The digitization of economy, or the fourth industrial revolution, has transformed all aspects of life by creating new opportunities that drive innovation and economic growth. According to the research done by Huawei, the world’s digital economy is worth $11.5 trillion, equivalent to 15.5% of the global GDP, which has almost doubled its size since the 2000s [Huawei, 2017]. Meanwhile, the World Bank expects about 2 million to 4 million new jobs by 2025, 1 million of which would be in the ICT sector [World Bank Report, 2016]. In the Eurasian space, particularly within the Eurasian Economic Union (EAEU), the digital agenda has also become one of the priority directions of integration and cooperation. The Eurasian Economic Council predicts that the joint digital agenda will provide the EAEU with an additional GDP growth of up to 1% per year by 2025 [Eurasian Economic Commission, 2017]. Thus, the effective digitalization turns into a key factor in accelerating the development of national economies and increasing the quality of life, which will also be an impetus to the development of a common digital space and data economy.
In that context, the annual forum titled “Digital Agenda in the Era of Globalization 2.0. Innovation Ecosystem of Eurasia” held in Almaty on February 1, 2019 to discuss the digital ecosystem of Eurasia was an important platform to develop joint measures aimed at accelerating the development of the EAEU countries’ digital economies and increasing competitiveness and regional integration transformation. Therefore, based on the high-level discussions of this forum, it will be interesting to overview the joint efforts of the EAEU member states, as well as their individual achievements in developing the digital agenda.
Notably, the document called the EAEU Digital Agenda until 2025, aimed to create a single digital economy in the region and achieve associated dividends of the EAEU digital strategy, was signed on December 26, 2016. Further, the meeting of the Supreme Eurasian Economic Council on October 11, 2017, approved the Main Directions for the Implementation of the EAEU Digital Agenda until 2025, which are as follows: 1) the transformation of common markets; 2) sectoral and cross-sectoral transformation; 3) the development of the digital infrastructure; and 4) the digital transformation of the management of integration processes [Eurasian Economic Commission, 2018].
Prior to that, in March 2016, the decree on the establishment of the Working Group to Develop Proposals Regarding the Creation of the EAEU Digital Space was approved in order to find common approaches in this area. In addition, during 2016-2017, the Eurasian Economic Commission (EEC) jointly with the World Bank conducted a study to learn from the experience of other organizations and developed a proposal to foster the economic impact of the digitalization and the implementation of the EAEU Digital Agenda until 2025 [Roscongress, 2018].
Based on this study, the EEC is implementing its Main Directions of Industrial Cooperation, a mid-term strategy of industrial cooperation within the EAEU, in two key tracks – in the traditional and in the innovative sectors. In addition, the practical realization of the digital agenda’s roadmap actions includes the creation of “Eurasian technological platforms”, a Eurasian network of industrial cooperation and subcontracting, and the implementation of cooperation projects with the Eurasian Development Bank. Moreover, in 2018, the EEC established a Digital Initiatives Office, where representatives of the EAEU member states can transmit their initiatives. One of such initiatives was the introduction of a common system for digital traceability of goods, services and digital assets, as well as digital transport corridors [Greater Europe, 2018].
Overall, the innovative approaches towards the digital economy are implemented within the EAEU in the agrarian, industrial, financial and other related spheres. Further, for improving the technical regulation of these sectors, 15 new Union-wide technical regulations are under development. Currently, a single services market covers 43 sectors and will be supplemented by 20 more sectors. Likewise, the EAEU Customs Code that entered into force on January 1, 2018, introduced the priority of electronic declaration and the possibility of automatic customs clearance of exported and imported goods, which are further steps towards a common integrated information system [Greater Europe, 2018]. To promote integration in the digitalization sphere, the EAEU member states plan to connect their national innovation centers, such as Russia’s Skolkovo and Innopolis, the Belarusian High-Tech Park, Kazakhstan’s Nazarbayev University, Astana-Technopolis free economic zone and new EXPO-2017 based international technopark of IT start-ups [Primeminister.kz, 2018].
Thus, the EAEU has institutionally framed and continues working on the implementation of its digital agenda. At the national level, the member states developed their own national digitalization strategies that incorporate the EAEU digital agenda promoting their own digitalization of economy. Particularly, Kazakhstan was among the first CIS countries to introduce the e-government services using a digital signature in 2008, while the plan until 2020 is to provide up to 80% of public services online. Such government programs as the Industrialization and the Third Modernization, as well as the Digital Kazakhstan program adopted in December 2017 are comprehensive mechanisms to provide digital transformation and accelerate technological modernization of the economy of Kazakhstan. Russia adopted its Strategy for Information Society Development for 2017–2030 in May 2017, within which the Digital Economy program has been transformed into a national program, and its directions have become federal projects that were approved in December 2018 [Public Governance Improvement, 2019]. Belarus also identified digital transformation as a priority for national development and adopted a decree “On the Development of the Digital Economy” in December 2017. The country created conditions for companies to operate in the High-Tech Park, the largest IT-cluster in Eastern Europe with software production volumes exceeding $1 billion, in addition to eliminating barriers to the introduction of new technologies and the formation of an ecosystem of innovations [Invest in Belarus, 2019]. Armenia created the Digital Armenia Foundation in order to implement the Armenia Digital Agenda-2030 development program. The country intends to reach 100% digitalization of government services for business and 80% digitalization of government services for citizens [Primeminister.kz, 2018]. Meanwhile, Kyrgyzstan adopted the Concept of the Digital Kyrgyzstan National Digital Transformation Program for 2019-2023, and 2019 has been declared the year of the development of regions and the digitalization of the country [Elgezit.kg, 2018].
Notably, according to the UN’s 2018 E-Government Development Index (EDGI) that measures the readiness and ability of a government to use information and communication technologies to provide services to the public, Russia ranked 32nd, Belarus – 38th, Kazakhstan – 39th, Armenia – 87th, and Kyrgyzstan – 91st. Compared to the 2016 index, Russia, Belarus and Kazakhstan were upgraded from the high to the very high EGDI level, while Armenia and Kyrgyzstan remain among the countries with the high EDGI [E-Government Development Index, 2018]. Hence, the long-term strategic plans, as well as the integration of ICT development initiatives in various sectors of economy, contribute to the coherent functioning of e-government services in the EAEU member states.
However, even though the member countries are developing their e-services and incorporating existing mechanisms to ensure the effective implementation of digital tools, some EAEU states suffer from the lack of internet access. For instance, Kyrgyzstan ranked only 109th in the ICT Development Index 2017, while the top three countries from the CIS region, Belarus, Russia and Kazakhstan were, respectively, on the 32nd, 45th, and 52nd positions. Armenia with its 75th position also faces difficulties in the implementation of digital economy [ICT Development Index, 2017]. The low level of penetration of digital technologies is explained by the high cost and poor quality of internet services. As for Kyrgyzstan, the penetration of the broadband internet connection is only 3%, whereas 80% of the population in Armenia and Kyrgyzstan spend around 10% of their household expenditure on the mobile communication services [World Bank, 2016].
Therefore, as the World Bank’s study concluded, a common coordinated approach to the digital development at the national and EAEU levels would be significantly beneficial for obtaining maximum effects of digital dividends for all participants rather than implementing measures only at the national level [World Bank, 2016]. Accordingly, combining the potential and activities of the member states for the exchange of knowledge and experience will give an impetus to the development of the EAEU innovative digital ecosystem.
E-Government Development Index (2018). Retrieved from https://publicadministration.un.org/egovkb/Portals/egovkb/Documents/un/2018-Survey/E-Government%20Survey%202018_FINAL%20for%20web.pdf. Assessed on 12.02.2019.
Elgezit.kg (2018). Security Council approved the Concept of Digital transformation 2019-2023. Retrieved from https://elgezit.kg/2018/12/14/sovbez-odobril-kontseptsiyu-tsifrovoj-transformatsii-na-2019-2023-gody-2/. Assessed on 14.02.2019.
Eurasian Economic Commission (2017). The EAEU first digital initiatives are already under way. Retrieved from http://www.eurasiancommission.org/en/nae/news/Pages/11-12-2017.aspx. Assessed on 11.02.2019.
Eurasian Economic Commission (2018). The Republic of Kazakhstan presented digital initiatives as part of implementation of the EAEU digital agenda. Retrieved from http://www.eurasiancommission.org/en/nae/news/Pages/6-07-2018-5.aspx. Assessed on 11.02.2019.
Greater Europe (2018). In 2018 the Eurasian integration agenda will be rich. Interview with Sergei Shukhno. Retrieved from http://greater-europe.org/archives/4535. Assessed on 14.02.2019.
Huawei (2017). Digital Spillover. Measuring the true impact of the digital economy. Huawei Technologies Co., Ltd. Retrieved from https://www.huawei.com/minisite/gci/en/digital-spillover/files/gci_digital_spillover.pdf. Assessed on 14.02.2019.
ICT Development Index (2017). Retrieved from http://www.itu.int/net4/itu-d/idi/2017/index.html#idi2017byregion-tab. Assessed on 14.02.2019.
Invest in Belarus (2019). Belarus creates the most attractive conditions for IT companies. Retrieved from http://www.investinbelarus.by/press/news/v_belarusi_sozdayutsya_maksimalno_privlekatelnye_usloviya_dlya_raboty_it_kompaniy/. Assessed on 11.02.2019.
Primeminister.kz (2018). Forum “Digital Agenda in the Epoch of Globalization” – how digitalization is developing in the EAEU. Retrieved from https://primeminister.kz/ru/news/photoreport/digitalforum. Public Governance Improvement (2019). Digital Economy. Retrieved from http://ar.gov.ru/ru-RU/typicalPage/typical-page/view/28. Assessed on 11.02. 2019.
Roscongress (2018). The EAEU 2025 Digital Agenda: Prospects and Recommendations. Retrieved from https://roscongress.org/en/materials/tsifrovaya-povestka-evraziyskogo-ekonomicheskogo-soyuza-do-2025-goda-perspektivy-i-rekomendatsii/. Assessed on 12.02.2019.
The World Bank (2016). The EAEU 2025 Digital Agenda: Prospects and Recommendations. Overview Report. Retrieved from http://documents.worldbank.org/curated/en/850581522435806724/The-EAEU-2025-digital-agenda-prospects-and-recommendations-overview-report. Assessed on 12.02.2019.
Note: The views expressed in this blog are the author’s own and do not necessarily reflect the Institute’s editorial policy.
Dr.Albina Muratbekova is a research fellow of the Eurasian Research Institute at H.A.Yassawi Kazakh Turkish International University. Albina holds a PhD degree in Oriental Studies from Al Farabi Kazakh National University. She was a Fellow of the EUCACIS PhD support programme, Fudan Fellow 2017, a visiting student of the Cambridge Central Asia Forum at the University of Cambridge along with being an exchange student at Lanzhou University. Previously, she had worked at the international departments of Narxoz and AlmaU universities on the implementation of the internationalization strategy of th