Multipolar World

Exports to Russia through the back door

Jorge Costa Oliveira

Direct exports from China to Russia increased significantly after the beginning of the war in Ukraine (+64.2% since 2021, of which +46.9% in 2023). Turkey’s exports followed the same path (even more so in percentage terms). The same happened with China’s indirect exports to Russia, through Central Asia, which also grew significantly (probably for plausible deniability for questionable goods).

These exports facilitate Russia’s shift to a war economy, providing it with civilian goods that allow Russia to stop producing them, affecting resources to the production of armaments. These increases in direct exports from China and Turkey compensate for the drop in direct Russian imports from Europe resulting from sanctions and export controls imposed by the EU.

Interestingly, although direct European exports to Russia have decreased, indirect exports have increased. Let’s start with the Baltic countries, the most strenuous defenders of unconditional support to Ukraine in the war initiated by the invasion from the Russian Federation. Latvia’s exports in 2022 show a significant increase to former USSR countries – doubled to Kazakhstan, and tripled to Kyrgyzstan. This trend has increased – in [Nov] 2023, Latvia’s exports of machinery and electrical equipment to Kyrgyzstan had increased by 3100% (!) compared to the pre-war period. In 2022, Lithuania’s exports to Kazakhstan doubled compared to the previous year, and those to Kyrgyzstan increased 9x (!). In the case of Estonia, in addition to the same trend, there is the fact that a company of the prime minister’s husband continued to do business with companies in Russia.

One might think that this is due to still existing connections between Baltic and Russian companies from other times and Russian-speaking populations in the Baltic countries. However, companies from the Czech Republic and Poland – both without Russian-speaking populations – also increased their sales to Kyrgyzstan exponentially (c. 1900% since the start of the war). There are exceptions (e.g., Finland). But in the main European economy – Germany – the picture is no different. In 2022, German exports to Kyrgyzstan increased sixfold (automobiles and their components increased by 5500% (!) compared to the pre-war period), doubled to Uzbekistan, and increased by 76% to Kazakhstan (the increase is >€1000 million). This trend of German companies exporting to Russia via third countries (also Armenia, Georgia, Azerbaijan, and Turkey) continued in 2023.

In 2022, Central Asia’s exports to Russia increased by 30%. Uzbekistan increased its exports to Russia by >50%, Kazakhstan by 25%, and Kyrgyzstan by 250%. In 2023, this trend is expected to have intensified. And this does not account for the “underground” exports.

Direct EU exports to Russia fell by -€4000 million in March 2022. But EU exports to Central Asia increased by +€1000 million/month since then. As long as the EU does not put an end to this new stepping stone path of European companies into the Russian market, no one will believe in its political commitment to Ukraine.

Categories Multipolar World Opinion