Tuesday, 29 April 2014
Western sanctions can bring Russia long-awaited infinite relief
Imports of food for the Russian market have become commonplace. Russia imports more goods than it produces, and this trend lasts for years. The world's largest country with rich agricultural history has become virtually dependent on other states, including even tiny European countries that one can hardly find on the map. What will happen to Russia if trade relations are interrupted due to sanctions? Since the end of the 20th century, especially after joining the WTO, Russia's dependence on foreign food has been growing. Reportedly, Russia's imports account for about 80 percent of all available goods, including those that foreign companies produce in our country and those that use foreign-made ingredients in their production. Russia can not even provide itself with meat and milk. Is it really the case? What would happen if the West used drastic measures against Russia that could result in the deterioration of trade relations with the EU and the U.S.? Assistant Professor for Technology Trade Transactions of the Russian Academy of Foreign Trade at the Ministry for Economic Development, Andrei Golubchik, told Pravda.Ru that Russia will not be able to quickly replace imported products with the ones of its own production. "We have enough grain, but the quality of this grain will not let anyone produce premium pasta from it. Russian sorts of grain are not suitable for that, although we can make very good bread from it. We have been providing ourselves with poultry to the fullest. If we take a look at the near future and assume that the state will slowly but surely turn to beef and dairy cattle, then in a year or two we will be able to provide ourselves with Russian-made beef, pork and dairy products. Today, unfortunately, we can not do without imports, - says Andrei Golubchik. - But, thank God, it is not 1938 or 1951. There is fine beef in Argentina and Australia. If Australia joins the sanctions against Russia, Argentina all not - the Argentinians will be happy to sell. Transportation costs will be higher, and it will affect the price, but there are no options here." Generally, Russia can buy meat from the friendly Brazil, which shares BRICS membership with Russia and remains one of the largest suppliers of meat products to Russia. As for dairy and other animal products, including meat, Russia's closest partner is Belarus, an ally in the Customs Union, which borders on western territories of the Russian Federation and sells products at low prices. "Our companies consume frozen meat in blocks, which they use to make sausage products, - the head of the Moscow Department for Trade and Services, Alexei Nemeryuk said. - They are BRICS countries. They have been our partners for quite some time, and we buy this meat from them. Clearly, we had Polish bacon, which was famous for its quality in the industry, but we found a replacement for the product. Speaking of meat, Russia can use the help of Belarus. As for pork and poultry - Russia does not need to import these." As for fruits and vegetables, then, the official said, it was decided to raise subsidies for greenhouses and accelerate the development of poultry and fish production. If there are not enough products for one particular sector of the food industry, then Russia can focus on the production of CIS countries or far-foreign countries. "The situation with fruit and berries is worse. We receive up to 80 percent of berries and fruits from Europe, but it is possible to replace our partners here too. Serbia is ready to supply Russia with berries. Serbia is a large supplier of raspberry and blueberry," says Alexey Nemeryuk. Meanwhile, Andrei Golubchik said that the Russian market had no segments that would be painfully dependent on foreign supplies. The only unpleasant moment that may occur for the Russian economy because of tougher sanctions is connected with the high-tech industry. Still, Russia may find another way for the procurement of necessary high-tech machinery and equipment, for example, through China, which refused to participate in the ongoing campaign against Russian. "There will be workarounds for it. The Soviet Union continuously lived under the conditions of economic sanctions, however, IBM computers worked in the places, where they had to work at Soviet enterprises. Yes, they were more expensive, they had to be imported via Bulgaria or Romania, but it was possible to import them. I am not at all concerned about the absence of some food products, but I am concerned about high-tech equipment," the expert concludes. To crown it all, it is not profitable for other countries of the world to take the Russian sales market away from their own companies. If it happens, the Europeans will have to find new buyers for their fruits and berries, and Bush's legs will have to find another direction to run to. This is still a big question, who is going to lose more, should trade relations be suspended.