovation. It should be more than a cooperation chain; ultimately an innovative competitive product should be created.

- What specific preferences can business gain when joining a technology platform?

- I have already said that each State will introduce its own measures of support for the participants of technology platforms. In addition, the EEC has supranational functions, which mean both tariff and non-tariff regulation measures can be taken. For example, a company produces parts for the final product within a technology platform, but some parts or raw materials are imports from outside the EAEU. The manufacturing country proposes to the EEC: let's reduce import duties on these components or raw materials to zero. We immediately take a look: is this product included in the technology platform? If yes, the Commission confirms that this product is needed, that it is innovative and cooperative. And we give preferential duties. There may be other measures, for example, technical regulation. In addition, the EEC wills soon have the authority to enter voluntarily agree on EAEU subsidies with participating countries. This means, another subsidiary mechanism will be added. Let’s not forget about the financing mechanism via the Eurasian Development Bank. We agreed that it would finance projects with cooperative participation, and this position has been confirmed in the Eurasian Intergovernmental Council at the level of Prime Ministers. The EEC will now set up a special working group headed by Member of the Board - Minister in charge of industry and the Agroindustrial Complex of the EEC Sergey Sidorskiy, which will select such projects. In the future we plan to look at establishing a joint fund to finance cooperation projects. Maybe we will come to an agreement on subsidising credit rates so that it is not under commercial conditions. We are also considering this type of mechanism.

-Will Eurasian technology platforms focus primarily on issuing export-oriented products?

The whole experience of establishing customs unions concerns the fact that, above all, we must increase the supply of products to the internal market. To do so, we must eliminate barriers to mutual trade. Only then will competitive products begin to appear there. By developing competition, we will be able to create products that can be exported. If we are going to declare that we’ll create products aimed for export, we will not be able to release to the external market without competition; no one will need them there. Although, of course, our companies independently produce competitive products. For example, MAZ, KAMAZ, Gomselmash, other enterprises. We produce a lot of competitive products, but each country does so independently. And we're talking about creating cooperation chains. I want to say a little more about it now. We are in economically difficult conditions where sanctions are imposed on Russia that indirectly affect all the EAEU members. This is because we have the Common Economic Space. Therefore, first and foremost Russia, it seems to me, should offer some form of integration steps to smooth out the effect of the sanctions that affect other countries. Because there can be no integration without any concessions to each other. The President of the Russian Federation proposed such a mechanism, inviting all EAEU States to participate in the import substitution program in Russia. The Commission is now actively working on this issue with the relevant ministries of the parties.

-When can we expect these technology platforms to give their first results?

-Technology platforms are not just a mechanism. They encompass specific enterprises and specific projects. The technology platforms that we announced the establishment of - they all have specific participants, the enterprises themselves sign agreement with each other. I.e. the specific participants said: we are joining this technology platform and are willing to create such a product. We hope that by mid-2017, some projects will have been established that can be financed by the Eurasian Development Bank and supported at the national level.