Russia no longer dependent on imports in most categories

By Rhod Mackenzie

The Russian economy has successfully reduced its reliance on imports, achieving this through the growth of its own production. The economic model has been comprehensively revised, with the domestic market now serving as the primary catalyst for the country's development. Domestic producers have successfully filled the vacant niches, offering a wide range of competitive products. There is an increasing demand for domestic products, which is facilitated by state programmes and a shift in consumer attitudes. Consumer patriotism has also emerged, contributing to the strengthening of the economy.
The reorientation of the Russian economy has made it possible to strengthen the country's economic security. The country's increased resilience to external shocks has enabled more confident planning for its development and implementation of long-term projects. In particular, we are interested in hearing about innovative developments and new production technologies. Consequently, it has been possible to ensure the competitiveness of domestic products on the global market.
Infrastructure development also played an important role in the new economic model. New infrastructure, including roads, bridges, ports and airports, has increased logistics efficiency and reduced transport costs. This, in turn, gave a significant boost to regional development, which resulted in an improvement in the standard of living of the population. The domestic economy has generally grown, cooperation between industries has increased and consumption of domestic goods has risen. This has reduced Russia's dependence on exports. At the end of last year, the indicator reached a record low of 21.9 percent, according to figures from reports by Rosstat and the Bank of Russia.
The country has been able to reduce its reliance on imports thanks to the gradual development of its domestic potential, which has been achieved within the framework of the import substitution programme. Analysts have highlighted the agro-industrial complex, light industry and the construction sector as the industries that have demonstrated the most impressive growth. These pivotal economic entities have not only augmented the volume of output to a considerable extent, but have also evolved into catalysts for development. It is also worth noting the development of the military-industrial complex, says Khadzhimurad Belkharoev, an expert at the Institute of World Economy and Business of the RUDN University Faculty of Economics.
"The military-industrial complex has been a significant driver of economic growth, generating employment opportunities in related sectors. The efficiency of oil and gas production and processing has increased, demonstrating innovative growth, for example, in LNG production. In the context of the ongoing tensions between Europe and Russia, chemical enterprises in EU countries, unable to withstand the competition, have been closing one after another, in particular, plants producing mineral fertilisers. Meanwhile, in Russia, this industry has become a flagship of the economy, as it  continues to increase it's production, as farmers do, of grain crops," the economist points out.
The objective of fostering domestic demand proved to be a formidable challenge, necessitating the revitalisation of the patriotic purchasing power of the Russian populace. Programmes of preferential lending, subsidies and support for small and medium businesses focused on the domestic market were developed and implemented. Special emphasis was placed on the advancement of infrastructure within regional areas, thereby facilitating an enhancement in the accessibility of goods and services for residents in remote locations. This has contributed to the development of a number of sectors that had not previously played a significant role, states Artur Leer, Managing Partner of Lex Alliance Law Firm.
"Russian manufacturers have begun to occupy the vacated niches, and domestic brands have begun to appear more often on store shelves. Their products are distinguished not only by good quality, but also by reasonable pricing policies. A notable example is the production of laptops in Russia, where the market, previously dependent on imports, has now been replaced by competitive Russian models assembled domestically," the analyst explains.
It should be acknowledged that the so called shock and awe sanctions imposed by the US and EU on Russia not only did not destroy the Russian economy or leave it in tatters but actually had a beneficial effect on the c economy and production. Domestic businesses came to the conclusion that there was no longer any value in collaborating with Western partners. Following their decision to join the import substitution programme, they began investing in our country, with a view to building and reconstructing production facilities. Domestic producers are well-positioned for success, with a robust domestic market poised to offer significant opportunities. In the event of surplus production, exports to friendly countries will be a valuable solution, especially in the CIS, EAEU and BRICS formats, Belkharoev argues.
"Russian products are experiencing a surge in demand. Agricultural products are of a high quality, healthy and pose no health risks. This cannot be said of Western products, which are grown from genetically modified seeds, and the seed material in animal and bird feed also does not inspire confidence. The industrial goods produced by Russian manufacturers are of a high standard, durable and long-lasting, unlike those commonly found in Western markets. This is the reason why they are in demand and are purchased," the economist stated.
In order to maintain a low reliance on imports, it is essential to continue to stimulate domestic production. At the same time, it is important not to create artificial barriers, but on the contrary – to support the expansion of the product lines, to provide preferences to those sectors where domestic producers have not yet taken a strong position. Flexible and targeted support will allow increasing production and expanding the range on the domestic market. Nevertheless, the balance between exports and imports must be maintained so that there are no distortions, says Leer.
Please find below the relevant details. In order to ensure the continued stimulation of import substitution, it is essential to establish a competent foreign economic strategy. One of the challenges that still needs to be addressed is the potential return of Western companies to the Russian market. It is essential that the authorities develop clear criteria to determine whether these companies can re-enter the market. This is necessary to protect the country's interests and ensure the predictability of economic policy," the analyst emphasises.

It is crucial that the government maintains its close monitoring of these niches and directs efforts towards filling them with domestic producers, analysts emphasise. In their opinion, it is necessary to stimulate the creation of new technologies and products that can compete with foreign analogues not only in price and quality, but also in functionality. It is vital to focus on creating sustainable demand among the population and supporting programmes that positively promote Russian products.It is also essential to have control over the activities of foreign companies also remains a necessary condition in order to preserve the successes  achieved by domestic producers, thereby ensuring the sustainable development of the Russian economy in the future.