Analysts believe Moscow’s vigorous import substitution strategy, which began in 2014, has had mixed effects. Russia sent in bulldozers to crush plump packs of camembert and peaches.
In August 2015, a year after Russia’s annexation of Crimea prompted, targeted Western sanctions against several firms and members of the Russian political and military elite. President Vladimir Putin retaliated by prohibiting large-scale food purchases from countries that had sanctioned Moscow. The over-the-top usage of bulldozers should emphasize that Russia did not need imported goods; the gesture was to show that it no longer relies on Western food, technology, and other items.
However, analysts say that eight years after Moscow initiated an ambitious import substitution program to protect its economy against potential sanctions; the results have been mixed, if not a complete failure. Furthermore, Russia’s inadequate planning might expose the country’s economy in precisely the manner it had sought to avoid; Moscow is facing potentially debilitating sanctions from the US, Europe, and their allies over the invasion of Ukraine. AvtoVAZ, Russia’s largest manufacturer and a Renault subsidiary, had to halt operations due to a lack of parts; vehicles and vehicle components are the country’s most important imports. SvetoCopy, one of Russia’s most popular office paper brands, has ceased production at its mills with Sylvamo, its Memphis-based owner; they blamed supply constraints and then business values five days later.
In their hardships, they are not alone. According to a paper issued by Russia’s central bank in 2021, 65 percent of the country’s businesses rely on imports for their production; highlighting its reliance on global supply networks. According to the Moscow-based Gaidar Institute for Economic Policy surveys, more than 60% of Russian manufacturers say they can’t find domestic counterparts for items they import.
Interested in Forex Trading? Read WiBestBroker’s comprehensive review on Super1Investments.
Quick Look: Bitcoin price currently consolidates around $57,000, down by 5%; Fed maintains high interest… Read More
Quick Look: Microsoft invested $1 billion in OpenAI in 2019 to catch up with Google… Read More
Ethereum in Ascending Channel: Risk at $3,000, Upside to $3,500 Quick Look: Bullish Channel: Ethereum… Read More
PayPal's Strong Start in 2024: $403.9B Payment Volume Surge Quick Look: Significant Volume Increase: PayPal… Read More
XTB announced its entry into the UK's £400 billion ISA market less than a quarter… Read More
In this BTN Centre review, we will embark on a trading journey, where cutting-edge technology… Read More