Top 15 Countries Whose Economies Depend On Russian Trade

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Three EU economies face serious exposure, while Central Asia dominates 

The Statistica website has produced an excellent graphic illustrating which countries depend most on Russian trade. This is a useful tool for analyzing risk and opportunity – the top three countries for example are all members of the Eurasian Economic Union (EAEU) which includes Russia. Three European Union member states make the list, suggesting their economies may come under serious pressure, while overall there has been a specific shift east – another sign that Russia has long planned for a Eurasian and Asian, rather than Western reliant economy.

The list is reproduced below.

The Losers

Of these countries, the three Baltic states of Estonia, Latvia and Lithuania all face considerable economic trade exposure to Russia which they will all need to somehow make up. Latvia and Lithuania are also significant trade partners with Ukraine, a market that is now facing serious depletion, while Lithuania also picked a fight with China last year, closed its Embassy and established trade ties with Taiwan instead. It remains to be seen how far Lithuania can retain a position of being loudly critical while replacing significant trade partners with far smaller economies. Russin transit trade between these countries and the rest of the EU has also been destroyed. The current situation now represents significant risks for these countries with their associated EU member nations also facing serious GDP decline and problems concerning energy supplies in the coming months.

The Winners

The Eurasian Economic Union scores highly, with members Belarus, Armenia, and Kyrgyzstan all rounding off the top three positions, and Kazakhstan in eighth position – they all retain Free Trade status with Russia.

Armenia stated in April it wishes to further develop its Russia trade, while Belarus bilateral trade with Russia is at record levels and additional talks to further enhance this are underway. Kazakhstan has had near 30% increases in EAEU trade this year, while its larger economy is more immune to any Russian economic fallout. The final EAEU member, Kyrgyzstan, is also booming, its foreign trade turnover was up nearly 20% last year while Russia’s e-commerce MNC, Wildberries, has just opened up in the country and will further enhance bilateral trade.

Also apparent are the members of the Commonwealth of Independent States (CIS) which is not a free trade bloc per se, but whose members all have bilateral Trade Agreements with Russia. These include Tajikistan, whose bilateral trade with Russia increased 25% last year, Uzbekistan, whose EAEU trade turnover reached slightly under US$4 billion in Q1 2022, Georgia and Azerbaijan,  whose GDP growth rates are expected to be higher than that of the EU in 2022, Mongolia, a rail bridge between Russia and China, and whose Russia bilateral trade grew by 24% in 2021, and Moldova, another CIS member state also looking to negotiate a full FTA with the EAEU.

While the results may not be surprising, they do indicate that Russian trade is developing at a significant pace in Central Asia, and that the EAEU is developing into a significant regional resource. Interestingly, as the EAEU is also negotiating FTA with at least 30 other countries across Asia (including India) and Africa (including Egypt ), the member EAEU nations may see their overall reliance on Russia as a complete factor reduce as other FTA kick in. In many ways, the EAEU is serving as a partial trade cushion for Russia when facing EU sanctions.

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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at russia@dezshira.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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