The West had warned for weeks in 2021 and 2022. If Russia sent its soldiers to Ukraine, it would see the fall, as Joe Biden had notably said, “ sanctions never seen before “. In just a few months, the country has become the most sanctioned country on the planet. But in two years, Moscow has adapted, always looking for new ways to circumvent retaliation. Central Asia, in particular, has become a vast reshipment platform, as in Kyrgyzstan.
From our special correspondent in Bishkek,
Dordoi markets then Osh market, in Bishkek, the capital of Kyrgyzstan. In one, there are trucks maneuvering through aisles of containers as far as the eye can see; in the other, piles several meters high of already pre-packaged bales. In both cases, there are military equipment shops galore.
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Shoes, clothing, backpack, pharmacy, small arms… The offer is varied and of high quality. There are all-purpose uniforms, and some with the very characteristic fabric of the Kremlin army. Regarding the latter, a seller who very visibly carries a flag in the three colors of Russia on his bag comments laconically: “ They come from different workshops and manufacturing locations, from Kyrgyzstan and China. Yes, it does say “Russia” on the jackets, but that’s just how it is. It is intended for the domestic market, for workers such as building caretakers for example. “, he said.
Kyrgyz building guards, mass buyers of military uniforms bearing the “Russia” logo, the explanation was, at a minimum, something to surprise. And this is not the only sector of the economy with astonishing performances. Logistics in Kyrgyzstan has seen its turnover skyrocket over the past two years.
Growing companies
A quick tour of the Smart Logistics company, with its operations director, confirms this. Vladimir Soloviev proudly gives us a guided tour of a rapidly expanding company, which is preparing to build yet another warehouse on the grounds of a former Soviet candy factory. In total, it is an area of 8 hectares, whose warehouse capacity today reaches 25,000 square meters. The third building is brand new and Vladimir Soloviev is very proud of it, with a touch of lyricism.
“ We want to leave a mark in the history of the development of our country which would take the country to a qualitatively different level. Because there’s nothing like it yet », he says, in the alley that leads there. “ It was built and launched in February 2023, last year, and its occupancy rate in April was less than 90% of what it is now. »
In the warehouse shown to RFI, there are bottles of mineral water of all kinds, Pepsi and Coca-Cola, hygiene products, all placed in large shelves under around fifteen meters of ceiling height. , thanks in particular to automated management of stocks and staff working hours. A screen in the warehouse even details the top 10 best employees of the month.
“ In 2022, we launched this project. During this period, we did not exceed 80 to 85,000 tonnes per year of stocks, explains Vladimir Soloviev. Thanks to the establishment of this space and the growth of our partners, we have reached 260,000 tonnes per year. » In two years of war, the volume processed has therefore multiplied… by three and a half. And here too, the explanation given is: “ Everything is aimed at the domestic market. »
Coca-Cola and Pepsi labeled “Kyrgyzstan origin”
Is this really possible? It is obviously impossible to say about this specific company. On the other hand, in Russia, on supermarket shelves and on their online sites, we find Coca-Cola and Pepsi labeled “ origin Kyrgyzstan “. Only Coca-Cola has a factory in the country, not Pepsi. This trade is not prohibited, but it says a lot about the new trade routes born from the new situation of sanctions. According to figures from IESEG Global Advisory, EU exports between the third quarter of 2021 and the third quarter of 2023 increased by 190% to Armenia, 349% to Uzbekistan and 621% to Kyrgyzstan.
“ This is the norm in the Eurasian Economic Union », explains Kubat Rakhimov. “ That is to say, goods that enter through Armenia, through Belarus, through Kazakhstan, through Kyrgyzstan end up on the Russian market, and the price is different. » In other words, higher, with the end consumer paying for a longer journey and numerous intermediaries.
“ We are a country that I affectionately call “Contrabandistan” “, adds this now independent consultant, ” that is to say, we are the hole through which a fairly large and, I would say, multi-billion dollar mass of goods from various countries enters. But the final consumer is Russia. Purchasing here in Kyrgyzstan can even be done directly by Russian buyers, through established channels. I think everyone understands that by officially doing some sort of customs clearance through the internal market, you remove any additional responsibility for where it will go, how it will happen. »
Towards secondary sanctions?
Sitting in the comfortable and elegant armchair of a café in the center of the capital, Kubat Rakhimov – also a member of the Valdaï club, an organization created by the Kremlin – has in any case, on the mysterious performances of the logistics sector and its leaders , sharp words: “ Leaders of logistics companies from Kyrgyzstan criticize Putin and the Kremlin’s actions in every possible way, say that Russia is the aggressor, and at the same time have no problem making huge money on the supply of products to Russia, helping it to circumvent sanctions. »
This phenomenon has been observed for a long time by Western countries and special envoys for compliance with sanctions regularly travel to these countries. The European Union does not have a policy of applying secondary sanctions. “ We are even at the limit of what we can do », Specifies a European diplomat stationed in Moscow. But the United States is starting to use this measure more and more often to enforce the arsenal of sanctions.
“I do not exclude the risk of secondary sanctions against the entire banking system or the entire country, resumes Kubat Rakhimov, but it is unlikely. You must have very serious proof for this, and this is an option that I rule out. » The authorities are much more cautious on the subject.
In a tweet dated November 28, 2023, Robin Brooks, chief economist at the Institute of International Finance (IIF), recommended imposing secondary sanctions on Kyrgyzstan, writing: “ One way to stop the flow of Western goods to Russia through Central Asia is to make an example of one country and use secondary sanctions. Kyrgyzstan is the perfect test. It is small, of no systemic importance, and very clearly facilitating the diversion of trade to Russia. »
One way to stop the flow of western goods to Russia via Central Asia is to make an example of one country and use secondary sanctions. Kyrgyzstan is the perfect test case. It’s small, not remotely systemically important and very clearly facilitating trade diversion to Russia… pic.twitter.com/kYDLmkHQUx
— Robin Brooks (@robin_j_brooks) November 28, 2023
In response, the Deputy Prime Minister of Kyrgyzstan, Edil Baisalov, declared that “ It doesn’t take a genius to understand that the growth of the Kyrgyz economy is real. Everything is not as you think. We have carried out significant administrative reforms, practicing good governance (i.e. we do not steal). »
Meanwhile, the official pre-2022 statistics on the country’s imports and exports have all disappeared from the official website. There remain other general data which confirm particularly astonishing economic performances over the past two years. Economist Azamat Akinfeev explains: “ Our last two years have historically been the most successful from an economic point of view. We had GDP growth in 2022 of almost 9%. In 2023, it is almost 7%. So these are huge numbers. Their budgetary revenues have doubled. All sectors of our economy are growing very quickly, especially the financial sector. : its net profit was multiplied by more than five. Nobody expected it. »
GDP per capita has increased by 80% in two years. But without benefiting everyone. Many of the poorest Kyrgyz still go to work in Russia.
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