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Russias Foreign Trade Cant Grow by Decree

Published: June 4, 2014 (Issue # 1814)


Speaking at the 2014 St. Petersburg Economic Forum, President Vladimir Putin said, Our goal is to ensure that annual growth of non-oil and gas exports exceeds 6 percent. To get there, we will introduce new tools for supporting Russias non-energy companies on global markets.

Now consider this from a different speech: The first of these foreign economic relations issues is the need to increase efficiency and improve the structure and balance of foreign trade. We must achieve a significant increase in manufacturing industry exports. For this we need to expand the production of goods that are in demand in foreign markets and enhance their competitiveness. Those are the words of former Soviet leader Leonid Brezhnev speaking before the 25th Convention of the Communist Party in 1976.

The parallels between the two leaders thoughts and attitudes are clear. In place of a serious plan, both offer more of an incantation summoning up the spirits of increased exports.

At the same time, Brezhnev was more cautious: whereas he accompanied most phrases such as seriously increase, expand and raise with specific percentages, he gave no concrete figures for the needed increase in foreign trade.

However, Putin decisively sets that figure at no less than 6 percent. Of course, if the authorities measure the anticipated growth in rubles, inflation alone will account for at least a 6 percent increase. In fact, Brezhnev can be forgiven for his speech because, unlike Putin, the Soviet leader did not have a multifaceted economy at his command.

It is a banal and hackneyed idea, but one that remains true: the state cannot change the structure of foreign trade by decree or by providing government support to specific sectors. Only competitiveness can effect such a change not decrees. And even if government support does provide a boost, the same old question remains as to who will receive it and according to which criteria.

Unfortunately, the real thrust of Russias course was clearly evident from the content of the St. Petersburg Economic Forum where euphoria over oil and gas and closer cooperation with China reigned. Of course, the extraction of gas, copper and other raw materials is a very high-tech process, but in the end Russia does not export anything high-tech to China it is only selling gas, copper and other raw materials.

And those exports alone will definitely fall short of the 6 percent increase that Putin demands.

Kirill Kharatyan is the deputy chief editor of Vedomosti. This comment first appeared in Vedomosti.





 


ALL ABOUT TOWN

Thursday, Oct. 30


Dental-Expo St. Petersburg 2014 concludes today at Lenexpo. Welcoming specialists from throughout the federation, the forum is an opportunity for dentists to share tricks of the trade and peruse the most recent innovations in technology and equipment, with over 100 companies hocking their wares at the event.



Friday, Oct. 31


Put your grammar and logical thinking to the test in a fun and friendly environment during the British Book Centers Board Game Evening starting at 5 p.m. today. The event is free and all are welcome to attend.



Saturday, Nov. 1


The men and women who dedicate their lives to fitness get their chance to compete for the title of best body in Russia at todays Grand Prix Fitness House PRO, the nations premier bodybuilding competition. Not only will men and women be competing for thousands of dollars in prizes and a trip to represent their nation at Mr. Olympia but sporting goods and nutritional supplements will also be available for sale. Learn more about the culture of the Indian subcontinent during Diwali, the annual festival of lights that will be celebrated in St. Petersburg this weekend at the Culture Palace on Tambovskaya Ul. For 100 rubles ($2.40), festival-goers listen to Indian music, try on traditional Indian outfits and sample dishes highlighting the culinary diversity of the billion-plus people in the South Asian superpower.



Sunday, Nov. 2


Check out the latest video and interactive games at the Gaming Festival at the Mayakovsky Library ending today. Meet with the developers of the popular and learn more about their work, or learn how to play one of their creations with the opportunity to ask the creators themselves about the exact rules.



Monday, Nov. 3


Non-athletes can get feed their need for competition without breaking a sweat at the Rock-Paper-Scissors tournament this evening at the Cube Bar at Lomonosova 1. Referees will judge the validity of each matchup award points to winners while the citys elite fight for the chance to be called the best of the best. Those hoping to play must arrange a team beforehand and pay 200 rubles ($4.80) to enter.



Tuesday, Nov. 4


Attend the premiere of Canadian director Xavier Dolans latest film Mommy at the Avrora theater this evening. The fifth picture from the 25-year-old, it is the story of an unruly teenager but the most alluring (or unappealing) aspect is the way the film was shot: in a 1:1 format that is more reminiscent of Instagram videos than cinematic art. Tickets cost 400 rubles ($9.60) and snacks and drinks will be available.



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