Ukraine-Russia Row: Economists analyze impact of Ukraine's boycott movement

World
Europe

02:22

Economists are analyzing the impact of the ongoing Ukraine-Russia standoff. Tensions began after Russia seized three Ukrainian navy vessels and arrested twenty four crew members in the Kerch Strait late last month. While potential Ukraine investors seek stability - a local boycott movement is looking to shake things up. CGTN's Stephanie Freid has this report.

Tis the season for holidays and in Ukraine, for crisis with Russia. Crisis that could roll back an economy that's been slowly climbing out of a 2015 17% recession.

GREGORY KUKRYDZA IMF GROUP "At the crisis onset we saw an immediate devaluation of the grivneh going from 27 to 29 against the dollar."

As panicked locals started withdrawing cash, the National Bank of Ukraine issued reassurances that stabilized the 3% drop. But these kinds of images scare off investors. Ukrainians calling for a Russia boycott outside a Russian-owned mall in Kiev.

KATERINA CHEPURA VISICH BOYCOTT MOVEMENT "We demand a ban on Russian businesses operating in Ukraine, a ban on Russian products, on Russian visiting artists."

For the country's boycott movement this critical period presents an opportunity.

STEPHANIE FREID KIEV, UKRAINE "After Russia took over Crimea back in 2014, trade between the two countries dropped in half. But the boycott movement has lost steam throughout the years and in the first quarter of 2017 imports from Russia to Ukraine were up by 46%."

The boycott movement is instrumental in product labeling and lobbying parliament - the latest friction with Russia could be a segway towards legislation.

KATERINA CHEPURA VISICH BOYCOTT MOVEMENT "Increasingly, it's not profitable for supermarkets to carry Russian products because if there are alternatives, that's what Ukrainians are choosing."

Russia and Ukraine's economies are historically intertwined - Ukraine depends on Russia for gas but is increasingly turning to Europe for trade. The boycott movement's aim is to gradually wean Ukraine off of Russian dependence altogether. Stephanie Freid, CGTN, Kiev, Ukraine.