ALEXANDER KNOBEL: “DESPITE THE DECLARED COURSE TOWARDS IMPORT SUBSTITUTION, RUSSIA’S ECONOMY NEEDS IMPORTS”
Alexander Knobel, Head of the International Trade Department at the Gaidar Institute, commented to Forbes on the results of a study on import substitution of consumer goods in Russia between 2010 and 2021.
The study points to some progress in import substitution achieved during that period in the food sector: the share of imports of pork, poultry and vegetables indeed shrank significantly. But as far as non-food products are concerned, the share of those imported from abroad did not decrease, having increased instead. Imports of clothing, footwear, computers and electronics still dominate the scene.
“The Russian economy still needs imports, in spite of the previously declared policy of import substitution. It is still too difficult to do without imports, and generally speaking, such a policy is practically impossible to pursue and extremely inefficient: at present, this country is simply unable to produce the hi-tech equipment necessary for the development of industry and transport infrastructure. In the medium term, it would be worthwhile to try to replace one import with another,” Alexander Knobel believes.
When asked why it was possible to reduce the share of imports of food products, Alexander Knobel explained that these were easier to replace. “This is why investments in that sector are higher. Food production is fraught with fewer business risks: there are always opportunities to sell its output. Hi-tech mechanical engineering is perhaps more profitable, but it is also more risky,” he added.
“The Russian economy still needs imports, in spite of the previously declared policy of import substitution. It is still too difficult to do without imports, and generally speaking, such a policy is practically impossible to pursue and extremely inefficient: at present, this country is simply unable to produce the hi-tech equipment necessary for the development of industry and transport infrastructure. In the medium term, it would be worthwhile to try to replace one import with another,” Alexander Knobel believes.
When asked why it was possible to reduce the share of imports of food products, Alexander Knobel explained that these were easier to replace. “This is why investments in that sector are higher. Food production is fraught with fewer business risks: there are always opportunities to sell its output. Hi-tech mechanical engineering is perhaps more profitable, but it is also more risky,” he added.