My latest with The Diplomat looks through the latest round of economic downturn(s) in Central Asia - and where the blame should lie:
While Kazakhstan has managed to stave off both presumed inflation and another round of devaluation – coming on the backs of Russia’s self-sanctions and a severely weakened ruble, respectively – Astana may yet be living on borrowed fiscal time. Further, the brunt of the economic fallout from foundering Russian economy is still to reach those nations most dependent on remittance rates from migrant laborers in Central Asia. Kyrgyzstan and Tajikistan have already seen discernible dips in their substantial remittance rates, and more may be coming. As the IMF notes, “A 1 percentage point decrease in Russia’s GDP would reduce remittances to [Central Asian] countries by about 1½ percent.” A decimated ruble will also continue pressuring the Kyrgyz and Tajik currencies, “feeding quickly into inflation.”
The bottom, it seems, has yet to come. And with closer economic integration via the Eurasian Economic Union on the horizon for Kazakhstan, Kyrgyzstan, and potentially Tajikistan, this initial dip may be a signal of what to expect for the foreseeable future. Coupled with tumbling oil prices, massive fields experiencing delay upon delay, and a remarkable energy shortage looming, those nations who’ve tethered themselves closest to Russia look set for little economic optimism, no matter what Kazakhstan’s newest ads on CNN may claim.