CIS: who is faster all through the crisis

the Pandemic of a deadly coronavirus COVID-19, which began in China late last year, in the first half of 2020 is sweeping the planet by leaps and bounds, sparing neither developed countries nor developing ones. According to the observations of IAC Alpari, Russia and other post-Soviet countries were no exception. As of 18 June 2020 Russia was among the five countries with the largest number of people infected with coronavirus. Yes and the former Soviet Union a number of countries, much smaller than Russia, the number of population severely affected by the pandemic, based on figures on the numbers infected with the virus for every 100 thousand people and the death rates from coronavirus in the same 100 thousand.

the incidence and mortality from COVID-19 in the post-Soviet space 18.06.2020 G.

Source: world health organization

the number of people infected with coronavirus in the former Soviet Union, the leaders are Armenia, Belarus, Russia and Moldova later in this sad ranking there, although with a large margin from the previous four countries, Ukraine and Azerbaijan. The highest rates of mortality from COVID-19 – Moldova and Armenia, the mortality rate per 100 thousand people in these countries is measured in double digits, but behind them in third place, albeit with a very large margin, ranked Russia and the fourth for Belarus. These figures, as we see, is not directly proportional to the number of the population, but rather from the timely adoption of measures to combat coronavirus and the General state of the health system in each country.

the World is urgently trying to create a vaccine against COVID-19 and the same rapidly to find a way out of the difficult crisis, the likes of which the scale in the twenty-first century was not. The most effective decisions are taken by governments and Central banks of individual countries. More than 200 Central banks in the world this year switching to lower interest rates and buying assets in the open market to support the real sector of the economy. In the post-monetary policy easing carried out by the Central banks of Ukraine, Russia, Tajikistan and Uzbekistan.

“In Russia was adopted on a large-scale programme of support for the victim of the coronavirus of business and population. Similar programs implemented in several other post-Soviet countries – Georgia, Azerbaijan, Kyrgyzstan, Kazakhstan, Armenia, Uzbekistan,” — said the Deputy head of IAC “Alpari”, candidate of economic Sciences Natalia Milchakova.

However, according to the world Bank, the greatest impact of the pandemic coronavirus impact on those countries whose economies are largely dependent on the tourism industry, especially those who have income from tourism is at least 10% of GDP. Also the countries most dependent on exports, foreign capital inflows and remittances by labor migrants from abroad. Risk can also be attributed to state dependence from external financing.

the Share of income from tourism, remittances and government debt to GDP in post-Soviet countries at the beginning of 2020.

Sources: Stattour, the IMF, the world Bank, information and analytical center “Alpari”

“the Share of tourism revenues in GDP of post-Soviet countries in General is not very big, however, the most dependent countries from the tourism sector is Georgia next, by a wide margin are Armenia and Azerbaijan, and other CIS countries the share of incomes from tourism industry in GDP does not exceed 3-6%. But a much larger number of countries dependent on remittances from labor migrants, and “leaders” of post-Soviet space these indicators are Kyrgyzstan and Tajikistan, as well as, although to a lesser extent, Moldova, Georgia and Ukraine,", — adds Natalia Milchakova.

On the share of debt in GDP, the absolute leader is Ukraine, whose debt accounts for almost 82% of GDP, followed by Kyrgyzstan, Belarus, Armenia and Georgia. From commodity exports, primarily hydrocarbons, the most vulnerable to Russia, Azerbaijan, Kazakhstan and Turkmenistan, and Ukraine exporting agricultural products. Crises and collapses of prices in commodity markets will lead to a decline of production in the mining industry, predicts expert “Alpari”. It is also important to note that Russia, Azerbaijan and Kazakhstan are participating in the agreement oil-producing countries of OPEC++ to reduce oil production, which this year has become a historic record that will negatively affect the dynamics of the GDP of these countries.

By the end of 2020, all countries of the postSoviet space is waiting for the GDP decline, as almost all of them suffered from coronavirus and each of them has its country risks that make their economies vulnerable to the negative effects of the pandemic. At the same time in 2021, the world Bank predicts economic growth of countries in Eastern Europe and Central Asia on average by 3.6%. When recovering oil prices at above $50 per barrel in 2021 leaders in growth rates can become exporters of hydrocarbons, primarily, Russia, Kazakhstan (which is not as much as other EEU countries and the former Soviet Union, suffered from the pandemic), as well as Azerbaijan and Turkmenistan.

Previously carried out economic reforms and monetary easing can help Uzbekistan to quickly overcome the consequences of the crisis. A recovery of the tourism industry in the next year may become a growth driver of Georgia’s economy and to mitigate the severe consequences of the pandemic coronavirus for Armenia. Most difficulties can expect the Moldovan economy, which was hardest-hit by the crisis, and the economy of Ukraine in case it will not be able to serve a huge public debt.

"furthermore, the population of almost all post-Soviet countries in 2020 waiting for a short term spike up in unemployment and falling real incomes, which will start to recover only to the end of the 2021-2022 years, so we can expect that the government will continue measures to stimulate the economy and support of the population for at least two years, — predicts Natalia Milchakova. — In terms of the pandemic will be no winners or losers: everyone will suffer, and the timing and pace of exit from the crisis will depend on the efficiency of policies by governments and Central banks”.