Subscribe to Editor’s Digest at No Cost
Roula Khalaf, the Editor at FT, shares her top picks through this weekly newsletter.
Russian authorities are reportedly feeling the impact of western pressure, which they believe is blocking their attempts to strengthen relationships with former Soviet states and forge economic partnerships with nations in the global south. This perspective comes from a leaked report.
During a strategic meeting led by Prime Minister Mikhail Mishustin last April, an internal presentation revealed how Russia’s ongoing conflict with Ukraine has complicated its rapport with some of its closest allies. The analysis acknowledges that western sanctions and strategic economic moves have successfully created rifts between Moscow and its key trading partners.
This report was presented to several high-ranking government officials and executives from Russia’s largest state-owned companies. Notably, hardliners like Sergei Karaganov and Alexander Dugin, both known for their extreme viewpoints, were also in attendance.
The report outlines a grand vision where Russia aims to re-establish itself in global commerce by anchoring a Eurasian trade bloc to compete with the US, EU, and China in terms of economic clout.
Creating this “macroregion” is portrayed as a significant long-term ambition that could transcend ongoing discussions with the west about Ukraine’s future, aiming to solidify Russia’s position on the global stage.
The proposed bloc would connect Russia to the global south by permitting exchanges of raw materials, bolstering financial and transport links, and sharing a unified “world view,” especially concerning crafting new global rules and sanctions policies.
Nevertheless, the report openly acknowledges the ongoing challenges to Russia’s global comeback. It points out that western nations have effectively enticed central Asian countries into aligning with sanctions by offering market access and transport routes that sidestep Russia.
Meanwhile, Russia’s allies have been capitalizing on these sanctions by pushing Russian businesses out of their territories, taking charge of import-export channels, and shifting production away from Russia. Central Asian countries have also apparently demanded extra fees to offset the risks linked to breaching sanctions.
To retain central Asia within its sphere, Russia must adopt a long-term strategy. The report advises Moscow to appeal to their shared history, honor their sovereignty, and understand that winning the conflict in Ukraine will not dissolve western sanctions. “Close ties with Russia will inevitably bring challenges,” it states.
The report further explores how central Asian nations are leveraging Russia’s “vulnerability” and pursuing integration without Moscow, as seen in their involvement with the Organisation of Turkic States. These countries are evolving, adopting English as a second language, aligning with western educational systems, and sending their leaders for schooling in the west.
Ultimately, the nations will need to “decide on their position regarding Russia,” though the report does not elaborate further.
Kazakhstan, the largest economy in the region, has opposed the invasion, refused to acknowledge Russia’s territorial claims, and strived to adhere to western sanctions. Conversely, Kyrgyzstan has allied closely with Russia, serving as a key facilitator for potential sanctions evasion.
The report highlights Belarus as Russia’s strongest ally, contrasting President Alexander Lukashenko’s previous calls to economically diversify from Russia with his recent assertion of united allegiance with Moscow.
Nonetheless, the evolution of the Eurasian Economic Union, which includes Belarus, Armenia, Kazakhstan, and Kyrgyzstan under Russian leadership, is also facing “systemic challenges.” These challenges include sanctions risks, discrepancies in payment systems following Russia’s expulsion from the Swift system, and Moscow’s currency controls to mitigate the sanctions’ impact.
A representative for Mishustin was reached for comments but did not respond.