Central Asia steps up trade with Russia

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Since the start of the war in Ukraine, exports and the sending of workers from that region to Russia have increased, according to new economic forecasts from the European Bank for Reconstruction and Development.

The war in Ukraine and Western sanctions have not only reshuffled the energy map of Europe. They have also disrupted the nature and volume of trade between Russia and its neighbors. In particular, Central Asia, which is expected to record solid growth of 5.7% this year, after 4.5% in 2022, according to new forecasts from the European Bank for Reconstruction and Development (EBRD), published on Wednesday September 27.

“Activity in this region is driven by government spending, raw material exports to China, earnings from exports and re-exports to Russia, labor migration to Russia and remittances sent home country,” says Beata Javorcik, chief economist of the institution.

After the introduction of economic sanctions in March 2022, direct exports from the European Union (EU), the United Kingdom and the United States to Moscow fell dramatically. But, in the process, sales from Europe to Armenia, Kazakhstan or the Kyrgyz Republic have increased, as have trade flows from Central Asia and the Caucasus to Russia, which have more than doubled since 2021 .

These re-exports of goods “can be used to circumvent sanctions, but on a limited scale”, estimates a study by the EBRD, an institution created in 1991 after the fall of the communist bloc, to support the transition from central and eastern Europe to the market economy.

This article is originally published on.lemonde.fr

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