Russia’s war in Ukraine weakens economies in Central Asia and Caucasus – zimo news


Since the Russian invasion of Ukraine, a new tourist route has emerged at the end of February. The travel agency sells packages to their Russian clients that include a round trip to Tashkent, the capital of Uzbekistan, two nights in a hotel, a visit to a local bank and a commitment to a credit card.Since Visa and Mastercard ceased operations in Russia following Western sanctions, Russians have been Banking tourism. In Kazakhstan, Russians and Belarusians opened nearly 12,000 bank accounts in a matter of weeks, authorities announced on April 8. The interdependence between Russia and its neighboring economies is a strength and a weakness because of the linguistic and historical ties that bind them together.

In this case, the Russian and Ukrainian economies are expected to contract by 11.2% and 45% respectively in 2022, which will have a significant impact, according to the latest World Bank forecast. The war is expected to cost the South Caucasus and Central Asian countries 1.5 and 2.3 percentage points of growth, respectively, in 2022. Economic shocks vary from country to country. Some rely on remittances from migrants working in Russia, such as Kyrgyzstan and Tajikistan, the poorest countries in the region, and these alone account for 26% and 16% of their gross domestic product.

“Russian migrant workers worry that the devaluation of the ruble will reduce their income, Yulia Florinskaya, a professor at the Russian State Academy of Economics and Public Administration (Ranepa) in Moscow, explained. Because of rising prices, they have to spend more in Russia and send less money back home. » Migrant workers make up 5 to 6 percent of Russia’s working population. “So far, there has been no mass departure, Note MI Florinskaya, but there is a possibility of a noticeable exodus starting in the fall, when the economic crisis will be at its worst and seasonal work will end. »

Four-fifths of the country’s immigrants come from Uzbekistan, Kyrgyzstan
or Tajikistan

Four-fifths of the country’s migrants come from Uzbekistan, Kyrgyzstan or Tajikistan. “However, mass returns could sharply increase unemployment as these economies struggle to absorb the large influx of workers,” he said. Asian Development Bank (ADB) economist Jules Hugot said. Gross domestic product (GDP) will fall in countries that depend on the Russian market, such as Georgia, where tourist arrivals and wine exports are expected to fall. Instead, the activities of Russian companies or businessmen in neighboring countries could be disrupted. Such is the case at the Rusal Armenal plant in Armenia, a subsidiary of Rusal giant Rusal, which alone supplies half of the country’s exports to the United States.

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