Some Central Asian countries are trying to course correct after being accused of helping Russia evade sanctions.

As the Russia-Ukraine war continues to reshape the geopolitical landscape, nations worldwide grapple with the resulting political and economic upheaval. The imposition of sanctions and countermeasures, along with the unraveling of established production and supply networks, pose stark challenges for some nations, while others see their very survival at stake. Central Asia finds itself in a particularly precarious position, deeply impacted by the turmoil.

Landlocked and flanked by powers such as Russia, China, Afghanistan, and Iran, the Central Asian states are historically and economically intertwined with Russia—a relationship that is manifested in their burgeoning trade figures. From 2019 to the close of 2023, Uzbekistan’s trade with Russia doubled to a noteworthy $10 billion. Similarly, Kazakhstan saw its trade with Russia climb from $19.6 billion in 2019 to $21.3 billion within just ten months of 2023, with Kyrgyzstan also reporting a 37% surge in trade in 2022, reaching $3.4 billion.

Yet, this uptick in commerce should not be misconstrued as an evasion of the sanctions against Moscow. Kyrgyzstan, a pivotal trading hub, exemplifies the region’s intricate dynamics. Its role as the most expedient land route for Chinese goods bound for CIS markets and Europe has fostered significant economic activity around its principal bazaars, Dordoya and Kara-Suu. These marketplaces have become a thorn in the side of the Kyrgyz government, operating with a degree of autonomy that challenges state authority.

In March 2023, Kyrgyz Prime Minister Akylbek Zhaparov decried the market owners for inciting protests against reforms meant to ensure entrepreneurial transparency and thwart smuggling. By December, tensions escalated, prompting the Kyrgyz president to engage directly with Dordoi traders. Emphasizing the reforms’ aim to combat the underground economy, the president highlighted the discrepancy between the actual volume of goods from China and the significantly lower figures reported, revealing the extent of the shadow economy.

The strife in Ukraine has not only laid bare the shadow economic issues but also intensified internal political dynamics within Kyrgyzstan, providing a window to combat the entrenched ‘trade mafia.’ The West, with a nuanced understanding of the complexities, observes with a discerning eye. U.S. Secretary of State Antony Blinken acknowledged the meticulous monitoring of sanction adherence, signaling a nuanced approach that accommodates the economic realities of its Central Asian partners.

Kyrgyzstan is not alone in its commitment to systemic solutions to the re-export dilemma. Kazakhstan has vocally rejected becoming a conduit for sanction-dodging, despite its deep economic ties and extensive border with Russia. Astana’s prompt and prudent response to geopolitical shifts, a testament to its “multi-vector” foreign policy, reflects a deliberate balance in its international engagements. The country has implemented electronic consignment notes to enable real-time tracking of goods, a move mirroring Kyrgyzstan’s efforts.

Uzbekistan, too, has pledged to honor sanctions concerning the re-export of European goods to Russia. The European Union, for its part, has reciprocated with a calibrated stance, focusing on a limited array of products crucial to the Russian military effort. EU Special Envoy for Sanctions, David O’Sullivan, after a year of active dialogue with Tashkent, conveyed this targeted approach.

The Central Asian republics, particularly those deeply connected with Russia, thus present a coherent and pragmatic posture. Tajikistan and Kyrgyzstan, heavily reliant on Russia for economic and military support, treat the sanctions with a mix of acute sensitivity and pragmatic understanding, refusing to serve as conduits for contraband.

In sum, the Central Asian states, while acutely affected by the sanctions regime, navigate these troubled waters with a blend of caution and comprehension, steering clear of becoming the shadowy byways for sanction evasion.