Sanctions have redirected investment flows in the EAEU

Sanctions have redirected investment flows in the EAEU
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Alexander Knobel, Senior Researcher at the Gaidar Institute’s International Trade Department, in his study on foreign direct investment (FDI) in EAEU countries, expressed an opinion that external significantly affected the flows and distribution of FDI between EAEU member countries. “Nezavisimaya Gazeta” got acquainted with the expert’s research from issue No. 11(193), 2025 of the analytical review "Monitoring of Russia’s Economic Outlook. Trends and Challenges of Socio-Economic Development".

Despite the sanctions imposed on the Russian economy, investment activity and FDI inflows remain in the EAEU. And although the volume of mutual FDI between EAEU countries is about 4% of the total FDI entering EAEU countries, their investment activity creates potential for Eurasian integration.

"About 9% of companies from G7 and EU countries left the Russian market in 2022. Large retailers have actively started to leave Russia. Many manufacturing companies decided to leave the Russian market and began to get rid of their production assets," Alexander Knobel noted. The expert emphasized that since 2022 there is a reorientation of part of FDI to other EAEU member states due to anti-Russian sanctions, where in the same year there was a net inflow of FDI. "States such as Kazakhstan and Armenia recorded FDI growth of more than 95 and 172% respectively by the 2021 level. In Belarus, FDI growth amounted to 29.5%. In Kyrgyzstan, Canada became the largest investor in the same year, with FDI exceeding $157.4 mn," Alexander Knobel pointed out.

Friday, 04.07.2025