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Old 09-28-2012, 09:17 PM
 
Location: State of Transition
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Russia produces goods that could be successfully marketed internationally. Why is Russia not exporting much of anything besides natural resources? Manufacturing and exports are the foundation of a stable economy. At one time, the Soviet Union exported cars, even as far as Canada, where they were somewhat popular, due to the absurdly low price. Russia produces foodstuffs that are some of the best in the world, and could compete favorably with similar Western products. In the 90's, there was an enthusiastic revival of folk art traditions, both among Russians, and Indigenous peoples, and village cooperatives, small factories in regional cities, and private cottage industries sprang up to tap this explosion of creativity. In the Russian Far East, these products were popular with Japanese, Koreans, and the few Westerners who were in the area at the time, some of whom began some small-scale export business.

Why isn't Russia capitalizing on this tremendous potential it has to increase production and market its products abroad? Both Russia and the rest of the world would be the richer for it. Aside from the fact that light industry has been a low priority issue (with the exception of Medvedev, who wanted to make it a priority, but falling oil prices thwarted his plans), it seems that there's a lack of vision, or maybe a lack of confidence in the competitiveness and marketability of Russia's goods. Are there no businessmen interested in taking on the challenge of producing high-quality products and backing a marketing campaign, or is it a problem of red tape, export licenses, and so on?

Last edited by Ruth4Truth; 09-28-2012 at 09:33 PM..

 
Old 09-28-2012, 10:03 PM
 
15,545 posts, read 13,536,591 times
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Russia suffers from the lack of quality in their industries, this is due to the protectionism Russia provides for their industries and culture.

Russia does export machinery, like heavy equipment, but most of it is too former Soviet republics and poor nations.

With the WTO entry, I see many of these protectionist policies ending and the industries either improving, or going away. Even now, Russia has managed to produce what, one international compliant passenger aircraft (and that one is new, how many orders)? It is not like they do not know what an aircraft needs to make it viable on the international market, it is that they do not care, the industry gets subsidized.

Russia does have a good candy and honey industry going, also they have a weapons industry, but that is lacking as more nations turn west; again, quality problems.

The problem with Russia is quality control, and from residing there, this is a culture problem more so than a technology and know-how problem. Technology can be overcame, but not in-grained culture traits that put quality in second place (if even that). Russian quality philosophy is best demonstrated by the words of Admiral Sergei Gorshov "better the enemy of good enough".
 
Old 09-28-2012, 10:50 PM
 
15,042 posts, read 13,634,316 times
Reputation: 6921
Quote:
Originally Posted by boxus View Post
With the WTO entry, I see many of these protectionist policies ending and the industries either improving, or going away.
Speaking of which -

"MOSCOW, Sept 27 (Reuters) - Russia is likely to contest European Union energy rules at the World Trade Organization in what would be its first trade dispute since it joined the global body, a government source said on Thursday.
The rules, known as the Third Energy Package, restrict gas company Gazprom's control over its European pipeline assets and have been an irritant in relations between Russia and the EU, which accounts for half of Russia's trade..."

UPDATE 1-Russia likely to contest EU energy rules at WTO-source | Reuters

and in other news -

"Russia has thrown out the United States Agency for International Development, the U.S. State Department said, claiming that the aid agency has undermined Russia's sovereignty."

Russia boots out USAID - CNN

and if this is not good enough, then read on...

"(Reuters) - A senior Russian official said on Thursday he would skip a meeting of European lawmakers next week because of "Russophobic" attitudes among them, in a fresh sign of tensions between Moscow and Europe."

Russian official snubs meeting of Russophobic Europe lawmakers | Reuters


and the last but not least -

"Leading Russian non-government organizations said Thursday they would defy a new Kremlin law requiring those who receive funding from abroad to register as "foreign agents."
The heads of nine prominent NGOs have issued a joint statement saying they would ignore the law, which was approved by the Kremlin-controlled parliament over the summer in a bid to undermine the groups' credibility.
"We survived the Soviet power, and we'll survive this," Lyudmila Alexeyeva, a Soviet-era dissident who heads the Moscow Helsinki Group, said Thursday."

Russian NGOs Defy Law Naming Them 'Foreign Agents' - ABC News



Last edited by erasure; 09-28-2012 at 11:05 PM..
 
Old 09-29-2012, 01:22 PM
 
Location: State of Transition
78,735 posts, read 70,579,935 times
Reputation: 76713
Quote:
Originally Posted by boxus View Post
Russia suffers from the lack of quality in their industries, this is due to the protectionism Russia provides for their industries and culture.

Russia does export machinery, like heavy equipment, but most of it is too former Soviet republics and poor nations.

With the WTO entry, I see many of these protectionist policies ending and the industries either improving, or going away. Even now, Russia has managed to produce what, one international compliant passenger aircraft (and that one is new, how many orders)? It is not like they do not know what an aircraft needs to make it viable on the international market, it is that they do not care, the industry gets subsidized.

Russia does have a good candy and honey industry going, also they have a weapons industry, but that is lacking as more nations turn west; again, quality problems.

The problem with Russia is quality control, and from residing there, this is a culture problem more so than a technology and know-how problem. Technology can be overcame, but not in-grained culture traits that put quality in second place (if even that). Russian quality philosophy is best demonstrated by the words of Admiral Sergei Gorshov "better the enemy of good enough".
Thanks for a great, thoughtful post. I was aware that quality control was an issue, but hadn't thought of it as a cultural one.

Ages ago I brought several bottles of their soft drinks ("limonad") to friends in Sweden and the US, and people couldn't get enough of the stuff, it was so good! What was unique about it at the time was that it used all natural flavoring, no artificial color, and the carbonation was what they call "soft" in Russia, which meant that it was more easily transportable, more tolerant of shaking and jostling. This is a product that would have done very well on the international market. The West only recently has begun to approximate that product, with naturally-flavored soft drinks available in health-food stores, and these are gaining popularity. Russia could have been way ahead of the trend if anyone had had the foresight, and also an awareness of, and ability to do something about the quality control issue. But after 1990, all but one of the factories was closed.

IMO, Russia would also be doing the world a favor by exporting its ice cream. Nobody makes better ice cream than Russia; it's made of cream, rather than skim milk, whey solids and guar gum (!!), plus it's not aerated to save money, it's solid cream. But instead of having their little "stakanchiki" of vanilla and chocolate available in our stores (or pint-sized containers of the same), we're sending them Ben and Jerry's ice cream.

At one point someone in Irkutsk had the bright idea of bottling water from Baikal, with plans to export it for the bottled spring water market. I still have one of the prototype bottles, labeled "Baikal Water". That was a good idea that mysteriously went nowhere.

These suggestions (along with the folk craft idea) may seem like small change, but this is what creates jobs for the folks back home, and could do a lot to help Russia's image abroad. People who have never heard of Baikal would learn about this jewel of a World Heritage Site. Who knew that Russia had World Heritage Sites? This could, in turn, foster tourism.

Very good point about joining the WTO and ending protectionism, btw. We'll see how things pan out. Somehow, I'm not holding my breath. I think one thing that would need to happen to foster exports is a streamlining of red tape. The process for getting permission for exporting anything art-related (including crafts), for example, discourages producers from accessing the international market.
 
Old 09-29-2012, 01:42 PM
 
15,042 posts, read 13,634,316 times
Reputation: 6921
Quote:
Originally Posted by Ruth4Truth View Post

IMO, Russia would also be doing the world a favor by exporting its ice cream. Nobody makes better ice cream than Russia; it's made of cream, rather than skim milk, whey solids and guar gum (!!), plus it's not aerated to save money, it's solid cream. But instead of having their little "stakanchiki" of vanilla and chocolate available in our stores (or pint-sized containers of the same), we're sending them Ben and Jerry's ice cream.
Ruth, what you need to understand is that the 90ies created mafia; a group of people, who basically operate like a broker between Western companies and Russian consumer; Western need of natural resources and Russian supply of it.
This group was not really interested in development of Russian production, creation of competitive environment and the rest ( since that would put their own control at risk.)
Their main interest was ( and still is) how much money they can gain through this constant brokerage. That's the game.
 
Old 09-29-2012, 01:59 PM
 
Location: State of Transition
78,735 posts, read 70,579,935 times
Reputation: 76713
Quote:
Originally Posted by erasure View Post
Their main interest was ( and still is) how much money they can gain through this constant brokerage. That's the game.
So, it's all about them, best interests of the country be damned. Who cares if there's mass unemployment? The oil and gas money will wall-paper over all the misery, and maintain the facade of a functioning country.
 
Old 09-30-2012, 02:42 AM
 
Location: rain city
2,958 posts, read 11,356,527 times
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^^^^
yes.
 
Old 09-30-2012, 11:42 AM
 
15,042 posts, read 13,634,316 times
Reputation: 6921
Quote:
Originally Posted by Ruth4Truth View Post
So, it's all about them, best interests of the country be damned. Who cares if there's mass unemployment? The oil and gas money will wall-paper over all the misery, and maintain the facade of a functioning country.
Well basically yes, because what they are betting on, is that the natural resources ( that West doesn't have in abundance) will matter more after all, and with enough of money stacked in Western banks ( after all Russia is an inseparable part of the Western banking system now) they'll come as the winners at the end, particularly if to take in consideration the complexity of situation with China, Iran and all - the card that they are willing to play as well.
But for now, if I can summarize it briefly - Russia's ruling class passes the interest of their own pocket for the national interests. They pretend that it's one and the same thing.
The way I see it - it's all not going to end well.
 
Old 09-30-2012, 04:53 PM
 
Location: State of Transition
78,735 posts, read 70,579,935 times
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It's sad, because I see so much potential in Russia, but no one in a position to do anything about it is interested in helping the country reach that potential.
 
Old 09-30-2012, 06:52 PM
 
2,924 posts, read 2,359,421 times
Reputation: 618
Quote:
Originally Posted by Ruth4Truth View Post
Russia produces goods that could be successfully marketed internationally. Why is Russia not exporting much of anything besides natural resources? Manufacturing and exports are the foundation of a stable economy. At one time, the Soviet Union exported cars, even as far as Canada, where they were somewhat popular, due to the absurdly low price. Russia produces foodstuffs that are some of the best in the world, and could compete favorably with similar Western products. In the 90's, there was an enthusiastic revival of folk art traditions, both among Russians, and Indigenous peoples, and village cooperatives, small factories in regional cities, and private cottage industries sprang up to tap this explosion of creativity. In the Russian Far East, these products were popular with Japanese, Koreans, and the few Westerners who were in the area at the time, some of whom began some small-scale export business.

Why isn't Russia capitalizing on this tremendous potential it has to increase production and market its products abroad? Both Russia and the rest of the world would be the richer for it. Aside from the fact that light industry has been a low priority issue (with the exception of Medvedev, who wanted to make it a priority, but falling oil prices thwarted his plans), it seems that there's a lack of vision, or maybe a lack of confidence in the competitiveness and marketability of Russia's goods. Are there no businessmen interested in taking on the challenge of producing high-quality products and backing a marketing campaign, or is it a problem of red tape, export licenses, and so on?
What goods specifically?
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