The Impact of the 11th EU Sanctions Package on EU-Central Asian Relations
On June 23, the EU approved the 11th package of sanctions against Russia over its invasion of Ukraine, aimed at stopping third countries from helping Moscow circumvent pre-existing trade sanctions. EU officials have been concerned about a growing demand for EU products from Russia’s Central Asian neighbours. As an example, Armenian exports to Russia more than quadrupled between 2022 and 2023, and are now worth more than €328 million.
The newly imposed sanctions prohibit the passage of a broad range of goods and technology through Russia, specifically targeting items that could potentially support the country’s military or security industry. The most significant novelty is imposing restrictions on the sale of sensitive dual-use goods and technology to third countries that could subsequently sell it on to Russia.
This package of sanctions comes after a number of years of increasing cooperation between Central Asia and the EU. Hence, they pose a question about the future direction of cooperation between the two regions and the impact that the sanctions could have on Central Asian countries.
From the 2000s onwards, the EU gradually enhanced cooperation with Central Asian countries, in the hopes of addressing security concerns originating partly from Afghanistan. The region’s mineral wealth, gas and oil reserves, and deposits of gold, uranium, and rare metals made it attractive to the Union. The cooperation saw a new strategy in 2019 titled “New Opportunities for a Stronger Partnership”. Between 2014 and 2020, funding under the EU’s Development Cooperation Instrument amounted to €1.1 billion ($1.2 billion) in grant funding, technical assistance, and direct budget support.
From 2022, countries in Central Asia have seized the chance to diversify their foreign policy choices by building closer ties with the EU. In one of two high-level trips to Central Asia in 2022, European Council President Charles Michel called the first-ever meeting with Central Asian leaders “a powerful symbol of our reinforced cooperation and a strong signal of the EU’s commitment to this region.” The geopolitical situation created by the war in Ukraine has so far enabled the EU to step up its position as the largest aid donor to the region.
Today, one of the EU’s main interests in the region is Central Asian countries’ dual role as a source of energy and a transit route for East-West trade—two core priorities that have increased following the Ukraine war. Recognising the significance of oil and gas in diversifying their energy sources beyond Russia, the EU aims to enhance its involvement in these sectors. For instance, in October 2022, the Union signed a memorandum of understanding with Kazakhstan, specifically focusing on accessing raw materials.
Although the EU’s role might be growing in the region, yet, Russia remains an important security and economic actor. Russia keeps its labour market open to economic migrants from Central Asia and hence serves as a crucial lifeline to households in the region. Remittances are a particular important instrument of Russian influence, as they constitute 32.1 percent of GDP in Tajikistan and 31.3 percent in Kyrgyzstan. In Uzbekistan, remittances from Russia grew by 2.6 times in 2022 compared with 2021, reaching $14.5 billion and representing 18 percent of GDP.
What impact do the sanctions have on the region?
The perception and impact of Western sanctions vary across different countries. For instance, the Kazakhstan government has recently implemented a monitoring system to regulate all traded goods, making it more challenging to re-export sanctioned items. Mnatsakan Safaryan, Armenia’s deputy foreign minister, highlighted the dire economic and security consequences of non-compliance. Hence, the country has fully committed to complying with the sanctions and has already put in place strict regulations regarding electronics and other dual use goods. However, other countries such as Kyrgyzstan are more resistant to change.
In conclusion, Central Asian countries find themselves in a difficult position. Reducing trade relations with Russia, their largest trade partner and primary security guarantor seems like a mighty task ahead. However, the economic repercussions of existing sanctions and the potential for secondary ones pose an equally challenging alternative. Ultimately, secondary sanctions could see Central Asian states reorient towards Russia as well as China, Iran and Türkiye, which could in turn lead to the straining of diplomatic relations between the region and the West.