Sanctions on Russia do not harm everyone. On the contrary. Armenia and Georgia, two former satellite states in the Caucasus region, have emerged from the first year of the Moscow-Kiev conflict with double-digit economic growth: in 2022 the Armenian GDP rose by 12.6% and that of Georgia by 10.1% , according to data from the International Monetary Fund. In 2023 the pace will slow to 5.5% and 4%, reflecting a “general moderation” in the region.
The leap in both economies, explains a survey by the broadcaster CNBC, is due to the intensification of commercial and financial relations with Moscow, taking advantage of the state of isolation inflicted on Russia by the various waves of sanctions from Western governments. Even if now it is the same governments in conflict with Moscow, including those within the EU perimeter, who are mediating retaliatory measures against third countries that have been used – or have been used – as commercial “intermediate partners”: countries that offer a neutral ground for the transit of goods, allowing to circumvent the strict taxes in Moscow on imports and exports.
The strategy had already been contested by some Western leaders and also affects other countries en route to Moscow, such as Kazakhstan and Turkey. The European Bank for Reconstruction and Development has identified and noted the role of “intermediaries” offered by countries that can act as a bridge between conflicting economic systems, benefiting from them in the trade balance. In 2023, Russia emerged as Georgia’s second-largest import partner and third-largest export partner, after increasing the country’s product sales by 79 percent and its purchase of Georgian goods by 7 percent.
Moscow is directly Armenia’s first partner for both imports and exports, in the face of an increase in flows to and from Russia also recorded by minor economies such as Kyrgyzstan, Tajikistan and Azerbaijan. Armenia and Georgia have not disclosed the details of their trade, although data from the national statistical institute of Georgia reveal that automobiles, oil and other “commodities” have affected the bulk of trade on a general basis. If we go into detail, notes CNBC, the total number of vehicles, aircraft and ships exported to Russia quadrupled in 2022 and doubled compared to 2021. Some sources report an increase of 1000% or 500%, a leap considered “suspicious » for speeds and volumes.
The phenomenon has not gone unnoticed and could officially be included in the next rounds of sanctions imposed on Moscow. A spokesman for the European Commission revealed to CNBC that the EU executive is working to counter the “redirection” of certain flows of goods from third countries that operate as “gateways” in favor of Russia. The president of the European Commission, Ursula von der Leyen, said that the 11th round of sanctions in Brussels will also focus on combating the “circumvention” of the measures already inflicted on the Russian economy. At stake, indirectly, there are also the aspirations of opening up to the West of the countries now being targeted for the role of intermediation with Moscow. The first example is precisely Georgia, which is working on its candidate status as a member of the EU.