German automakers are accused of providing Vladimir Putin’s Russia by the backdoor as Central Asia exports boom.
Exports of vehicles and parts to Kyrgyzstan have increased by 5,500% compared to 2019, according to the Institute of International Finance. German auto parts to Kazakhstan and Armenia were up 720pc each, while Georgia and Georgia was up 340pc.
The IIF said that the spike was a sign that Putin used backdoor trade routes in order to gain access to Western goods.
Robin Brooks, the chief economist of the Bank of England, said that the growth rates are extremely high, which seems to be the most logical explanation.
Since the invasion of Ukraine, German automakers like BMW, Volkswagen Porsche and Mercedes have suspended all direct exports to Russia and stopped their business in Russia. Industry leaders have publicly condemned the conflict.
The figures show that the Kremlin has found ways to obtain goods from Europe in a covert and indirect manner.
Russian President Vladimir Putin started a parallel imports program in May 2022. This program allows imports from the West to continue and helps to avoid sanctions.
Liam Peach is a senior emerging markets economist with Capital Economics. He mentioned German cars, French beauty products, and many Western products.
The figures from the Russian central bank show that more than $20bn of goods (£15,7bn) were imported in the first six month of Putin’s import plan.
Mr. Peach says that Russian state media reported 500 Western car models on the parallel imports list.
A spokesperson for the German Association of the Automotive Industry stated that the industry condemned the war in Ukraine.
The statement read: “German suppliers and manufacturers have drastically reduced their Russian business. They ended supply relations and stopped their business.
German car exports to Kyrgyzstan and Kazakhstan have increased by 156 percent compared to the first 10 months of 2021, according to data from the association.According to the association’s data, German car exports to Kyrgyzstan, Kazakhstan, Armenia, and Georgia have decreased by 156% compared to the first 10 months of 2021.
The German Association of the Automotive Industry reports that export bans to Russia have stopped the delivery of 36,000 new cars. In contrast, Germany only sent 1,600 new cars to Central Asia.
A spokesperson suggested that the rise could be due to Russian dealers selling less German cars in Central Asia. This would prompt countries to contact manufacturers directly.
Mr Brooks stated that it is unlikely only German cars are imported to Russia via black market trade routes.
He said, “Germany makes a lot of autos and other parts. But the rest of Europe also participates in this.” It’s not just a German thing.
According to a previous IIF study, exports of US goods to Central Asian countries increased by 11.5% in the first half of 2019 compared with 2019. Exports from Poland increased by 27pc.
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