Western sanctions against Russia can affect its partners

Photo: Western sanctions against Russia can affect its partners / Kazakhstan

Baku, Azerbaijan, April 4

By Elena Kosolapova - Trend: Western sanctions against Russia can also affect the economies of its neighboring partner countries.

Kazakhstan and Belarus, who share the same Common Economic Space with Russia and countries planning to join the Customs Union and the Common Economic Space - Armenia, Kyrgyzstan and Tajikistan - are under the highest threat. These five countries are closely tied to Russia's economy, and any sanctions brought against Russia will have negative repercussions on each of these countries.

Belarus is already under US European sanctions, and has been so for several years. However, several countries that are close to Russia expressed concern over the sanctions.

It is early to talk about effect of these sanctions on Russian and its neighboring economies because the package of sanctions is not defined yet. The topic is being discussing at the highest level and some experts make different forecasts. However no one could calculate possible damage for economies of closest Russian partners yet.

In Kazakhstan some experts believe that possible sanctions against Russian oil companies would cause trouble for Kazakh oil transportation through Russian territory and Caspian Pipeline Consortium System in particular. Other experts forecast that sanctions could affect the Kazakh financial system, which is connected with the Russian financial market.

"The effect of sanction against Russia on the Kazakh economy will depend on the sphere of future sanctions. The imposed sanctions have not touched upon Kazakhstan directly. They are not global and not very extensive," Kazakh policy analyst Dosym Satpayev told Trend. "But if the West bans the activity of some large Russian companies or freezes some accounts it will surely affect the Kazakh economy. Our republic collaborates with many Russian companies in different segments."

But the West continues negotiating with Russia on Ukraine issue and hope still remains that the sanctions will not be extended, Satpayev said.

The expert does not believe that Western sanctions will influence the plans of the countries which earlier expressed interest in joining the Customs Union. On the contrary the process could accelerate because Russia which earlier paid additional attention to attract Ukraine to the Customs Union will now have more time for other potential member-countries, he said.

Armenia has already announced that it would not revise its plans to join the Customs Union. And Kyrgyzstan and Tajikistan were not in a hurry to implement their intentions concerning the Customs Union even before Ukrainian crisis. In particular in 2013 Kyrgyzstan rejected the developed roadmap for accession to the Customs Union, arguing that it did not meet the interests of the Kyrgyz economy and took three-year transition period for economy preparation.

"Kyrgyzstan is an unpredictable country. The Kyrgyz government has recently changed, the parliamentary elections will take place in 2015. In other words the government may not have enough time to address the issues of the Customs Union. Especially because some anti-Customs Union tendencies exists in Kyrgyzstan, and some opposition powers oppose it," Satpayev said.

Meanwhile Tajikistan should pay more interest in the Customs Union at least in order to join the common labor market because a large number of Tajik citizens work in Russia and Kazakhstan, expert believes.

Meanwhile Russian policy analyst on Central Asia, Alexander Knyazev believes that the sanctions will not affect the economies of Russia and its partners.

"The sanctions imposed on Russia are no dangerous. These targeted sanctions can not affect the economy not only Russia partners, but even Russia itself," the regional program coordinator of the Institute of Oriental Studies of the Russian Academy of Sciences Alexander Knyazev told Trend.

The expert does not believe that the Western countries impose serious sanctions on Russia, because such sanctions can hit at its own interests.

In short, future of economies of Russia and a number of its neighboring countries will depend on further developments of Ukrainian crisis and on the will to take decision convenient for all the parties.

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