In the changed political and economic situation, Russia’s neighbors, partners in the Eurasian Economic Union (EAEU) and other former Soviet republics over the past summer have dramatically increased the supply of their goods to Russia under siege from all sides. Against the background of Western sanctions and the strengthening of the ruble, international trade is rapidly restructuring. The export of goods to us has been increased not only in comparison with the spring collapse, immediately after the start of the military special operation in Ukraine, but also in comparison with 2021.
Belarus, Kazakhstan, Kyrgyzstan, Armenia, members of the EAEU, shipped us goods worth almost ten billion dollars by June, which is 15% more than in the same months of last year. Basically, Belarus is trying, which itself is under tough sanctions. And Armenia has almost doubled supplies to Russia, and Kyrgyzstan has more than doubled writes RBC, analyzing the trade statistics of the UN Comtrade database.
Deputy Director of the Institute of CIS Countries Vladimir Zharikhin thinks there’s nothing wrong with that:
– Those goods that were once delivered to Russia from Europe, we are replacing with others that are made in neighboring republics. In addition, as I understand it, we buy their goods for rubles. And the ruble, firstly, is solid, and secondly … we still have nowhere to put it. I myself buy Belarusian cheese and cottage cheese with pleasure.
“SP”: – But the President of Belarus Alexander Lukashenko in word and deed is on the side of Russia. As for the Kazakh President, Kassym-Zhomart Tokayev, he publicly declares that his country is not going to violate the Western sanctions regime against Russia, because in case of violation of sanctions, secondary sanctions from the West against the Kazakh economy will follow, and he cannot allow this . It declares something, but deliveries from Kazakhstan to Russia are growing. Including parallel import, which is now legally exercised without the consent of the copyright holder.
– The President of Kazakhstan needs to be understood. He inherited almost seventy percent of Kazakh industry in the hands of the Americans and the British. Therefore, he does not verbally condemn Western sanctions against Russia, but exports to Russia, including parallel ones, are increasing.
“SP”: – In principle, we did not see anything new: Georgia is bringing its wine to Russia, Uzbekistan is bringing cotton and fruits …
“Yes, and why should we consider it something unpleasant for us?” Was it possible to transport goods from Europe, but from the countries of the Eurasian Economic Union (EAEU) is it not good? But after all, they are not far to take, and they have excess production capacity. I do not see this as a problem, but rather a positive result. In the end, often due to inertia, those goods from neighboring countries that are quite consistent in quality were not bought by our importers before. There were established contacts with the same Poles, Germans, Italians. Well, now this niche has been vacated. Naturally, our neighbors immediately began to fill it. They, thank God, have been living in a market economy for thirty years, they know what to do. This is a normal process.
“SP”: – A small “break in the pattern” – a message that clothes and shoes are now being brought to us from Kyrgyzstan. We have long been accustomed to Belarusian shoes according to German and other European models, but not yet to Kyrgyz ones. What happens, Bishkek will soon become a competitor of Milan and Paris in the field of haute couture and ready-to-wear?
— Clothes have been sewn in Kyrgyzstan for a long time. For the past ten years, my wife has preferred to buy clothes of well-known brands, but at the same time, they are made in Kyrgyzstan. These are good quality models and sewn according to fashionable patterns. So this is not news either. Most likely, Chinese technologies are used there, but the models and colors are not inferior to European ones.
Thus, Kyrgyzstan exported goods to Russia worth $124 million in June, almost five times more than in June last year, the National Statistical Committee of the republic reported. This friendly republic, which previously “exported” only migrant workers, has significantly, tenfold expanded its exports of clothing and footwear to Russia: from $5 million in June of the previous year to $57 million now, which is 46% of total deliveries.
Although, after the introduction of tough anti-Russian sanctions by the US and the European Union back in February, the Federal Customs Service and the Bank of Russia stopped publishing statistics on exports and imports. There is also now the Eurasian Economic Commission, the regulatory body of the EAEU. But Kazakhstan, Kyrgyzstan and Armenia separately continue to disclose data on trade with Russia.
Apparently, the expansion of trade with the countries of the EAEU, and indeed with the countries of the former USSR, is natural. The ruble is strong. For goods that are produced in the countries of the former USSR or localized there, there are incentives to export them to Russia. After all, the national currencies of Kazakhstan, Uzbekistan and Belarus are extremely low against the ruble. The weakening of the currencies of these countries, as well as Armenia, against the ruble only means that the goods supplied to Russia from these countries are more competitive in price. Exports will support local industry and agriculture.
Only Ukraine does not seem to need support. The Kyiv regime announced a complete cessation of trade with Russia. But in reality, only exports to Russia became zero, while imports from our country to the independent remained at $76 million. Ten years ago, the trade turnover between the two countries was an order of magnitude higher.
Economist, ex-chairman of the Russian Armed Forces Ruslan Khasbulatov believes that what is happening can only be welcomed:
– It’s not bad. Previously, such circumstances developed within our European-Asian Economic Union that the main trade flows were by no means between the member countries of the EAEU. But circumstances forced to change tactics. Perhaps after the completion of the special operation (let’s hope that it ends successfully, and as soon as possible), this trend will strengthen, new ties will appear. Mutual trade flows will become stable. So, despite all the difficulties that have arisen not only around Russia, but also between its allies and the rest of the world, I see a positive side. This is a rather favorable trend, which to some extent softened the blows of the global, restrictive sanctions policy.
“SP”: – Everything, as usual, happens in full accordance with the proverb: “If there were no happiness, yes misfortune would help”?
– Yes it is. Still, entrepreneurship is able to quickly adapt to the situation. And people working in the state apparatus of our countries have learned something. They use every opportunity to somehow get out of the situation.
“SP”: – So you think that what is happening is not entirely spontaneous, but is controlled by someone?
— It is certain. They also understand that it is necessary to give both state and commercial enterprises an opportunity to live, to breathe life into the industries that are dying out due to recent events. Of course, officials are also trying. Among them appear smart and knowledgeable. And we see the overall result of the activity. And the heads of the countries themselves, as far as I follow at the Department of World Economy, understand the situation and react quite adequately…
Most recently, Germany was the leader in terms of exports to Russia – and now Belarus is ahead of it, becoming the second largest supplier of goods to the country, after China. And among the deliveries of Belarus to Russia are by no means only consumer goods, but also serious equipment, cars, cars, trucks, wheeled special equipment.
Although the composition of the current supplies is not disclosed, this is a military secret under the current conditions. Operational data on exports to Russia from Azerbaijan, Tajikistan and Turkmenistan are also not available. For greater secrecy, they learned to do without the use of the European SWIFT system in mutual settlements.
The re-export of goods from unfriendly countries through neighboring countries is also working with might and main. Cars, components and much more are being transported – all bypassing the sanctions. Moreover, cheaper parallel imports are in no hurry to rich Moscow, supplying the regions first.
Although the EAEU countries help Russia by importing the necessary imported components and components for the manufacturing industry, the restructuring of logistics chains from neighboring countries has increased costs for Russian importers. Partner countries do not forget themselves by setting margins on exported products: at least 5%, but can be 15-20%. So we should not forget about import substitution.
Of course, exports from Kazakhstan to Russia also include iron and steel flat products, inorganic chemistry, not to mention various plastics and bearings, devices and equipment, and even natural uranium. But, of course, most of us are interested in the fact that the assortment of Russian retail chains will not disappear in any way, the delicious Coca-Cola banned for import from America. It’s just that now she is “Made in KZ”.