For nearly fifteen hundred years, valuable goods were transported along the Silk Road from China and other parts of Asia to Europe and the Middle East. If the route changed over time, this route always passed through the regions of Central Asia or always involved local traders.
Today this trade is flourishing again, but it involves the transport of goods from the USA, Japan, Western Europe and China to Russia via countries such as Armenia, Georgia and Kyrgyzstan.
Democracies are aware that this trade strengthens President Putin's regime and facilitates his war of aggression in Ukraine. However, their governments do very little to stop these exchanges for fear of disrupting national industrial interests. The G7 and the European Union [UE] must strengthen their export controls.
“leak rate”
On the face of it, these controls work fine: American goods exports to Russia fell to $0.6 billion (0.55 billion euros) in 2023, compared to $5.8 billion in 2019 before Covid-19, a notable decline of 90 %. The same applies to Japan (-60%) and Germany (-70%) over the same period (national data according to Haver Analytics).
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But something is wrong: Russia's goods imports rose from 254 billion in 2019 to 304 billion in 2023 (+20%), according to the Russian Central Bank.
Two reasons explain this. First, China has significantly increased its exports to Russia (110 billion in 2023, compared to 50 billion in 2019, an increase of 125%). Secondly, Western goods enter Russia via third countries.
American exports to Central Asia and the Caucasus increased from 2.6 billion in 2019 to 4.1 billion in 2023 (+ 60%), an increase immediately after the Russian invasion… Japan's exports increased by over the same period 67% and 72% for Germany. This increase affects all western countries as well as all countries in Central Asia and the Caucasus. About a quarter of the volume of goods that is no longer exported to Russia goes to this region. A similar “leakage rate” of around 30% can be observed in German exports of cars and car parts.
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It is entirely possible that this leak involves dual-use items, such as parts for automobiles and military vehicles. Even if this is the case, Western goods enable the reorientation of the Russian economy toward war production, which is almost as bad.
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