Reports suggest that Germany is bypassing sanctions imposed on the Russian Federation by the European Union. By increasing trade with Central Asia, Germany may be utilising the region as an intermediary to sell embargoed goods to Russia. Exports from Germany to countries bordering Russia have risen sharply in the first quarter of 2023, growing most significantly with Kyrgyzstan.
According to Reuters, exports to Kyrgyzstan increased 949% between January and March. Meanwhile, the value of German exports to Russia slumped by more than 47% in the last year, reflecting restrictions introduced by the EU.
The issue is exacerbated by the increase in German exports to other states which border Russia. German exports to Georgia rose by 92% in the first quarter of 2023, whilst trade to Kazakhstan rose by 136%, to Armenia by 172% and to Tajikistan by 154%.
The surge in trade, which also grew significantly last year, reinforces fears that sanctioned goods are still ending up in Russia after being sold to them by neighbouring states.
One might argue that there is a minor cultural background to this relationship. German Mennonites began settling in Kyrgyzstan in the late 16th century. By 1990, the ethnic German population in Kyrgyzstan grew to approximately 100,000. After the Soviet collapse, many returned to Germany. However, as of 2021, the ethnic German population in Kyrgyzstan stands at 8,132. Some cultural ties remain.
More importantly, the deepening trade connections between Germany and Kyrgyzstan can be contextualised by Germany's longstanding reliance on Russian energy resources. In 2020, Russia supplied more than half of Germany's natural gas, about a third of its oil, and roughly half of its coal imports. This relationship that began as a peacetime alliance has now transformed into a conduit for aggression.
The optics have been poor for Germany.
The country only halted imports of Russian oil via pipeline on January 1, 2023, and its role in supporting the Russian economy has been extensively criticised. The decision was made even though the EU embargo exempts pipeline flows as to change perceptions of Germany's role in the conflict. However, trade to Central Asia and, therefore, Russia is continuing.
In May, German Finance Minister Christian Lindner stated that "the circumvention of sanctions against Russia is unacceptable," despite Germany specifically avoiding sanctions through trade with Central Asia.
In the West, there is clearly no end to the politics of hypocrisy. Our globes most powerful states all institutionalise insincerity to obfuscate their intentions, associations, and trade structures. Germany’s trade with Russia, through Central Asia or not, is another example of the Machiavellian instincts of our bloated neo-liberal states.
Emil Avdaliani, Professor of International Relations at European University in Tbilisi, Georgia, has shown how Russia is trading with Germany by expanding their own commerce with Kyrgyzstan.
He has said that the trade turnover between Kyrgyzstan and Russia has increased steadily over the past decade. However, in 2022 it grew by 40.3%, reaching a record US$3.2 billion, the highest recorded since 1994. Throughout 2022, imports from Russia to Kyrgyzstan rose by 18.8% to US$2.3 billion, while exports of goods to Russia increased to US$964 million.
Avdaliani has also stated that the trend is continuing as Germany also expands their exports to Kyrgyzstan. In Q1 2023, bilateral trade between Russia and Kyrgyzstan increased by 26%. Even though in the first four months of 2023, trade between Kyrgyzstan and the member states of the Eurasian Economic Union (EAEU) fell 7.6% short of its height in Q1 2022, Avdaliani explains that this means Russia has increased its overall EAEU share of Kyrgyz trade.
Bilateral trade between Russia and Germany continues with Kyrgyzstan as the intermediary.
The European Union's special envoy for implementing sanctions, David O'Sullivan, has questioned the destination of many goods imported to Central Asia. O'Sullivan has stated that as of March 2023, 770 items imported from the EU to other countries had been found in Russian military equipment used in Ukraine.
Until at least 2021, Russia continued to buy weapons directly from the EU. This is despite an embargo that has prohibited arms sales to Russia since 2014. Investigate Europe have stated that ten member states have exported €346 million worth of military equipment. Now Germany continues to circumvent sanctions and embargoes by trading with Russia through nations which border the Federation.
Complicating the implementation of sanctions, Armenia, Belarus, Kazakhstan and Kyrgyzstan are in a customs union with Russia, meaning goods sent from the EU to Kyrgyzstan can be resold to Russia without further controls and customs duties.
After a six-fold rise in German exports to Kyrgyzstan following Russia's invasion of Ukraine, exports of motor vehicles and parts to Kyrgyzstan grew exceptionally in the first quarter of 2023, rising more than 4,000% at the beginning of the year. Furthermore, metal, chemical and clothing exports each increased by more than 1,000% in the same period.
German exports to Turkey also rose by nearly 37%. Turkey is in a customs union with the EU, and Industrial goods can enter duty-free from the EU. However, Turkey does not participate in EU sanctions, but, under pressure from the Group of Seven (G7), Turkey has agreed to stop the transit of Western goods prohibited under sanctions to Russia.
Furthermore, Japan announced additional sanctions on Russia after the G7 summit in May to help stop the evasion of sanctions involving third countries. Then, in June, the EU agreed to an 11th package of sanctions, which focuses on people and countries circumventing existing trade restrictions.
Germany's surge in trade with Kyrgyzstan and its neighbouring countries seems more than coincidental. The pattern reveals a strategy, raising concerns about the sincerity of Germany's commitment to international sanctions and its public stance regarding the conflict. Most importantly, it clearly shows the inescapability of late-stage capitalist system of global economics.
Image: Jörg Braukmann
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