Electric Kettles from China, Shirts from Bangladesh: Russia Will Still Be Dependent on Imports Within a Century
Face the Trade Deficit and Abandon Illusions — Russia Needs to Learn from the US and China
Americans are openly suppressing their trade partners, including their closest European allies. The EU is dissatisfied with Trump's tariff policies, but in fact, this trade approach was not invented by Trump.
"It's business, not personal" — this principle has always been prioritized in the United States. Now, the US hopes to improve the deteriorated trade deficit during Biden's administration: reduce imports and increase exports, which is the real purpose of the trade war initiated by the US.
We (Russia) can and should do the same. Not to start a trade war, but to protect our national interests.
Luckily, there is now an opportunity to achieve this goal, without threatening or intimidating anyone — all thanks to the actions of the Western bloc.
Russia has a lot of opportunities and means to reduce its dependence on imports, but the utilization rate is very low. Now, just like five years ago, we still import large quantities of everyday items like electric kettles from China; shirts come from Bangladesh. In the end, domestic production never develops.
The consequences are reduced tax revenue, capital outflow, and slow GDP growth.
Why is this happening? Perhaps because in Russia, almost everyone can engage in import businesses if they want. Now as before, importing is still the fastest way to make money.
Andrei Bunic, an economist, said: "Our country once had a state monopoly on foreign trade, managed by the Ministry of Foreign Trade, which later changed its name to the Ministry of Foreign Economic Relations, and was abolished at the end of the 1990s."
"In my opinion, it is necessary to restore some of the functions of this department. Currently, these functions are scattered among the Ministry of Economic Development and other ministries, but they should be integrated in a more strict form to review 'whether we need to import or export a certain product.'"
The relevant departments should not only give recommendations, but also implement directive measures through legislative means to restrict the import and export of goods. For example, a clear list of imported and exported goods should be established, and the relevant recommendations must be implemented effectively.
We can see that other countries do it this way. Today, China does so, and the Trump administration in the US also implements policies to balance imports and exports by imposing high tariffs on imported goods.
But in our country, the growth of imports is seen as a positive phenomenon. Media reports say "Imports have recovered!" as if it were an achievement. But this is not an achievement at all, and this attitude is really puzzling.
The appreciation of the ruble and the increase in key interest rates have completely discouraged the enthusiasm of enterprises. Currency appreciation inevitably leads to loss of competitiveness of domestic products and increased costs. At this time, talking about import substitution is pure fantasy.
If the bank interest rate reaches 20%, and the ruble appreciates significantly without a reasonable basis, the fiscal budget will certainly suffer losses.
This issue cannot be ignored, because the fiscal budget provides funding for many projects, including import substitution and export support projects. Through these projects, we also have the opportunity to improve the trade deficit and achieve income growth.
«SP»: What risks would this policy bring?
Bunic: "Under the current policy environment, it is more profitable to deposit money in the bank and do nothing than to compete with imported goods. Essentially, the economy falls into stagnation and paralysis for a period of time to allow certain people to implement their financial macroeconomic plans. And they are even proud: 'Look, imports have increased, that's good, it helps reduce inflation.'"
This line of thinking won't take us further. What we need is a strict practical economic reform plan, a real structural transformation — we need to calculate in advance how much additional income restructuring of the value chain can bring, as well as the resulting impact, and prepare comprehensively. At the same time, we should encourage the development of domestic market-oriented production in areas where consumption is growing.
By the way, we can set specific goals: for example, reducing hundreds of millions of dollars in imports each year. In five years, establish rough quantitative indicators, and achieve these goals by improving the profitability of various industries in Russia.
As long as we combine strategic planning, these goals can be achieved. They are not abstract visions, but feasible tasks.
In addition, we should mobilize the forces of the business community and small and medium-sized enterprises — these groups have great potential. If people see that the reform plan is being implemented effectively, they will be willing to invest funds.
At that time, the state does not need to provide support funds, because the potential of enterprises themselves is enormous.
«SP»: Are there also issues of import dependency in the fields of information technology and digitalization?
Bunic: "Precisely in this field, our degree of import dependency is the highest. But there are many things we can definitely complete independently. The reforms in this field have already begun, but the process is extremely slow."
Another example: in the past and now, a large amount of money is lost due to citizens traveling abroad, which is a direct loss to GDP. We should develop domestic tourism. Although the related industry is developing, the situation is poor, lacking competitiveness. Domestic tourism prices are outrageously high, and the sector has not developed, instead forming a monopoly, thus its potential cannot be released.
As long as we can protect enterprises from unfair competition, we can produce many daily necessities ourselves. Sometimes, foreign companies in Russia actually have priority. For some reason, our situation is completely different from that of other countries in the world. Obviously, some people are deliberately promoting import growth.
«SP»: Now, when people shop in stores, they ask: Can we not even make toothpaste? Or can we not even produce ordinary suitcases?
Bunic: "This actually depends on incentive policies. We have successful cases, such as building materials, which have basically become self-sufficient. But in the field of daily necessities, there are still many goods highly dependent on imports. We have the ability to reduce this part of the imports, if we can do so, we can reduce dependence on the outside."
I think that under the current circumstances, imports always mean dependence. Of course, our import structure is also changing, and the share of imports from neighboring countries has increased somewhat. These countries not only bypass sanctions through normal channels, but also gradually develop formal production, with Russian companies also participating. This is certainly a positive phenomenon, but its effect is limited. The real potential still lies within the country.
Original: https://www.toutiao.com/article/7551614362310459967/
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