KIEV: Ukraine will have lost approximately $400 million worth of exports to Kyrgyzstan and Kazakhstan by the end of 2016 due to Russia’s restrictions on freight transit through its territory, the Ministry of Economic Development of Ukraine has said. The drop is equivalent to 0.3 percent of Ukraine’s GDP, the ministry estimated in a report it issued on Sept. 14. In general, exports of Ukrainian goods to Central and Eastern Asia and the Caucasus declined by 35.1 percent in the first half of 2016 compared to the same period of 2015. Trade to Kazakhstan alone fell by 45.5 percent.
The Kremlin first imposed a ban on the transit of Ukrainian goods through Russian territory to Kazakhstan in January 2016, and it has since been prolonged until 2018. The Kremlin also added amendments to its transit ban decree on July 1, stating that the restrictions had come into effect for Kyrgyzstan too.
According to the decree, freight from Ukraine bound for Kazakhstan and Kyrgyzstan is subject to sealing and tracking on the basis of Glonass technology, a Russian analogue of GPS, and has to go though the Belarusian border. As an alternative, Ukrainian exporters have started to use a sea and land route through Georgia and Azerbaijan to the Kazakh port of Aktau. On Sept. 14 the Ministry of Economic Development of Ukraine filed a complaint at the World Trade Organization (WTO) against Russia, calling the transit restrictions groundless and not in compliance with WTO norms.
Ukraine is one of the largest exporters of sugar and confectionery to Central Asia. It also sells nuclear reactors, boilers and machinery, grain products, ironware, paper, cacao, meat, and pharmaceuticals. In an effort to maintain Ukraine’s position as one of the main exporters to Kyrgyzstan, the Ukrainian Embassy and the Kyiv-based Chamber of Commerce and Industry are to hold an investment forum in Bishkek on Sept. 19-22.
