Alexander Okhrimenko

President of the Ukrainian Analytical Center, Ph.D. in Economics, on the economy and business, latest trends and forecasts.

Unfortunately, the failure of the “chocolate war” with Ukraine taught Russia nothing. Now it started a new round of “military operations”: it put forward claims to execution of cargo which crosses the border of Russia by trucks. Although the management of the customs service of Russia is trying to explain the problems on border with Russia by purely technical reasons, the handwriting reveals methods of conducting “operations”. Without the formal notice the Russian side has once again changed requirements to the cargo execution on border and also introduced obligatory cargo insurance – at consciously artificially high and non-market price. As a result, many trucks, loaded with goods for Russia from Ukraine have stopped on border. To renew documents according to far-fetched requirements of the customs service of Russia, they will need time, which will definitely lead to the failure of deliveries of goods to Russia. Already now many Russian distribution networks have started having problems with the range of goods. They counted on goods from Ukraine as their closest partner, but the authorities of Russia thought in a different way. Crazy ideas of “collection of Russian lands” are more important to them than the economic welfare of their population.

The problem is also aggravated by the fact that, unfortunately, not only inhabitants of Russia suffer from this, but Kazakhstan and other CIS countries also go through this. Because cargo from Ukraine got stuck on border with Russia and can’t get to these countries. Such non-friendly steps on the side of Russia once again show that despite all statements and promises the leadership of Russia doesn’t keep its word. It is trying to find new and new barriers to mutually advantageous trade between Ukraine and Russia.

It is easy to guess that all these Russia’s intrigues on the border are the reaction of Kremlin to Ukraine’s desire to independently make decisions about its destiny and move in the direction of the EU. At present Russia itself is directly linked with the EU countries, as about 57% of all Russia’s export falls within these countries. But at the same time, Russia has got a very negative attitude towards the desire of Ukraine to develop cooperation with the EU. And in hope of disrupting the signing of the Association Agreement of Ukraine with the EU it uses various means, and such illegal ones as well.

The Ukrainian side is trying to quickly solve problems with execution of Ukrainian cargo on border with Russia. To solve this problem both the Ukrainian Ministry of Foreign Affairs, and customs services of Ukraine, and other competent authorities joined the process. Therefore, there is hope that we’ll manage to solve this far-fetched problem on border more or less quickly. But there is no guarantee that Russia won’t make up new barriers for the Ukrainian goods. From the beginning of the trade war between Russia and Ukraine the commodity turnover between the countries has already decreased by 25%. Thus, not only Ukraine suffers, but the Russian side as well. Many Russian companies worked and were focused only on work with Ukraine. Now they are trying to find reserve options, but it is difficult to do it quickly, and often it is connected with new expenses.

Ukraine doesn’t want to tear links with Russia, because current business connections were being acquired over decades, and separate connections remained inherited since the USSR times. And now the policy of the Russia’s leadership, directed at the destruction of these business connections, looks rather weird and illogical. If there is so great a desire to revive a mythical idea of Slavic unity and the Great Slavic Empire with the center in Moscow, then, no problems. But let these geopolitical myths not prevent the economies of Russia and Ukraine from normal functioning. Because Russia obviously forgets that quarrels and creation of artificial barriers on border can push Russia to self-isolation. When even its biggest adherents, like Belarus and Kazakhstan, after observing these non-market actions, will strive not for integration, but for the desire to get rid of such business partner. And then only Russia and Tajikistan, as the country which can hardly live without Russia’s money, will stay in the Customs Union. But this already won’t be a real union any more.


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