Sofya Donets: Half of Russian imports are technology, or so-called investment imports

19.04.2022       

About half of the value added in imports comes from the countries of the European Union and North America. The second half in most industries is largely based on imports from China. "The geographical concentration of imports to a large extent creates threats to the long-term stability of the Russian economy and dependence on a limited number of suppliers," — note the authors of the report.
The greatest import dependence on the European Union and North America — in machinery and equipment (40%), medicines (34.5%), cars (28.3%), rubber and plastic products (24.6%).
when a country has access to foreign resources and technologies, only increases productivity and is sometimes "even critical"; for export, HSE economists write. Therefore, measures to reduce it and, conversely, increase import substitution do not always meet the objectives of long-term growth in the competitiveness of the national economy, the study says. "Large advanced exporting countries are also major importers of advanced products," — economists explain.
Market reorientation is possible, but the quality of materials and technologies will deteriorate, it may take several months to search for new solutions in other countries, Yuri Simachev, one of the authors of the report, director of the Center for Structural Policy Research at the Higher School of Economics, tells Forbes. « We must not forget about critical imports, when a product has no alternatives. It is difficult to estimate its volumes for the entire economy, it is worth looking at each company separately, — says the economist. If you try to replace some components and materials yourself, it can take years, he continues. In addition, a replaced imported product may rise in price due to complex logistics, the manufacturer himself, after an increase in demand and a decrease in competition, may change the price. There is also a risk that individual companies in friendly countries may refuse to cooperate due to fear of secondary sanctions, Simachev said.
Russian companies will find it difficult to quickly find alternative suppliers due to "high uncertainty in the global economy." and the current tight coronavirus restrictions in China, Anna Fedyunina, another author of the report, Deputy Director of the Center for Structural Policy Research at the Higher School of Economics, points out in a conversation with Forbes. Among the countries that did not join the sanctions are three large economies — Turkey, India and China are leaders in some industries. For example, biotechnology and medicine are developed in Turkey, in India — pharmaceuticals, lists Fedyunin. At the same time, it is still difficult to estimate the level of such goods and their possible volumes for deliveries, the economist emphasizes. Sofia Donets. “It is precisely in investments that a large share of imported components is. But such import dependence speaks of the openness of the economy, common to all countries, especially developed ones. In Russia, its level is average, », — says the expert.
There is also foreign value added in exports (for example, equipment for exploration and drilling), so the imposition of sanctions and the reduction / cancellation of supplies will also affect this sector of the economy, the analyst continues. The fall in technological imports will lead to a reduction in investment activity, says Donets. “In this case, either it will be necessary to recognize the fall in the standard of living, or to replace and thereby impose a greater burden on production. This is long and expensive, which will eventually be reflected in the price of the final product, », — notes the economist. Forbes