Insights

Throughout 2014, the Eurasian macroregion was indirectly affected by the sanction war between Russia and the West. The consequences of this conflict were aggravated by economic problems, most notably by the falling commodity prices. The expansion of the so-called Islamic State of Iraq and Levant (ISIL) project is a potential risk for the Central Asian region as well. Geopolitical turbulence and unfavourable conditions in the global commodity markets negatively affect the region’s investment attractiveness.

As of early 2015, we are noting only a mild increase in the risk profile. The general trend is adverse, however, and the influence of negative factors is bound to keep growing. This is why the countries of the region need to establish individual anti-crisis policies in order to avoid investment outflow and to stabilize the economic situation. The countries’ ability to mitigate adverse economic effects and to benefit from capital flight from unstable regions via its attraction to Central Asia is dependent on the successof this stabilization. A reliance on Eurasian integration structures and unimpeded access to the Russian market may prove a crucial factor for several countries in overcoming negative trends.

Authors: Evgeny Minchenko, Kirill Petrov, Andrey Kazantsev, Nikolay Murashkin

Download pdf file