to the end of the “multi-vector policy”?

The countries of Central Asia are highly dependent on Russia, and the sanctions imposed on the country after the invasion of Ukraine are likely to have strong economic and social consequences for the states of the region. Radio Ozodi assesses the situation.

Novastan reproduces and translates here an article published on March 9, 2022 by the Tajik branch of the American media. Radio Ozodi.

The economic and political isolation of Russia after the invasion of Ukraine complicates the situation for the country and its allies in Central Asia. According to experts, the economic difficulties of the Central Asian countries are likely to affect their social stability and position in relation to various centers of power.

According to the UK’s National Institute for Economic and Social Research (NIESR), the crisis could shrink the global economy by 1%, to $1 trillion (about 907 billion euros), and global inflation could double by 2023.

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The countries of Central Asia are heavily dependent on the Russian economy. Kyrgyzstan and Kazakhstan are members of the Eurasian Economic Union (EAEU), while Turkmenistan, Tajikistan and Uzbekistan remain the main economic and political partners of Russia. Regional observers agree that the uncertainty around the Russian-Ukrainian conflict will have a negative impact on the economy and stability of the Central Asian countries.

Chain reaction

The consequences of the Russian military invasion of Ukraine were felt from the very first days. The region’s foreign exchange market, already dependent on Russia, was already volatile, hit hard. During the week of fighting in Ukraine, the Russian ruble lost almost three times its value, which inevitably hit the currencies of Central Asia.

Eight million Central Asians could lose a third of their income, according to official Russian statistics for 2021. And if households lose a third of their purchasing power, countries lose the same amount in foreign currency.

Read also on Novastan: War in Ukraine: Central Asia hit by ricochets

“Remittances provide two-thirds of the goods we need. If this money is not imported, we will be able to buy only a third of the necessary goods, and as a result we will have a severe shortage in stores, which will increase prices and increase poverty.”explains Pairav ​​Chorchanbiev, an economics expert from Dushanbe. “If we do not take effective measures, this situation will have a ripple effect for all sectors”he adds.

Economic dependency

In 2021, according to Russian statistics, the number of immigrants from Uzbekistan to Russia amounted to 4.5 million, from Tajikistan – about 2.4 million, and from Kyrgyzstan – more than 900 thousand.

The World Bank estimates that remittances from Russia will account for 11% of Uzbekistan’s gross domestic product (GDP), 30% of Tajikistan’s GDP, and 28% of Kyrgyzstan’s GDP. At the end of 2021, the financial institution forecast a 3.8% increase in remittances in 2022. It now seems clear that this will not happen in the near future.

According to the Russian Foreign Ministry, Russian investment in the region is estimated at $50 billion (45 billion euros). Of this amount, 36 billion (33 billion euros) was invested in Kazakhstan, more than 10 billion (9 billion euros) in Uzbekistan and 1.5 billion (1.4 billion euros) in Tajikistan. There are also more than 10,000 Russian companies and joint ventures operating in the region. Russia’s trade turnover with the countries of Central Asia in 2020 exceeded $28 billion (25 billion euros).

As a result of the sanctions, experts predict a reduction in investment from Russia, as well as from other countries that consider the Central Asian states unreliable.

“Possible backlash”

Some experts instead believe that Russia’s isolation from the West could lead to closer cooperation with its closest partners, including Central Asia.

Nurgul Akimova, a Kyrgyz economist, said: “I think that after the end of hostilities, the number of import contracts for energy carriers and other products will increase. Russia and the countries of Central Asia are often at enmity,since most consumer goods come from eastern countries. »

Tajikistan and Kyrgyzstan are more prone to social problems

Economic observer Abdumannon Cheraliev believes that Tajikistan and Kyrgyzstan are the countries most at risk: they are most dependent on Russia. “If the war continues, more immigrants may return. Moreover, it is safe to assume that with a decrease in income, they will agree to sign contracts and go to war in Ukraine.”he declared.

Read also on Novostan: The plight of Tajik migrants who settled in Russia

The Radio Ozodi service in Uzbekistan reports that a citizen of this country was sent to Ukraine, and this despite the prohibition by Uzbek law on participation in wars in third countries.

The expert pointed out that following the depreciation of the national currency, prices for essential goods such as flour and butter rose. “Lower incomes and higher production costs will increase discontent and the likely risk of social instability”– said Abdumannon Cheraliev.

Reduced multi-vector political space

However, deteriorating economic performance, as well as the possibility of social instability, are just some of the problems that the Central Asian countries will face. Growing tensions between the West and Russia limit their ability to pursue diverging policies, confirmed by the March 2 United Nations (UN) General Assembly vote condemning the Russian invasion from Ukraine.

141 countries voted in favor of a document calling on Russia to end the war in Ukraine and withdraw its troops from the country and officially recognized borders, including Crimea. Only five countries, Russia, Belarus, Syria, North Korea and Eritrea, voted against the text.

Kazakhstan, Kyrgyzstan and Tajikistan were among the 35 countries that abstained. Uzbekistan and Turkmenistan did not take part in the voting.

Difficult balance

“It is clear that all the countries of Central Asia have been trying for 30 years to find a balance between international forces such as China, Russia and the West. In the past, this policy was a good strategy. Thus, it was possible to benefit from all parties. Now that the situation is getting more complicated, this policy is becoming a bit out of touch with reality.”This was stated by Russian historian Sergei Abashin in an interview with the Kyrgyz edition of Kloop.

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He believes that in the long term, countries will face the question of which side to support. “This could lead to a stronger China,” China says: I will take you under my wing and protect you. This is one of the possibilities for the escalation of the crisis.”– said Professor Sergei Abashin.

Russian troops invaded Ukraine on 24 February. Moscow regards this as a military intervention, while Kyiv and the West consider it aggression. Russian troops crossed the border of five regions of Ukraine. Fights are going on in Kharkov, Kyiv, Donbass and in the south of Ukraine. Western countries have imposed tough sanctions against Russia.

Khursand Khurramov for Radio Ozodi

Translated from Tajik by Jeremy Pato

Edited by Laura de Polignac

Reviewed by Jacqueline Ripart

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