Moody’s outlines Russia’s role in global economy — RT Business News
The country remains a dominant economic power but its authority is challenged by Western sanctions, according to the rating agency
Russia’s economic pull in the Eurasian Economic Union (EAEU) remains strong despite geopolitical tensions and Western sanctions, according to Moody’s. The rating agency, however, noted that the growing uncertainty is undermining Moscow’s role as a major diplomatic player and economic hub.
According to the report, the conflict in Ukraine has led Central Asian countries to reassess their trade routes, export markets and sources of investment as they seek to diversify. This could spur regional economic growth and transform labor markets, Moody’s wrote. The conflict is having repercussions on the world stage, especially in the former Soviet Union countries of the Commonwealth of Independent States (CIS), he added.
The report predicts that increased cooperation and infrastructure development between Central Asian countries will reduce Russia’s pivotal role, as more diverse regional trade routes emerge as alternatives to the historic “hub and spokes” model that links Moscow to the former Soviet republics.
“We expect Russia’s waning power on the world stage to reshape geopolitical alliances in the CIS, particularly in Central Asia. China, the United States, the EU, but also Turkey and Iran will play an increasingly important role,” Moody’s said.
Meanwhile, trade between Russia and Central Asia has continued to rise, jumping 28% in 2022 year-on-year, Moody’s said. The report says economic cooperation has been growing within the Russian-led free trade zone.
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Official statistics show that mutual trade between EAEU member states has reached a record high of $83.3 billion so far this year.
The EAEU, which is based on the customs union of Russia, Kazakhstan and Belarus, was established in 2015. It was later joined by Armenia and Kyrgyzstan. This year, Iran sealed a memorandum on free trade with the bloc. The union is designed to ensure the free movement of goods, services, capital and workers between member countries.
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