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Economic results 2015: the crisis gives the nod to the substitution

Экономические итоги 2015 года: кризис дает добро на импортозамещение

March according to Rosstat, by the end of 2015, the net financial result of the companies increased by 53.1 per cent and amounted to 8 trillion 421,7 billion rubles, compared with the result of 2014 5 trillion 500,8 billion. Characteristically, the profit of the manufacturing industries and agriculture for last year grew faster than the profits companies mining sector.

The net financial result profit less losses of organizations in the mining sector has improved by 13.3% compared with 2014. At the same time, the success of the manufacturing industry was much more substantial, profit for the year increased by 64.8%. It is curious that in ruble terms the profits in the processing amounted to 2090,2 billion rubles, which is comparable to the profit of the mining sector — 2653,1 billion.

The leader was the return of the fisheries and fish culture. There is profit for the year increased almost 6 times. In second place — transport and communication, where the profit has grown in 2,1 times. A similar result showing operations with real estate, rent and granting of services. Scientific research and development last year turned out to be more profitable is 72.7%. Gains are also being made in the field of construction profit increased by 53.2%. In the electric power industry and housing and communal services — 52.5%, in trade — 51.6%, in agriculture — at 45.3 per cent.

The trend of improving financial results of companies is largely due to the devaluation of the national currency. Over the past two years the ruble has depreciated by half, giving an incentive to the exporters of different products. And, as you can see, things are going much better in the sphere of production with high added value. And here are the results of the extractive companies at the end of the year was less successful. The export of various raw materials, particularly oil and metals, over the past year, is under pressure global prices that have a prolonged fall. In particular, despite the growth of oil export volumes by 10% in 2015, revenues decreased by 41.7% compared with 2014.

Besides the growing export potential of various products before manufacturing industries has opened the prospects of the domestic market, suffering from the increased cost of imports due to exchange rate differences. In the conditions of weakening of the ruble, some goods imported from abroad, do not withstand a competition with cheap Russian counterparts and gradually replaced by local production.

Some progress on import substitution observed in the food industry who were under the pressure of sanctions. Vacant niches of banned imported food products began to fill with the Russian goods.

Over the past year in the country increased the production of cheese. However, due to the lack of milk cheese-makers are faced with significant limitations. As noted by the Director of the Association “Soyuzmoloko” Artem Belov, milk production in 2015 expected at 30.5 million tons, or 8.5 million less than the needs of the market.

Spearhead to replace imports in the defence sector. For example, last year’s “United engine Corporation” has started the production of engines for helicopters series Mi-8/Mi-17, which had previously been produced in Ukraine. Import substitution of Ukrainian products also began in the sphere of car-building and shipbuilding. However, in this case, the main incentive for import substitution has been the lack of alternatives and a security threat.

But ambitious plans for import substitution of components in the manufacture of locomotives, it seems, did not meet expectations. In a recent press release of audit chamber of the Russian Federation it is noted that the share of imported components in the locomotives of the Russian remains extremely high. For some series of locomotives, it reaches 60-80% of the cost. The accounting chamber auditors also noted the low quality of the technology: “Despite the presence of factories inspectors of products from OAO “Russian Railways”, which controls the production process in 2015 for locomotives purchased were issued 467 claims arising from the malfunction of individual parts and components”.

In fact, the issue of quality of the Russian analogues to replace the expensive and prohibited imports — is one of the main targets for criticism of import substitution. Skeptics believe that replace imports in areas such as mechanical engineering or, for example, pharmaceuticals and medical equipment production, — will not work without loss of quality, and therefore it would be reasonable and possibly even dangerous.

In General to speak about any serious successes of import substitution. The process is piecemeal and still has significant limitations. Nevertheless, the process is still running. To such conclusion experts of the Institute for economic policy. Gaidar, who conducted surveys of enterprises on this topic: neither good nor bad, but a replacement is coming — declares the Institute.

It is clear that domestic production of a wide range of goods — topic long-playing. For example, China for the transformation from import-dependent agricultural country in the biggest producing economy in the world has taken decades. However, it is worth noting that the current political and economic situation dictates an urgent need for the deepening of processes of import substitution, in spite of all the contradictions and difficulties. As already mentioned, is forced to move in this direction as an anti-Russia sanctions supported by the West for over a year and a half, and the global crisis.

It is quite logical that the areas which in the current environment, began to grow rapidly, the necessary assistance. After all, macroeconomic effects, provoked the current external environment, is not enough to fully switch to the production of raw materials for the production of high-tech products. The current momentum should be seized as an excellent opportunity for diversification from commodity rents on the rent of technology. This requires a wide Arsenal of measures, from improvement of monetary policy, direct funding of promising projects in the field of treatment. In particular, this well could serve as the anti-crisis plan of the government, which have finally paid some attention to the field of engineering.

It would be foolish to miss the opportunity to address commodity dependence, which are now open to economy. Moreover, the prospects of commodity exports is not optimistic. And it’s not just the global crisis, and geopolitics. According to the latest data of the Ministry of energy of Russia, oil production by 2035 could fall by almost half. About it reports the Agency recently developed in the General scheme of oil industry development for the next 20 years. The document notes that in the coming decades the demand for Russian oil will inevitably decline. So, time to change the structure of the domestic economy from different perspectives is more than appropriate.

Dmitry zavorotnyi, economic analyst EADaily

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