Presented by Eric Livny, Lead Regional Economist for Central Asia at EBRD, during SITE 2023 Development Day conference.

1. OFFICIAL USE
War and Trade in Eurasia
Eric Livny
Lead Regional Economist, Central Asia and Mongolia
European Bank for Reconstruction and Development

2. 4.7%
6.4% 5.8%
6.3%
4.20%
8.3%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Kazakhstan Mongolia Uzbekistan Turkmenistan Kyrgyz Republic Tajikistan
2022 2023f Jan-September 2023* Central Asia'22 EBRD COO'2022
One often hears: “Central Asian economies have proven resilient
to Russia’s war on Ukraine”
19 December, 2023 2
Real GDP growth, y/y, 2022-2023
Source: National authorities and EBRD
Note: Weights for CA and COO averages are based on the values of gross domestic product in 2022 at market
exchange rates;
*Growth rates as of H1 for Tajikistan and Mongolia
Central Asia
EBRD countries of operation
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3. But Central Asian economies are actually booming
Positive developments on all fronts:
• Strong growth in both 2022 and 2023
• Currencies stabilized after a short period of turbulence in Feb-Mar 2022
• Inflation peaked in late 2022 or early 2023, standing at close to 10% in almost all countries;
monetary policy toeing the IMF party line
• Public debt declined as a share of GDP (on strong growth), int’l reserves ($+gold) provide at least
six months of import cover (14 in Uzbekistan)
• Banks extremely profitable (on non-interest income), highly liquid and well capitalized
• Tax revenues up by a quarter or more, helping finance investment and large salary increases
• Politics stabilized in Kazakhstan (under new leadership) and the typically volatile Kyrgyzstan
(under new strong leader), creating a window of opportunity for painful tariff reforms
• Strong progress on regional integration – delineation of borders (Kyr-Uzb, Kyr-Taj), soaring intra-
regional trade and FDI, discussion of joint mega projects – manufacturing (e.g. automotive), large
HPPs, China-Kyrgyzstan-Uzbekistan railway, transport and multimodal logistics. Water scarcity a
major concern.
• Credit ratings of all CA countries improved in the span of January-November 2023
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4. International trade has become a key growth driver –
on Russia’s demand and elevated commodity prices
19 December, 2023 4
Official trade activities dramatically increased across CA
in 2022 and 2023 (except for gold exports)
Source: CEIC
Driven by Russia’s demand for luxury products, electrical
appliances, machinery, dual use goods, food and textile
-60%
-40%
-20%
0%
20%
40%
60%
80%
Kyrgyzstan Uzbekistan Tajikistan Mongolia Kazakhstan Turkmenistan
Change in trade flows, y/y, %
Exports'22 Imports'22
Exports Jan-Aug '23 Imports Jan-Aug '23
145%
49%
27%
-17% -22%
-4%
5%
21.40%
47%
63.70%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Kyrgyzstan Uzbekistan Kazakhstan Mongolia Tajikistan
Change in exports to Russia, y/y, %
Exports to Russia'22 Exports to Russia'Jan-Aug 2023
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5. Actual trade volumes maybe even higher, judging
by mirror statistics (the case of Kyrgyzstan)
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0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Source: CEIC
Chinese exports to Kyrgyzstan and Kyrgyz imports from China
Chinese exports to Kyrgyz Republic, US$ million
Kyrgyz imports from China, US$ million
15,5bln US$
4.1bln
US$
7,5bln US$

6. -100%
-50%
0%
50%
100%
150%
200%
250%
300%
1/1/2020
2/1/2020
3/1/2020
4/1/2020
5/1/2020
6/1/2020
7/1/2020
8/1/2020
9/1/2020
10/1/2020
11/1/2020
12/1/2020
1/1/2021
2/1/2021
3/1/2021
4/1/2021
5/1/2021
6/1/2021
7/1/2021
8/1/2021
9/1/2021
10/1/2021
11/1/2021
12/1/2021
1/1/2022
2/1/2022
3/1/2022
4/1/2022
5/1/2022
6/1/2022
7/1/2022
8/1/2022
9/1/2022
10/1/2022
11/1/2022
12/1/2022
1/1/2023
2/1/2023
3/1/2023
4/1/2023
5/1/2023
6/1/2023
7/1/2023
Change in German exports to
Russia, world and CCA4
(Armenia, Georgia, Kazakhstan
and Kyrgyzstan) relative to 2017-
2019 monthly average
Intermediated trade: the case of Germany
24 January, 2023 6
CCA4: +166%
Russia: -59%
Note: in brackets are Jan-July 2023 export values
Russia’s
invasion of
Ukraine
World: +33%
Source: CEIC, National authorities, EBRD calculations OFFICIAL USE
(US$: 3.12bn)
(US$: 920.4bn)
{US$: 5.6bn)

7. Intermediated trade: the case of Sweden
24 January, 2023 6
Source: CEIC, National authorities, EBRD calculations OFFICIAL USE
-150%
-100%
-50%
0%
50%
100%
150%
200%
250%
01/2020
02/2020
03/2020
04/2020
05/2020
06/2020
07/2020
08/2020
09/2020
10/2020
11/2020
12/2020
01/2021
02/2021
03/2021
04/2021
05/2021
06/2021
07/2021
08/2021
09/2021
10/2021
11/2021
12/2021
01/2022
02/2022
03/2022
04/2022
05/2022
06/2022
07/2022
08/2022
09/2022
10/2022
11/2022
12/2022
01/2023
02/2023
03/2023
04/2023
05/2023
06/2023
07/2023
World Russia CCA4
CCA4,
+138%
World, +4%
Russia, -
49%
Russia’s
invasion of
Ukraine
Change in Swedish exports to
Russia, world and CCA4
(Armenia, Georgia, Kazakhstan
and Kyrgyzstan) relative to 2017-
2019 monthly average

8. -50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
2017-2019
Average
01/2020
02/2020
03/2020
04/2020
05/2020
06/2020
07/2020
08/2020
09/2020
10/2020
11/2020
12/2020
01/2021
02/2021
03/2021
04/2021
05/2021
06/2021
07/2021
08/2021
09/2021
10/2021
11/2021
12/2021
01/2022
02/2022
03/2022
04/2022
05/2022
06/2022
07/2022
08/2022
09/2022
10/2022
11/2022
12/2022
01/2023
02/2023
03/2023
04/2023
05/2023
06/2023
07/2023
Change in Turkiye's exports to Russia Change in Turkiye's exports to CA
Change in Turkish exports to Russia
and Central Asia relative to
2017-2019 monthly average
Increased exports to both Russia and Central Asia:
the case of Turkey
Note: Data call-outs for Jan-July 2023 export values
Russia’s
invasion of
Ukraine
Source: CEIC, National authorities, EBRD calculations OFFICIAL USE
Russia:
+172%
Central Asia:
+117%
US$ 6.6bln
US$ 4.16bln

9. -100%
-50%
0%
50%
100%
150%
200%
2017-2019
Average
01/2020
02/2020
03/2020
04/2020
05/2020
06/2020
07/2020
08/2020
09/2020
10/2020
11/2020
12/2020
01/2021
02/2021
03/2021
04/2021
05/2021
06/2021
07/2021
08/2021
09/2021
10/2021
11/2021
12/2021
01/2022
02/2022
03/2022
04/2022
05/2022
06/2022
07/2022
08/2022
09/2022
10/2022
11/2022
12/2022
01/2023
02/2023
03/2023
04/2023
05/2023
06/2023
07/2023
Change in Chinese exports to Russia Change in Chinese exports to CA
Increased exports to both Russia and Central Asia:
the case of China
Russia’s
invasion of
Ukraine
Source: CEIC, National authorities, EBRD calculations OFFICIAL USE
Russia: +180%
Central Asia:
+163%
Change in China’s exports to Russia
and Central Asia relative to 2017-
2019 monthly average
US$ 62.8bln
US$ 34.17bln

10. -200%
0%
200%
400%
600%
800%
1000%
1200%
1400%
1600%
2017-2019
ave.
01/01/2020
01/02/2020
01/03/2020
01/04/2020
01/05/2020
01/06/2020
01/07/2020
01/08/2020
01/09/2020
01/10/2020
01/11/2020
01/12/2020
01/01/2021
01/02/2021
01/03/2021
01/04/2021
01/05/2021
01/06/2021
01/07/2021
01/08/2021
01/09/2021
01/10/2021
01/11/2021
01/12/2021
01/01/2022
01/02/2022
01/03/2022
01/04/2022
01/05/2022
01/06/2022
01/07/2022
01/08/2022
01/09/2022
01/10/2022
01/11/2022
01/12/2022
01/01/2023
01/02/2023
01/03/2023
01/04/2023
01/05/2023
01/06/2023
01/07/2023
Kyrgyzstan is the champion of Germany’s
“intermediated” trade among CCA4
Change in German exports to Russia, Georgia,
Kazakhstan, Armenia and Kyrgyz Republic
relative to 2017-2019 average
Kyrgyz Republic:
+1009%
(US$ 0.42bln)
Armenia: +143%
(US$ 0.31bln)
Kazakhstan: +98%
(US$ 1.93bln)
Georgia: +98%
($US$ 0.45bln)
Russia: -68%
(US$ 5.63bln)
Note: in brackets are Jan-July 2023 export values
Russia’s
invasion of
Ukraine
Source: CEIC, National authorities, EBRD calculations OFFICIAL USE

11. OFFICIAL USE

12. Kyrgyzstan’s Dordoi bazaar: the region’s showroom for
cheap Chinese merchandise
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13. A considerable share of Kyrgyz re-exports consists of
manufactured goods (e.g. telephones and computers),
machinery and transport equipment
OFFICIAL USE
0%
20%
40%
60%
80%
100%
120%
140%
0%
5%
10%
15%
20%
25%
30%
Source: National Statistical Committee of the Kyrgyz Republic, author’s calculations
Share in imports, 2021
Share in imports, 2022
Growth, %, 2022 over 2021 (RHS)
In 2023, Kyrgyzstan’s National Statistical
Committee stopped publishing detailed
trade data (at the HS 10-digit level) and
reports only 4-digit product codes. This
limits the ability to identify e.g. dual use
products. Still, we are able to discern
tremendous increases in re-exports of
measuring tools, electronic integrated
circuits, metal drilling machinery (account
for 5.5% of exports to Russia), knives and
cutting blades (1.4%), tubes, pipes and
hoses (0.8%). In particular, let us note the
very strong increase in exports data
transmission equipment, including
telephones (+2932% y/y), and parts of
aircraft and spacecraft (+151% y/y).

14. Kyrgyzstan’s imports and exports of motor vehicles
Kyrgyzstan’s imports and exports of motor vehicles (number of cars)
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HS-4
digit
code
Motor cars
and other
motor
vehicles
2021 2022 Jan-August, 2023
Imports
from
third
countries
Exports
Exports
to
Russia
Imports
from
third
countries
Exports
Exports
to
Russia
Imports
from
third
countries
Exports
Exports
to
Russia
8703 7,543 437 308 34,802 1008 843 93,072 6227 3926
The scale of re-exports might be underestimated. In January-August 2023, Kyrgyz car exports to Russia posted more
than sixfold increase (in value) and accounted for 7 per cent of total exports to Russia (compared to just 1 per cent a
year ago). Concurrently, car imports increased more than 8 times in value and more than 5 times in volume. That
said, there is a significant gap between the quantity of imported and exported cars (see Table 4). Anecdotal evidence
suggests that cars are imported to the Kyrgyz Republic, where they undergo customs clearance and registration
before being moved to Russia and other EAEU countries.

15. Russia’s demand is a boon for both re-exports and local
production. The case of Kyrgyz textiles
OFFICIAL USE
The vacuum created by the exit of
major international brands from
Russian market enabled the Kyrgyz
Republic to speed up its production
activities and increase exports. In 2022,
Kyrgyz textile producers quickly
ratcheted up production (up 40 per
cent year on year) and increased their
sales to Russia (textile exports added
171 per cent year on year and
accounted for 44.8 per cent of exports
to Russia). Wholesalers in Dordoi (the
largest market in Central Asia)
experienced a doubling of salaries and
a tripling of sales in the first half of
2023 (y/y). In 2022, Wildberries,
Russian online marketplace, recorded a
x2.4 increase in the number of
registered Kyrgyz sellers.
Exports of selected textile products to Russia
4-digit
HS
code
Product category
Share in exports to
Russia
% increase
2021 2022
Jan-
Aug
2023
2022
over
2021
Jan-Aug
2023 over
Jan-Aug
2022
5205
Cotton yarn other
than sewing thread
0.00% 7.90%
no
export
2,256,241
%
NA
5209
Woven fabrics of
cotton
0.00% 4.60% 0.01% 782,401% -96%
6110
Jerseys, pullovers,
cardigans, waistcoats
and similar articles
1.50% 1.60% 0.73% 194% -71%
6115 Hosiery 0.30% 1.20% 0.05% 934% 861504%
6204 Female apparel 2.50% 1.80% 1.87% 100% 4%
6206
Female blouses,
shirts and shirt-
blouses
0.40% 1.00% 0.44% 571% -75%
6302 Home textile 0.02% 0.30% 1.25% 3,663% 283%

16. Labour migration from CA to Russia and money transfers in the
opposite direction reached unprecedented levels
19 December, 2023 16
• The volume of money transfers to Central Asia
skyrocketed on:
• “banking tourism” from Russia, increasing deposits
and boosting banking sector profits, and
• labour remittances, increasing on very strong
demand for Central Asian workers
• For example, Uzbekistan has seen a 110% increase in
remittances in 2022, bringing them to more than $16.9bln
or 23% of GDP. In H1 2023, remittances to Uzbekistan
declined by more than 20% y/y reflecting high base.
• The number of labour migrants registered in Russia in
2022 climbed to almost 3.5mln, with Central Asia
accounting for about 90% of this figure. Tajikistan,
Uzbekistan and Kyrgyzstan have each seen an increase in
the number of new migrant workers – by 51.8%, 35.1%
and 17.7%, respectively.
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2%
3%
4%
5%
6%
7%
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Unemployment rate in Russia, %
January 2020-September 2023

17. Russian businesses and individuals actively relocate to
Central Asia, likely creating sustainable linkages
0% 50% 100%
Kazakhstan
Uzbekistan
Tajikistan (reported
in news)
Growth in the number of firms with
Russian participation in 2022, %
Source: National authorities, local news outlet
0
20,000
40,000
60,000
80,000
100,000
120,000
Kazakhstan Kyrgyz Republic Tajikistan Turkmenistan Uzbekistan
Number of incoming Russian migrants to
Central Asia
2021 2022
OFFICIAL USE

18. Contacts
19 December 2023 21
Eric Livny
Lead Regional Economist,
Central Asia and Mongolia
Email: LivnyE@ebrd.com
Find us on social media
OFFICIAL USE