Post-colonial trade between Russia and former Soviet republics: back to big brother?

---

Vol.:(0123456789)
https://doi.org/10.1007/s10644-020-09302-8
1 3
Post‑colonial trade between Russia and former Soviet 
republics: back to big brother?
Arman Mazhikeyev
1
 · T. Huw Edwards
2
 
Received: 29 May 2019 / Accepted: 28 September 2020 
© The Author(s) 2020
Abstract
We examine the developments in trade patterns between the former Soviet repub-
lics in the years following the initial breakup shock. After a huge fall following the 
Soviet breakup of the early 1990s, Commonwealth of Independent States (CIS) trade 
with Russia began improving, and there have been recent formal efforts at Eurasian 
Economic Integration. This might be taken, a priori, as contrary to the hypothesis of 
gradual decline in Head, Mayer and Ries (HMR in J Int Econ 81(1):1–14, 2010)—or 
perhaps as evidence of the power of restored trade agreements, such as the incipient 
Eurasian Economic Union. We decompose the region’s trade into theory-consistent 
‘gravity’ components, in order to analyze dynamic changes in the components since 
the Soviet era. Despite the sharp falls after 1991, trade in 1995 still shows strong 
ties, consistent with high dyadic (country pair) components linked to trade speciali-
zation. By contrast, in the second decade, the ties (dyads) began to weaken signifi-
cantly and calibrated trade costs tend to rise, despite attempts at renewed integration. 
Rather, the sharp improvement in trade volumes was mainly due to the sharp recov-
eries in GDP levels for both Russia and many of the Central Asian Countries, asso-
ciated with improvements in the global economy and economic ties with the World 
(especially with EU and China). We would therefore conclude that the recovery in 
trade between Russia and Central Asia reflects monadic factors (i.e., the regional 
economic recovery) and does not contradict the HMR (2010) hypothesis. Neverthe-
less, further, dynamic analysis shows that there are strong long-run ties within the 
CIS and Russia, which are not declining, and that sticky post-colonial adjustment 
does not appear set to eliminate the current bias of trade between these republics.