First published on the NIDO Russia Telegram channel.
???? Ukraine has completely banned the import of goods from Russia. This was stated by the Minister of Economy of the country.
Who will suffer from this?
▪️ By the end of 2021, Russia exported goods to Ukraine worth $8 billion, and imported goods worth $4 billion.
▪️ For many years, Russia has consistently been in the top three economic partners of Ukraine. In 2018, the Russian Federation took first place in the ratings. Second in 2019 and 2020.
▪️ Russia has added $250 billion worth of benefits to the Ukrainian budget in 1991-2013 due to non-market energy prices, soft loans, economic and trade preferences provided by Russia.
▪️ Russia invested $3 billion to buy Ukrainian Eurobonds in 2013.
▪️ Russia has invested $104 billion equivalent to all debt obligations of the USSR (including Ukraine), which Russia assumed upon itself.
▪️ Russia sold gas to Ukraine at $268.5 (44.6% discount) per 1 thousand cubic meters of gas for Ukraine at the beginning of 2014 (the base price in Europe at that time was $485)
▪️ Russia has invested $610 million in Ukraine as Ukraine's recognized debt to Russia
▪️ $9.5 billion was the foreign trade turnover of Ukraine with Russia in 2021
▪️ Ukraine ranks 18th place in terms of trade with the European Union while Russia ranks 5th place in terms of trade with the European Union
▪️ Russia ranks 3rd place in terms of trade with Ukraine while Ukraine ranks 14th place in terms of trade with Russia in 2020 according to OECD.
▪️ And for Russia, Ukraine is not even among the top ten trading partners.
While it is obvious that one party (Ukraine) suffers the most, it is still a negative development for both parties.
1. It reduces the the GDP per capita and as well as wealth of both parties, although at different scales.
2. It causes inflation of global prices of essential commodities
3. It causes global poverty, famine and acute lack of heating
4. It destroys the competitive advantages of lots of business
5. It causes bankruptcy of businesses, loss of jobs and increase in unemployment.
6. It increases the migration risks to other countries which are not in the best position to cope with this migration flow.
We can only hope that this decision is reconsidered by the Ukrainian government.
Dr. Godwin Ibe
Chairman, NIDO Russia
Sources: kremlin.ru, Federal Customs Service of Russia, State Statistics Service of Ukraine, European Commission, sputnik.ru, oecd.world, open sources
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