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EAEU to create digital investment platform for implementing industrial and infrastructure projects with a strategic planning system

EAEU to create digital investment platform for implementing industrial and infrastructure projects with a strategic planning system

10/22/2019

On October 21, the Eurasian Economic Commission (EEC) Board considered issues in the spheres of industrial cooperation, macroeconomics and functioning of the Eurasian Economic Union (EAEU) internal market.

 

The EEC Board has considered the review of the largest investment projects in the EAEU Member States prepared by the Commission. By the end of this year, the EEC will develop proposals on creating a digital resource for investment projects to be implemented in the Union countries in order to achieve a strategic objective on increasing mutual investments and ensuring growth of mutual trade in investment goods in the EAEU.

 

The review contains more than 600 investment projects amounting to a total of more than 777 bln dollars and includes 3 ths companies involved in constructing industrial and infrastructure facilities with contract data. Some 600 projects were selected from 9.5 ths investment projects in both the real economy and other economic sectors with a total investment of 3,144 bln US dollars.

 

The review is based on the sectoral principle and consists of the following blocks: industrial construction (including the agricultural sector), civil construction, transport (infrastructure) construction, energy construction (including housing and communal services) as well as construction of industrial infrastructure facilities (industrial and logistics parks, and agricultural parks).

 

The document will be sent to relevant ministries of the Member States for use and practical application in order to deepen industrial cooperation and develop cooperative ties.

 

In recent years, many countries all over the world, including members of the EAEU, have begun to implement national industrial and infrastructure initiatives as an effective tool for stimulating national economies through private and foreign investment, and it is also required to carry out appropriate work within the EAEU. The Union has a huge potential for industrial cooperation in implementing industrial and infrastructure projects in the participating countries.

 

The initiative may include investment project databases, best practices for their implementation and operation, effective available technologies for project implementation, financing practices (including public-private partnerships), cases in solving social and economic tasks through infrastructure development as well as other components that allow citizens and the business community to access benefits through infrastructure development and industrialization.

 

Formation of comprehensive proposals for joint implementing investment projects by the Member States’ industrial enterprises for national and international financial institutions, including the Eurasian Development Bank, and attracting investment in these projects can become a practical step in this direction.

 

The analysis of international practice shows that the equity investment in fixed assets of 25-27% to GDP corresponds to the stable economic growth-rate at the level of 3-3.5% over a long period of time. Therefore, the EAEU countries should increase investment potential by creating a system of strategic planning and forecasting of resource consumption.

 

The world market for industrial and infrastructure construction is estimated at more than 8 tln dollars. Through creating digital investment platforms the EAEU business can strengthen its potential to enter third markets in the sphere of providing engineering and construction services in creating industrial and infrastructure projects.

 

For reference

The following infrastructure initiatives are being implemented in the EAEU Member States:

−       Investment Attraction Plan in the Republic of Armenia;

−       National Infrastructure Strategy until 2030 in the Republic of Belarus;

−       State Program of Infrastructure Development and State Program of Industrial and Innovative Development in the Republic of Kazakhstan;

−       Infrastructure reform program under the "40 Steps to Prosperity" Program until 2023 in the Kyrgyz Republic;

−       National projects (Main Infrastructure Development Plan, "Ecology", etc.) in the Russian Federation.

By the end of 2018, the volume of mutual cumulative direct investments within the EAEU is 27 bln dollars, which amounts to only 4% of all cumulative direct investments in the EAEU Member States (EDB data). 

In the sectoral context, industry accounts for only 20% and agriculture accounts for another 4% of the mutual cumulative direct investments within the EAEU.

In 2018, the volume of mutual trade in investment goods was 10.6 bln dollars, which amounts to 12.5% (of 85 bln dollars) of the volume of mutual trade within the EAEU.

Decree No. 204 of the President of the Russian Federation dated May 7, 2018 "On National Goals and Strategic Development Objectives of the Russian Federation through to 2024" outlines a goal to increase the volume of trade between the Union Member States by at least 1.5 times and to ensure the growth of cumulative mutual investment by 1.5 times.