Page 19 - RusRPTAug22

regular parliamentary time a week earlier was, apparently, that the Kremlin forgot.
Newspaper Kommersant, known for its good relationship with Mishustin, reported that the aim of the new appointment was to give Manturov the tools to speed Russia’s path toward import substitution. Manturov has been involved in Russia’s attempts to reduce its dependency on Western-made goods since 2014.
But Manturov’s appointment wasn’t the only high-profile one related to import substitution last week. Media outlet RBK reported Wednesday that Putin’s daughter Katerina Tikhonova will soon start in her first official role by taking charge of coordinating the council for import substitution at the RSPP, an association bringing together Russia’s billionaires. The Bell’s sources at the RSPP could not explain how Tikhonova’s presence will help wean big business off Western imports. But it may well be harder to say “no” to the president’s daughter than a government minister.
An unsuccessful battle with import dependency
Before the annexation of Crimea in 2014 and the start of Russia’s conflict with the West, the Russian government barely gave a thought to reducing imports.
Putin himself has frequently expressed public skepticism about import substitution. “We often say that one of the demands of industrial modernization is import substitution. However, I think import substitution should not be a criterion, otherwise we will have to rely on our own strength in the manner of the [North Korean] Juche idea,” he said in 2007.
All that changed when the annexation of Crimea brought the first Western sanctions and the Kremlin realized that, in the event of a conflict, the West could deny Russian industry access to key technologies. Then-Prime Minister Dmitry Medvedev stated that imports were needed for 90% of machine tool construction, 80% of the civil aviation industry, 70% of heavy engineering, 60% of the oil and gas industry and 50% of energy equipment.
Later that year, Putin identified import substitution as one of Russia’s economic priorities and called for the market to “return to our national producers.” Over the next eight years, import substitution became an article of faith. Special government commissions were created, 20 government programs were approved, and almost 3 trillion rubles ($50 billion) was approved to support Russian companies moving away from Western imports. But no results were ever officially announced and, in 2019, the program end date was pushed back to 2024. And, despite the invasion of Ukraine and new Western sanctions, the government has not announced a new import substitution strategy.
"The end of further illusions"
There is no single metric to measure the success of import substitution. However, studies by the CMASF think tank — linked to Deputy Prime Minister Andrei Belousov — suggest success has been limited. In 2019, CMASF summed up the results from five years of import substitution. It concluded that in 2014 and 2015, in the immediate aftermath of Western sanctions, there was
19 RUSSIA Country Report October 2020 www.intellinews.com