The situation in which Russia ended up due to the sanctions, may lead to the formation of technological equipment production as a part of both domestic industry and international

27 august 2014 | Pravda.Ru

After the introduction by the U.S. government of the restrictions on supply of Russian so-called dual-use technologies, the American corporation Applied Materials refused to supply to “Rusnano” the necessary equipment for the construction of the factory for MRAM-chip memories production. But the refusal of Americans to cooperate has not led to the disruption of factory start-up. The agreement with suppliers from China on supply of necessary equipment was reached.

Yuri Ammosov
Yuri Ammosov
Adviser to Director General of the Analytical Center

“It is necessary to find new suppliers, - said the Adviser to the Director General of the Analytical Center Yuri Ammosov in the interview to Pravda.Ru. - Let's say the situation was somehow resolved, we reached an understanding and all sanctions were lifted. But the same situation could be created again in the future. And we must be ready for this! The situation with the sanctions raises questions regarding to what extent we are depending from someone and where we are vulnerable”.

According to the expert, import substitution can be directive and “when appropriate”. “Directive – is a situation when a non-economic decision is taken: no, we will not buy from these sellers, we should make our own production, etc. The second option – when export substitution is just more profitable. For example, there was such a situation in 1998-1999. Since the middle of 90's a lot of food products were imported because the ruble was artificially inflated. And a lot of food products were imported, and it was profitable. When the crisis came, the ruble has fallen and the imported food became unaffordable. And as a result, this led to very intensive investments in our domestic agricultural industry. And since then, we had much less imports of certain categories of goods. There was a comparative advantage: it became more profitable to produce rather than to import” - said Mr. Ammosov.

Now, according to the expert’s opinion, the situation is mixed. “Sanctions will definitely make import substitution a profitable commercial situation. Another thing is that the import substitution of technological equipment implies that it will be necessary to create certain facilities for their development, production and implementation”, - said Mr. Ammosov, and added that such facilities are not created immediately, usually it takes decades until production moved from one place to another. “The current situation can create conditions where our own processing equipment production is formed not only as our domestic industry, but also as an international. Such situations have occurred in other countries - if they were cornered by sanctions, they created their own. After that the situation changed, and these countries found themselves as leaders in a new stage. And this is possible in Russia as well”, - believes the expert.