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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

Wednesday, Oct. 1


The St. Petersburg International Innovation Forum 2014 kicks off today at Lenexpo, where it will be presenting the latest and greatest ideas until Oct. 3. Focusing on economic development and the decisions and measures necessary to encourage development in Russias most important industries, the event is a possibility to discuss the innovations currently available in a variety of fields.


Representatives of the Russian and international media industries arrive in St. Petersburg for the first ever International Media Forum being hosted by the city until Oct. 10. With a variety of events on tap, including workshops, lectures and film screenings, the event plans to reemphasize the citys reputation as the countrys culture capital and as an emerging market and location for the visual arts.



Thursday, Oct. 2


The celebration of the bicentennial of the birth of Mikhail Lermontov continues with todays free exhibition in the citys Lermontov Library at 19 Liteiny Prospekt. Titled Under the Rustling Wings, the temporary exhibition will feature the costumes and scenery used in the 1917 production of Lermontovs play The Masquerade, which he wrote in 1835 when he was only 21 years old.



Friday, Oct. 3


Learn more about how to manage and evaluate employee performance during SPIBAs Human Resources Committee meeting this morning on Employee Assessment: Global and Local Trends. Starting at 9:30 a.m., the discussion will touch on such topics as the partnership between HR and business, reliable assessment strategies and more, with Tatiana Andrianova, the head of the SHL Russia and CIS branch in St. Petersburg, as the featured guest. Confirm your participation by Oct. 2 by emailing office@spiba.ru or calling 325 9091.


AmChams Procurement Committee Meeting is at 9 a.m. this morning in their office in the New St. Isaac Office Center on Ulitsa Yakubovicha.



Saturday, Oct. 4


Wine and cheese lovers will get their chance to revel during Scandinavia Country Club and Spas Wine Market Weekend. Going on today and tomorrow, wining diners can listen to live music, take part in culinary classes and, of course, sample a variety of fine wines from around the world. The cost of admission is 400 rubles ($10.30) for adults and 200 rubles ($5.15) for children.



Sunday, Oct. 5


Look for the latest fall fashions at the Autumn Market today in Freedom Anticafe at 7 Kazanskaya Ulitsa. The minimarket plans to offer clothes more flattering than the puffy jackets that are a staple of the citys cold-weather fashion, while offering the same amount of protection from the biting winds blowing off of the Baltic.



Monday, Oct. 6


SKA St. Petersburg, the citys KHL affiliate, welcomes Slovakian club HC Slovan in a match-up tonight at the Ice Palace near the Prospekt Bolshevikov metro station. The puck drops at 7:30 p.m. and tickets can be purchased on the clubs website or in person at either the arenas box office or the clubs merchandise store on Nevsky Prospekt.



Tuesday, Oct. 7


Learn more about Russias energy industry at the St. Petersburg Energy Forum that begins today and runs through Oct. 10. Attracting industry experts and political and business representatives, the forum plans to welcome more than 350 plus companies and their representatives to discuss the future of Russias largest economic sector.



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