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August 19, 2024

Made in Russia?

Made in Russia?
Director General Almaz-Antey Corp. Vladislav Menshikov, President of Russia Vladimir Putin, and Director General of North-West Region Center of Almaz-Antey Corp. Michail Podvyaznikov. Zumlik, Wikimedia Commons

In 2014, immediately after Russia's annexation of Crimea, the Russian government set goals to reduce imports. Specifically, on August 6, 2014, the government introduced a ban on purchasing most food products from Western countries. Ten years later, journalists from the independent newspaper Novaya Gazeta Evropa have analyzed the results of import substitution in several key industries and concluded that no significant success had been achieved, despite various preferences given to Russian producers, including credit, leasing, and priority in government procurement.

The best progress in import substitution has been in agriculture, with Russia becoming a meat exporter and fully self-sufficient in grain, vegetable oil, sugar, and fish. However, the country remains heavily dependent on seed imports.

The situation in other sectors is worse. In particular, plans to produce pharmaceutical substances — raw materials for the production of finished drugs — have failed. According to one expert, Russia's dependence on such raw material supplies may exceed 80 percent.

The aviation and automotive industries are in even worse shape. Only 33 percent of commercial flights are carried out on Russian aircraft, and these account for just 5 percent of passenger turnover, as most Russian planes in use are small. The start of Russia's 2022 invasion of Ukraine severely disrupted the automotive industry, reducing the share of domestically produced cars to 46 percent, a figure that has decreased by 1.7 times, compared to 2021 levels.

To portray import substitution as a success, Russian officials have resorted to various tactics, including rebranding foreign goods as Russian or changing target goals.

Tags: agricultureindustrygovernmentrussia fileeconomy

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