The article analyzes foreign trade policy of Russia, compared efficiency of the economies of different countries with GDP. World trend towards sustainable development was considered.
Key words: analysis, foreign trade policy, import, export, GDP, renewable energy, investment, sustainable development
The welfare of the country depends on many components, one of the main is successful economic development. The development of the economy is affected by not only internal factors, but also external. Currently, a significant impact on the Russian economy had 2 factors:
- The accession of Russia in the WTO on the 22 August 2012;
- The crisis, which began in 2014 because of the foreign policy situation and the imposition of sanctions against Russia.
During the first year after Russia's accession to WTO, no foreign trade fee will be reduced. According to different groups of goods provided transitional periods from 1 year to 7 years; for 7 years tariffs on industrial goods will be reduced from an average of 11.1 % to 8.2 %. Duties will be eliminated on the computers and the element base, reduced duties on consumer electronics and electrical engineering, medicine, technology and scientific equipment. Thus, Russia's accession to the WTO does not have the greatest impact yet, and reliable picture of the changes in the Russian economy can be assessed only after 2019.
Let’s analyze Russia's foreign trade policy in recent years.
Fig. 1. The Foreign Trade Policy of Russia 2010–2015
Figure 1 shows that the import and export increased until 2013, in 2014 declined, and in 2015 a sharp reduction in foreign trade can be seen due to the effect of sanctions. The proportion of import and export is maintained throughout the period and is 35 % to 65 % [1].
Consider the commodity structure of imports.
Fig. 2. Commodity structure of Russian imports
The bar chart (Figure 2) shows that a significant portion of imports are machinery, equipment and vehicles. By 2014, the decline in imports can be noticed due to the sanctions imposed on Russia and the crisis. Also, a substantial volume of import are chemical products, rubber, food products and agricultural raw materials.
Fig. 3. Commodity structure of Russian exports
In the commodity structure of exports (Figure 3) products of the fuel and energy complex dominated, the other products don’t have significant impact.
Thus, Russia is still the fuel and energy country, and the majority of the population necessary goods is imported. However, the events of recent years have forced the government to revise the economic policy. In March 2014, Dmitry Medvedev outlined import substitution as a priority for Russia.
In response to the anti-crisis plan 19 industry programs of import substitution were developed in April 2015 for the coming years. The implementation of these programs will allow even the most sensitive sectors, such as machine tools, reduce import dependence [2].
Continuing the analysis of the economic situation in Russia, consider the dynamics of gross domestic product [3].
Fig. 4. Dynamics of Russia's GDP 2010–2015
As can be seen from the histogram (Figure 4), the GDP has the dynamics of growth, even though the overall political situation in the world. The following bar chart (Figure 5) presents each country's share of global GDP, Russia ranks sixth.
Fig. 5. Proportion of countries GDP to the world GDP
For a such country as Russia 3.28 % of global GDP is extremely small, so it is necessary to find out the sectors of production, which should be developed firstly.
The stable development of the economy implies not only the economic growth, which is aimed at increasing the volume and velocity of material and energy flows through the economy, the quantitative growth of population and the increase in stocks of human labor. The development also implies qualitative improvement in the structure, design and composition of physical volumes and flows, «sustainability» is fundamental for the development. Sustainable development — the development of a society that caters to the needs of current generations without compromising the possibilities to leave a legacy to future generations to satisfy their own needs. This concept implies not only the adoption of measures to improve the environmental situation in the world, but also the discovery of the new industries: food processing and the production of renewable energy.
So, in 2015, investments in renewable energy around the world amounted to 286 billion USD. The largest contribution (Figure 8) made the following countries: China, US, Japan, UK, India, Germany, Brazil, South Africa, Mexico and Chile [4].
Fig. 6. Investing countries in renewable energy
As you can see, Russia is not presented in this list, indicating the undervaluation of the industry.
Thus, the worldwide trend towards sustainable development can be seen. It may mean that after a certain time there will be rejection of toxic fuel for the atmosphere, which in turn will lead to a crisis in Russia, which exists due to the export of fuel and energy complex. That is why in 2015 the Russian Minister of Natural Resources and Ecology Sergei Donskoi said that industry expects to attract up to 3.5 trillion rubles of investments in the renewable energy by 2025. This fact says about the active development of this industry also in Russia.
After analyzing the economic situation in Russia and in the world, we can draw the following conclusions:
− the development of Russia's economy at this stage is influenced by Russia's entry into the WTO and the foreign policy crisis;
− sanctions against Russia caused serious damage to its foreign trade turnover, which led to the establishment of import substitution policies;
− global trends cause the development of Russian economy in the direction of sustainable development.
References:
- Kartasheva M. V., Esipova O. V. «The effect of sanctions on Russia's foreign trade turnover» — Collection of scientific papers on the materials of the International scientific-practical conference in 5 parts: «Science, education and society: Trends and Prospects», 2014. pp 150–154.
- Irinina Y. S., Esipova O. V. «GDP of countries. An analysis of the country and its neighboring countries» — Collection of articles of the International scientific-practical conference» Science of XXI Century: Theory, Practice and Prospects, 2014. Pp. 65–68.
- Website: Federal State Statistics Service. Access: http://www.gks.ru/.
- Website: International Centre for Trade and Sustainable Development. Access: http://ru.ictsd.org/
