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Fitch Solutions: Russia's political and economic influence will decrease on the CIS region

22 December 2022 16:25 (UTC +04:00)

In 2023, we believe Russia’s standing in Central Asia and the Caucasus will decline further as the war in Ukraine diverts resources and attention away from the country’s former "sphere of influence," APA-Economics reports citing the report of Fitch Solutions for 2023.

Not only will Russia be in a weaker position to enforce its influence in the regions, Central Asian and Caucasus governments will make active efforts to reduce their reliance on Russian economic and security support. While for some of the larger, more powerful countries – like Kazakhstan – Russia’s relative impotence offers an opportunity for greater independence, smaller states like Armenia might seek to replace Russia with new partners.

In our view, Russia’s loosening grip on the region will be visible across Russia-led institutions (like the Collective Security Treaty Organisation) and in investment projects. In this vein, we expect to see greater investment in strengthening trade routes and infrastructure that circumvent Russia, as broad-based Western sanctions have significantly reduced Russian trade competitiveness. For example, on November 26, officials from Georgia, Turkiye, Azerbaijan, and Kazakhstan agreed to develop further the ‘Middle Corridor,’ a trade route connecting Turkiye to China. Similarly, we expect the Georgian government to revitalize the shelved Anaklia deep water port project on Georgia’s Black Sea Coast. Previously, the project had been scrapped for a number of political reasons, including Kremlin opposition to the plan.