OTHER CIS COUNTRIES’ EXPORTS TO RUSSIA DOWN SHARPLY.

According to preliminary data gathered by the Russia’s Statistical Committee and the Customs Office, Russia’s imports (in dollar terms) from other CIS countries during the first four months of 1997 were some 22 percent below their levels of January-April 1996. While Russia’s exports to the other CIS countries registered a slight increase, its total trade turnover with those countries during this time was down by 12.5 percent. (Russian agencies, June 24) Although these preliminary data may undergo revision, a downward trend in Russia’s CIS trade has been apparent for some time. Indeed, Russian imports from other CIS countries fell by an estimated 35 percent between mid-1995 and mid-1996; and the latest numbers point to the continuation of this trend.

The large declines in the other CIS countries’ exports to Russia suggest that their current-account deficits and indebtedness vis-a-vis Russia are continuing to grow. Since Russia is the largest trading partner of virtually all of the other CIS countries, these growing imbalances suggest that the Russian government may be able to use its ownership in large parastatal exporters (like the Gazprom gas monopoly) to acquire equity positions in the other CIS countries’ energy sectors. (This has happened in Belarus and Kyrgyzstan, for example.) Also, an especially large fall in Russian imports of sugar and dairy products suggests Ukraine has borne a large part of the reductions in exports to Russia — which would help explain why Ukraine remains mired in recession when most of the other CIS economies are reporting growth.

Indeed, according to a report recently issued by the CIS Interstate Statistical Committee, the economic recovery noted in most CIS countries (with the notable exceptions of Russia and Ukraine) seems to have continued through May. Kyrgyzstan reported a 22 percent growth in industrial production during January-May (relative to the same period in 1996), for example, while Georgia reported 14 percent growth. (Russian agencies, June 26) The recovery, combined with the declining importance of trade with Russia, suggests that many CIS economies are growing because they are trading increasingly with non-CIS countries.

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