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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

Friday, Aug. 29


Park Pobedy will feature the sights and sounds of the world outside of Russia during the Open Art International Festival today. Taste foreign cuisine, learn how to make tea like the Chinese or relax in a hammock during the free event. Although entrance is free, you must register beforehand if you wish to attend.



Saturday, Aug. 30


Break out the tweed and channel your inner Englishman during the English Hunt Picnic this afternoon organized by the Bagmut stables from Krasny Bor in the Leningrad Oblast. Equestrian stunts, English archery and classic hunting fashion will all be available to visitors hoping to live like the characters in Downton Abbey if only for a day. Tickets for the event cost 7,900 rubles ($219.40).


Bookworms will have their chance to swap out well-read classics for something new for their bookshelves at Knigovorot, a free book exchange that will be held in the Yusupov Garden on Sadovaya Ulitsa today. Come for the chance to get a new book or take the opportunity to discuss the literary merits of your favorite authors with fellow fans.



Sunday, Aug. 31


The Neva Delta International Blues Festival wraps up this afternoon on Vasilevsky Island with a concert featuring not only some of Russias best blues bands but international stars as well. Admission is free for all three days of the festival, which begins on Aug. 29, and the shows starting at 5 p.m. each day.



Monday, Sept. 1


Today marks the beginning of Lermontov-Fest, a fall festival celebrating the life of one of Russias most remarkable poets who, in a fate eerily similar to Pushkins, was killed in a duel at the age of 26. Organized by the Lermontov Library System, the next several months will see art exhibitions, concerts and public lectures focusing on the Lermontovs short yet prolific career. Check the Lermontov Library Systems website for more details.



Tuesday, Sept. 2


Join expats and practice your Russian during the Russian Clubs weekly meetings every Tuesday night at 7:30 p.m. The club is free to participate in although you need to be a registered member of Couchsurfing.



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