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EU countries should seek help from governments in the Caucasus and Central Asia to solve the problem of evading sanctions against Russia Wrote The Economist.
The material states: “The economies of Central Asia and the Caucasus appear to be benefiting from the war in Ukraine.” The publication states that the economies of the five Central Asian countries will grow by a total of 6% in 2023, compared to 4% in 2022; Armenia’s economy will grow by 8%, compared to 5% in 2022. The logistics industry is also developing rapidly, with freight volume growing at a rate of 20% per year.
He pointed out that this is bad news for European politicians The Economist“We expected some kind of covert activity, but not on the scale we are seeing now,” an unnamed EU official told the publication.
The EU has threatened secondary sanctions against third countries and European producers exporting to them, but has only taken action against a handful of companies. For every company blacklisted, there is another one registered elsewhere, the publication wrote.
“In order to find a real solution, it is necessary to seek help from the governments of the Caucasus and Central Asia. This is not an easy task. Politicians in the region value closeness to Russia and often benefit from breaking the rules. However, Europeans can offer them benefits,” he believes The Economist.
For example, the issue is €270 million in the form of EU aid, loans and contracts From the distribution He then mentioned Armenia, which has begun shutting down companies that trade with Russia.
“Alternatively, Europe could use the whip instead of dessert. It could extend export bans on third countries or restrict their banks’ access (to the international interbank SWIFT system). This could anger Europe’s remaining gas sources (Azerbaijan and Armenia) and hurt European companies. The question is, does the EU think the benefits of a stronger sanctions regime on Ukraine are worth it? Given his current approach, no,” he wrote The Economist.
The publication states that despite severe Western sanctions, the Russian economy is still growing, and trade “continues to flourish” with the help of intermediaries in third countries. EU exports to Armenia, Azerbaijan, Georgia, Turkey and the five Central Asian countries will increase to 46 billion euros in 2023, a 50% increase from 2021. This is equivalent to three-quarters of the reduction in European exports to Russia between 2021 and 2023. At the same time, the largest increase in trade through third countries is for goods that are currently subject to strict export restrictions.
therefore, The EconomistIt is clarified that from 2021 to 2022, EU automobile exports to Kazakhstan doubled, and in 2023 they increased by another 23% to 6.4 billion euros. Compared with 2021, Armenia’s imports of chemicals, IT equipment and electronic products from Europe increased by 2, 5 and 4 times in 2023, respectively. In addition, the material states that there are some smuggled cross-border goods that are not included in official trade statistics.
According to the publication, the EU is trying to close “loopholes”, but that means it has to “get tough with the governments of some of Europe’s most troublesome neighbours”.
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