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Import substitution 2023: “There is nothing irreplaceable”
Leading economists agree that the sanctions have not caused significant damage to the country's economy. Experience has shown that import substitution is an effective measure; there is nothing irreplaceable.
On the other hand, the country needs to use its own scientific and production potential: if, before this, it was convenient for us to be a “raw material producing country”, we bought abroad what we did not produce, now there is a clear need for our own production of many goods. In many ways, our future lies in mechanical engineering and technology.
During the roundtable “Russian Economy under Sanctions: Midterm and Long-Term Prospects”, V REC participants gave assessments and forecasts of the present and future of the domestic economy.
“The industries most affected by Western sanctions are automobile construction, the production of electrical equipment, building supplies, and chemical industry,” notes Yuri Simachev, director of the Centre for Industrial Policy Studies at Higher School of Economics (HSE), says. “In 2018, about 73% of machine components, 71% of electronics components, and 50% of medicines were purchased abroad. And if over the past time the production of medicines has been increased within the country, in other industries the situation is being “corrected” slower.”
In August-November 2022, HSE conducted a survey of top managers of 1,860 manufacturing enterprises from 71 regions of the country. About 67% of these companies were affected by sanctions. Most often, their negative consequences included rising prices for raw materials and components, difficulties with importing necessary goods, problems with logistics, and a diminution in consumer demand. But at the same time, 28% of companies also noted positive changes: the exit of Western competitors from the markets opened up new niches for business.
The most important long-term consequence of the sanctions includes the technological lag between Russia and Western countries, which arose due to the lengthening of logistics and technical chains. Depending on how the country copes with building up its own technological potential, in the next decade it could range from 1 to 5 years.
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