Barys Zhaliba: War in Crimea will cost Customs Union billions of dollars

Russian aggression against Ukraine makes impossible the creation of the Eurasian Union by 2015.

Such an opinion comes from a PhD in Economics, professor Barys Zhaliba as he comments for the charter97.org web-site on the meeting of Putin, Nazarbaev and Lukashenka in Moscow.

“They got together to discuss the recent events on the invasion of Russian troops in the Crimea. This invasion, which is in essence the occupation of the Crimea, will negatively affect Ukraine’s economic relations with the Customs Union countries and the economic relations within the Union. Such an occupation means large expenses on the part of Russia. It is calculated to amount to billions of dollars if direct and indirect costs are included. There is also the West’s suggestion to stop all kinds of trading and economic relations with Russia and the withdrawal of Western assets has already started, which affects modern technologies and investments. In the same way financial and other markets reacted”, - the expert pointed out.

The economist emphasized that this threatens to Belarus by the fact that Russian economy, which is already stagnating, will see indictors dropping, which means a recession.

“This will immediately affect Belarusian economy. The prospect is lowered exports, because Russia’s shrunk market will not buy as much Belarusian products. We are already experiencing problems with overfilled stocks, and the shrinking of the market will make them more acute. For objective reasons Ukrainian market is slowly buying from Belarus now too: there are problems with the exports of MAW lorries, dairy products etc. This is only negative. And of course the cooperation with the Eurasian Union is also in question. I think, it will be created on 1 January 2015, but it will be defective, which means merely on paper”, - Barys Zhaliba believes.

We would remind that on 11 March a meeting of the Eurasian Higher Economic Council took place in Moscow with the participation of the rulers of Belarus, Russia and Kazakhstan. They agreed to sign in May the agreement under which the Eurasian Economic Union will emerge on 1 January 2015.