Russian non-hydrocarbon export growth faces challenges

Subject

Russian export trends excluding oil and gas.

Significance

Although oil and gas will remain important to the economy for the foreseeable future, President Vladimir Putin's development plan prioritises modern manufacturing and processing industries. This fits with a government priority of export diversification to improve Russia's global competitiveness and reduce susceptibility to energy price fluctuations.

Impacts

• Keeping import duties low for raw materials and high for finished products is meant to promote inclusion in global production chains.
• Rising exports will boost investment in related sectors such as transport infrastructure, logistics and marketing.
• Small and medium enterprises will benefit from electronic trading platforms and simpler administrative procedures.
• Strict quality controls will be needed to maintain the value of the new 'Made in Russia' brand.