11 March 2014

Modeling the future
of the Eurasian economic space

Researchers from Russia, Belarus, Ukraine, and the European Union met at IIASA last week to discuss and propose new methods to understand the challenges and potential benefits of economic cooperation and integration “from Lisbon to Vladivostok.”

participatns in the meeting. ©IIASA

participatns in the meeting. ©IIASA

Amidst a tense political situation between Ukraine, Russia, and Europe, a group of systems analysis experts, including economists, financial policy experts, and mathematicians from across the region came together at IIASA in Laxenburg, Austria for a scientific workshop on the methodologies to understand the challenges and potential for economic cooperation and integration in the region. 

“This is not about politics – it’s about economics, and the systems analysis methods we use to understand the impacts of economic policy,” says Elena Rovenskaya, Acting Program Director of IIASA’s Advanced Systems Analysis Program, which organized the workshop.  IIASA has a long history of conducting integrated scientific work across countries, even during times of political tension. 

“A meeting like this is the antithesis to what we see happening on the ground between Russia and Ukraine. We are reviewing the methodologies to assess the impact of trade agreements between the EU and countries in Eurasia,” says Michael Emerson, Associate Senior Research Fellow at the Center for European Policy Studies in Belgium.  

One problem with planning economic integration is that different countries use different methods to make economic decisions. With different economic models, researchers come up with different projections for the consequences of decisions, making trade agreement and integration more challenging. The workshop at IIASA, part of a larger project to assess Eurasian economic integration, included participants from IIASA’s National Member Organization countries such as the Russian Federation, Ukraine, and the USA, as well as experts from the European Union and representatives of the European Commission, World Bank, Eurasian Development Bank, Eurasian Economic Commission and other international institutions. 

During the workshop, the researchers conducted a comprehensive review of the current frameworks used around the world to assess economic and social consequences of integration between nations and regions, and the strengths and weaknesses of each method.  

Evgeny Vinokurov of the Eurasian Development Bank Center for Integration Studies in Russia presented a report at the workshop on methodological approaches available. He says, “There is a need for timely expert assessment of economic integration between the EU and the Eurasian Economic Union. A comprehensive EU-EEU agreement could become reality by the 2020’s, but before that happens we need research to understand the economic assessment and design of such a prospective deal.”  

David Gould of the World Bank says, “In fact, trade between the CIS [Commonwealth of Independent States] and Europe has been increasing in recent years. Integration is already taking place, despite recent events.”  

The workshop concluded that a multi-mode approach combining different methods like computable general equilibrium (CGE) models, gravity models, econometric modeling and long-term economic growth models can be used to holistically assess foreign trade, tariff and non-tariff barriers, and causal relationships between the economies of different respective countries. With this systems approach, the researchers plan to carry out a comprehensive, independent analysis of the prospects for Eurasian integration.  

The next workshop in the framework of the project will be dedicated to trade issues between the EU, Russia, Belarus, Kazakhstan, and Ukraine. Peter Balas, Deputy Director General of the European Commission Directorate G for Trade Strategy and Analysis, Market Access, said that he was interested in bringing relevant stakeholders to the project from the EU, and will take an active part in designing that workshop. 

Valery Heyets, Academician and Vice President of the National Academy of Sciences of Ukraine says, “This workshop provided an extraordinary opportunity for a fruitful exchange of opinions, results, and feedback between the researchers from different countries and international organizations to increase understanding and identify potential ways towards sharing interests and achieving common goals. At the following stages, the project needs to concentrate on deepening and integrating methodologies for comprehensive systems analysis of perspectives associated with the Euro-asian integration, addressing local and global issues of energy, food, environment security." 

IIASA Deputy Director General Nebojsa Nakicenovic says, “Eurasian integration and cooperation offers many win-win opportunities, but the challenge will be to build infrastructures such as electric, natural gas and transport grids as a backbone for vigorous development and as a catalyst for a transformation toward sustainable future.” 

IIASA Director General and CEO Prof. Dr. Pavel Kabat chaired the closing and concluding session at the meeting in which it was agreed that a review/position paper reflecting state-of-the-art in the field of modeling the effects of economic cooperation and integration in Eurasia would be produced by a core group of the workshop participants. It was also agreed that the project and associated with it meetings should extend to sectorial issues on the Eurasian space, such as transport and energy. Kabat says, “IIASA was the obvious place to hold such a meeting, with our history of bridge-building research across the Cold War divide, and groundbreaking reports from the early 1990’s on the economic transition of the former Soviet Union.”

(left to right): Peter Balas, Evgeny Vinokurov, Vladimir Yasinskiy, Valery Heyets, Pavel Kabat, Anastasia Stepanova, Stanislav Naumov, Elena Rovenskaya, David Gould, Evgeny Hotulev, Dmitry Korshunov, Michael Emerson


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Last edited: 11 March 2014

CONTACT DETAILS

Elena Rovenskaya

Program Director

Advanced Systems Analysis

T +43(0) 2236 807 608

Workshop Details

Find the workshop concept, program, and participants.

International Institute for Applied Systems Analysis (IIASA)
Schlossplatz 1, A-2361 Laxenburg, Austria
Phone: (+43 2236) 807 0 Fax:(+43 2236) 71 313