The Domino Effect of the Russian Crisis

Abstract

The Russian crisis brought a collapse of demand and, as expected, a negative impact on imports to Russia. The effect was felt mainly by the former Soviet republics, which experienced declining terms of trade with Russia. At the same time Russian exports to the CIS (Commonwealth of Independent States) fell, as Russian enterprises became less willing to accept barter deals, which had been common practice in trade with the CIS. The Russian crisis, like the Asian crisis, became contagious. This paper examines the effect of the Russian crisis on the ‘near abroad’, as the ex-Soviet republics are called in Russia (we do not consider the Baltic republics of Estonia, Latvia and Lithuania, which did not come into the post-Soviet CIS).