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BISHKEK — The Western sanctions utilized towards Russia in an effort to stop an invasion of neighboring Ukraine could have a trickle-down impact on many smaller international locations with shut financial ties to Moscow, specialists say.
A kind of international locations is Kyrgyzstan.
With the US, European Union states, and plenty of different Western international locations asserting sanctions on February 21-23 towards Russia for its recognition of separatist entities in Ukraine, these results are already being felt.
Even earlier than the popularity announcement by the Kremlin, the worldwide monetary rankings company Moody’s put Kyrgyzstan — together with Belarus, Tajikistan, Moldova, and Armenia — on a listing of nations probably to be affected by sanctions on Russia, the U.S. enterprise journal Forbes reported.
“If sanctions are imposed, they are going to have an effect on the [Commonwealth of Independent States] international locations, which have shut financial, monetary, and vitality ties with Russia by means of numerous channels. It can even have a unfavourable impression on their exterior positions,” Moody’s mentioned in a examine.
Parviz Mullojanov, a researcher at Sweden’s Uppsala College, informed RFE/RL that if the Russian ruble devalues considerably, “the currencies within the international locations in [Central Asia] may even depreciate.”
One of many first financial measures in Kyrgyzstan that may be hit as a result of sanctions towards Moscow are the various hundreds of thousands of {dollars} in remittances from the estimated 1 million Kyrgyz migrant staff in Russia.
Even when the battle is native, it might have an effect on commerce [with countries abroad]. We noticed the injury in 2014 when the battle within the Donbas escalated.”
In line with the Nationwide Financial institution of Kyrgyzstan, greater than $2.77 billion was transferred to the nation from overseas by migrants in 2021.
Past the sanctions, there may be concern {that a} large navy assault by the estimated 190,000 Russian forces amassed in and close to Ukraine would additionally immediately damage the Kyrgyz financial system.
Kyrgyz politician Ravshan Jeenbekov informed RFE/RL that an armed battle between Russia and Ukraine would have extreme financial penalties for Kyrgyzstan, which is a member of the Russia-led Eurasian Financial Union with Armenia, Belarus, and Kazakhstan.
“To begin with, oil and gasoline costs will rise,” he mentioned. “Everyone knows that Russia is essential in [the energy] market. Secondly, Russia is likely one of the largest exporters of wheat on this planet.”
Jeenbekov cited different financial points prone to have an effect on Kyrgyzstan.
“As a result of worldwide monetary establishments are prone to sever or in the reduction of their enterprise with Russia, the nation’s financial and monetary state of affairs is prone to worsen. It can inevitably have an effect on the lives of our migrants [and result in fewer jobs and therefore less in remittances],” he mentioned.
Kyrgyzstan purchases numerous drugs, flour, meat, and confectionery merchandise from Ukraine, provides of which might all be affected by a navy battle.
Kyrgyzstan will get nearly all of its gasoline and gasoline from Russia, importing greater than 1 million tons of Russian gasoline a yr, with Russian gasoline big Gazprom supplying the nation with its pure gasoline.
A disruptive navy battle between Russia and Ukraine might additionally have an effect on Kyrgyzstan’s financial ties with Ukraine, which has an annual commerce turnover of some $100 million with Kyrgyzstan.
Kyrgyzstan purchases numerous drugs, flour, meat, and confectionery merchandise from Ukraine, provides of which might all be affected by a navy battle.
Azamat Ismailov, a spokesman for the Kyrgyz Chamber of Commerce in Kyiv, mentioned many Ukrainian companies have established ties with Kyrgyz firms lately.
“Even when the battle is native, it might have an effect on commerce [with countries abroad]. We noticed the injury in 2014 when the battle within the Donbas escalated,” he mentioned. “The commerce turnover between the 2 international locations was about $100 million and dropped to $30 million. Such a state of affairs might occur once more.”
Mullojanov mentioned as quickly because the Russian financial system begins to endure, it should have an effect on the entire Central Asian international locations and that the implications can be “extreme.”
He added that whereas Russia is embroiled within the state of affairs in Ukraine and coping with the ensuing sanctions, Central Asian international locations might gravitate nearer to China.
Written by Pete Baumgartner in Prague primarily based on reporting by RFE/RL Kyrgyz correspondent Bakyt Asanov in Bishkek. RFE/RL’s Kazakh Service contributed to this report.
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