The past year turned out to be difficult for the whole world, and the countries of the Eurasian Economic Union (EAEU) were no exception. Such conclusions can be drawn from an analytical review published by the Eurasian Economic Commission (EEC) in February. According to the document, the union's GDP showed a decline of 3.3 percent from January to September 2020.
However, some sectors of the EAEU economy began to recover last year, for example, agriculture and construction. What caused the growth of certain segments of the EAEU economy during the pandemic and what awaits the Union countries in 2021 - in the analytical review of the Sputnik agency.
The volumes of industrial production of the EAEU in 2020 decreased by almost 3 percent compared to the level of 2019 and amounted to about $ 1 trillion, according to the EEC report. However, this was predictable, the authors of the document note: due to the introduction of restrictions during the coronavirus period, including the closure of borders and the cancellation of flights between countries, sales of fuel and oil products decreased. And for the EAEU member states, the raw materials sector is one of the most important in the field of export.
The pandemic cannot be blamed solely for the EAEU crisis, says Dmitry Ofitserov-Belsky, senior researcher at the Institute of World Economy and International Relations of the Russian Academy of Sciences.
“The impact of the pandemic in each country was different - for example, Belarus abandoned tough restrictions, and Kazakhstan was experiencing serious problems due to the coronavirus, repeatedly introduced a lockdown. In addition, the EAEU had some accompanying problems not related to the pandemic - political difficulties. occurred in Kyrgyzstan, the events in the unrecognized Nagorno-Karabakh Republic hit the Armenian economy. The weakening of the ruble and other national currency also played a role, since the economies of the countries within the union depend on each other, "the expert said.
Agriculture is growing
Meanwhile, while the indicators of the raw materials sector were predictably reduced, in 2020 the manufacturing industry in the EAEU increased by 4 percent. Moreover, the greatest positive dynamics is shown by such types of production as flour, sausages and dairy products - that is, products directly related to agriculture.
According to the EEC report, an increase in the share of agriculture was observed in all EAEU member states. The average growth in agricultural production in the Union amounted to 2.3 percent compared to last year. The agroindustry has strengthened especially noticeably in Belarus (by 4.9 percent) and Kazakhstan (5.6).
According to Dmitry Plekhanov, an analyst at the Institute for Comprehensive Strategic Studies, the improvement in indicators is due to the fact that the coronavirus crisis had the least impact on the agricultural industry.
“Quarantine restrictions mainly affected urban rather than rural areas. In addition, the absence of serious negative weather events also provided support for agricultural production last year. Certain support for the Belarusian economy was provided by the existence of well-established sales channels for export products in the Russian market, due to which exports decreased not as significant as in other EAEU countries, "the expert said.
When will aviation be restored?
The transport sector of the EAEU, due to the reduction in trade, also faced a crisis. In this regard, the structure of servicing world cargo flows has also significantly changed, Sergei Negrei, head of the EEC Department of Transport and Infrastructure, told Sputnik.
"From the statistics, we can conclude that the freight turnover in the union in 2020 decreased by only 1.6 percent. At the same time, the volume of container traffic on the China-Europe-China route was 64 percent higher than in 2019," he said.
The main changes have affected air transportation, the expert specifies. According to Sergei Negrei, the actual stop of air traffic between the countries forced the airlines to carry cargo in the aircraft cabins instead of passengers.
"At the moment, the use of passenger aircraft for the transportation of goods is a market trend. In addition, in 2020, there is a need for urgent delivery of goods in the fight against the pandemic - these are masks, gloves, protective suits, equipment and drugs," he clarifies.
It is difficult to predict the situation in the field of transportation of goods and passengers by air in 2021, since the pre-crisis level in the field of aviation can be reached only in 2-3 years, says Sergei Negrei. In terms of passenger traffic on the railways, this year it could be 50 percent of the 2019 level, subject to mass vaccinations and mitigation of restrictive measures associated with the pandemic. At the moment, according to the EEC, out of 70 railway cross-border passenger routes, only two have been restored: Minsk - Moscow - Minsk and Moscow - Kaliningrad - Moscow.
Integration makes sense
This year, the economies of the EAEU countries are expected to recover growth, says Dmitry Plekhanov. It will take place against the backdrop of the gradual lifting of both internal and external quarantine restrictions.
"The recovery of the world economy will support commodity prices, which will help improve the economic prospects of the countries - exporters of raw materials: Kazakhstan and Russia," the analyst predicts.
In addition to the raw materials sector, improvements will affect the construction sector, which increased by 0.7 percent in 2020. This indicator was provided to the union by Kazakhstan, where the state program for the construction of affordable housing continued to work, and Belarus - construction work continued in the country.
For an even more accelerated economic recovery in the EAEU, a number of additional measures are needed, says Dmitry Ofitserov-Belsky.
