Page 16 - RusRPTAug22

Already after the start of the war, the CMASF estimated the share of imports from countries that the Russian government declared "unfriendly" after the imposition of sanctions. The share of "hostile imports" in final consumption in pharmaceuticals was 48.2%, in the field of chemicals and products - 44.7%, vehicles - 32.2%.
There are also segments where the figures for the share of imports differ little from those that Dmitry Medvedev called in 2015. Thus, according to the latest data, the share of Russian radio-electronic products in the domestic market is only 12%, equipment for the production of baby food - 3%, automatic transmissions - 0%.
The more substitution, the more imports
It was imports that in recent years have supplied the Russian economy with development resources - both “high-quality” (a number of types of investment equipment, raw materials and materials, consumer durables, modern medicines, software, etc.) and “cheap” (some items clothing, a number of raw materials for the food industry, including the "fast food" industry, etc.), wrote in early July in a report on the "sanctions crisis" the head of the analysis and forecasting of macroeconomic processes of the Central MACF, brother of First Deputy Prime Minister Dmitry Belousov.
Belousov divides the processes of 2010-2021, which the authorities call "import substitution", into three different categories, which he considers qualitatively different. These are “simple import substitution” that does not require significant investment (manifested primarily in agriculture), “import substitution for the sake of security” (defence industry and pharmaceuticals) and, finally, “import substitution for the sake of competitiveness” - a consistent progress from importing finished products to use and subsequent export of products manufactured on the basis of the widespread use of imported components, components and raw materials.
The last, most important category was paradoxically very dependent on imports. “Large-scale imports, which guaranteed “understandability” for consumers of the main properties (including maintainability) and characteristics of Russian products, were the basis for both exports and use in any demanding domestic markets,” Belousov explains. As a result, in the course of import substitution, the technological dependence of the most successful sectors of the Russian economy on the domestic and foreign markets on the import of intermediate products even increased, Belousov concludes.
Of the export-oriented economic sectors, only oil production and oil refining developed more or less independently (with the share of imports in the costs of about 5-10%, which is also quite a lot), the economist writes. Metallurgy, the timber and paper industry and, to an even greater extent, mechanical engineering, pharmaceuticals and healthcare depend on imports of raw materials and components much more strongly. Moderately competitive agriculture, the food industry, the production of building materials, metal products, ships
16 RUSSIA Country Report October 2020 www.intellinews.com