The crisis caused by the COVID-19 epidemic destroyed millions of jobs, broke many traditional supply chains, put some sectors of the economy on the brink of destruction, and gave another unexpected impetus to others. The countries of Eurasia, like all emergency markets, are among the main victims of the crisis. What future the economies of Eurasia await? Do some local industries have a chance to make a breakthrough, or do they only need to think about cutting costs and reducing losses? Invited experts discussed this on StrategEast.Live panel.
According to Torbjörn Becker, Director of the Stockholm Institute of Transition Economics, Russia’s hydro-carbon economy remains an important influence factor for the post-Soviet countries. And the current crisis is the right time for the countries of Eurasia to review the structure of their own economies. Mr. Becker praised the great progress made by the IT industry in Belarus and Ukraine, but noted that this is not enough to create the number of jobs needed for these countries.
Artur Radziwill, Director for Country Economics and Policy, EBRD said that according to the latest forecasts of the Bank, the GDP will drop by 6% due to the pandemic. But the crisis demonstrated the most obvious latent growth points – first of all, the digital economy. Starting with such a simple thing as just having a device at home and being able to connect to the network. According to Mr. Radzivil, the response of the EBRD, as the largest equity investor in Eurasia, to the crisis was focusing on digital.
Margot Ellis, Senior Deputy Assistant Administrator, USAID talked about labor market prospects. “Speaking about the prospects of the labor market, it is worth recalling the state in which this labor market met the current crisis. In Eurasia, 40 % of GDP has already been produced by “informal” jobs with informal salary or short-term employment. And all this with unemployment, which in some countries reached sizeable amounts. After the pandemic began, hundreds of thousands of citizens who worked abroad were returned to these countries. And all of them suddenly became a burden for the state. And such countries weakened by the crisis are becoming a target for economic expansion to the strategic competitor of America – China.”
“In response to this challenge, the Department of State has already allocated $1 billion in aid for the fight against pandemic, but first of all, for “second-order effects”: social consequences for the residents of Eurasia, economic consequences for small and medium-sized businesses.”
At the initiative of the panel’s moderator, Anatoly Motkin, President of StrategEast, participants developed the topic of Chinese influence in the region.
In particular, Mr. Becker noted that given the long strategy of China in the region, it is necessary to be as transparent as possible when selling state assets to the authorities of Eurasian countries.
