Sanctions on Russia and Economic Impact for Central Asia

CSAG STRATEGY PAPER
By: Identity withheld in accordance with partner nation agreement. (CSAG/CCJ5)
8 December 2023

 

Overview:

The Russian invasion of Ukraine has created a geopolitical challenge to the world order. The Russian attack violated not only Ukraine’s security and sovereignty, but also the rules-based international order and created a global economic, political and security crisis. Central Asian States (CAS) are among the most significantly affected by the conflict between Russia and Ukraine. Central Asia has deep historical, economic, political and trade ties with Russia. Any crisis and every event taking place in Russia will directly or indirectly affect the countries of Central Asia. At the beginning of the Russian invasion, the prices of oil and natural gas increased sharply, bringing huge economic benefits to energy exporting countries including Kazakhstan, Turkmenistan, Tajikistan, Kyrgyzstan, and Uzbekistan.

 

The energy region is becoming one of the centers of great power rivalry. The demographic structure, culture, linguistics, as well as the political map of the region, were formed and changed under the influence of the great powers. Neighbors such as Russia and China have influenced every development in the region. The Russian decision to invade Ukraine was a turning point for Moscow’s influence in Central Asia. The war is weakening Russia and damaging its image. Russia’s inability to protect its influence will be an opportunity for China to fill the gap. In the long term, China could replace Russia as the dominant power in Central Asia.

 

Key Points:

• With the Russian declaration of the independence of the Donetsk and Luhansk People’s Republics and the start of Russia’s declared “special military operation” in Ukraine, the West imposed extensive collective anti-Russian sanctions and a few foreign corporations suspended their activities in Russia.
• The Central Asian States (CAS) expressed a neutral stance on the Russia-Ukraine crisis, in particular Kazakhstan, Tajikistan and Kyrgyzstan abstained in the vote on the UN resolution against Russia and called on the parties to the conflict to resolve issues peacefully through diplomatic means.
• The Russian invasion of Ukraine damaged Moscow’s image in CAS, which further deteriorated as a result of Russian losses against the Ukrainian armed forces.
• To advance BRI, China is focusing on the trans-Caspian rail and transport route through Kazakhstan, Azerbaijan, Georgia, and Türkiye.
• Nevertheless, Russia and CAS continue to maintain close economic ties.

 

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