Import Substitution and Neo-Industrialization

Abstract

The article discusses negative developments that characterize the current situation in the Russian economy the ways for improvement based on new industrialization and import substitution. It states that all of this is possible only with the rejection of the right-wing liberal course and a transfer to an active socially oriented economic policy directed toward innovative growth of the domestic economy.

Keywords:

• import substitution
• new industrialization
• exchange rate
• oil prices
• sanctions
• budget deficit

Notes

1. On the content of this concept, see D.B. Epshtein, “Rynochnyi fundamentalizm i agrarnaia politika v Rossii,” APK: Ekonomika, upravlenie, 2010, no. 7, pp. 47–55.

2. See, for example, S. Gubanov, “Neoindustrializatsiia plius vertikal’naia integratsiia (o formule razvitiia Rossii),” Ekonomist, 2008, no. 9. S.S. Gubanov, Derzhavnyi proryv: neoindustrializatsiia Rossii i vertikal’naia integratsiia (Moscow: Knizhnyi mir, 2012); S. Gubanov, “Neoindustrial’naia perspektiva i nishcheta ee liberal’noi kritiki,” Ekonomist, 2014, no. 4; S.D. Bodrunov, “Rossiiskaia ekonomicheskaia sistema: budushchee vysokotekhnologichnogo material’nogo proizvodstva,” Ekonomicheskoe vozrozhdenie Rossii, 2014, vol. 40, no. 2, pp. 5‒16; S.D. Bodrunov, Reindustrializatsiia kak bazovoe napravlenie modernizatsii rossiiskoi ekonomiki (St. Petersburg: Institut novogo industrial’nogo razvitiia, 2014).

3. Vneshniaia torgovlia SSSR za 1918–1940 gg. (Moscow: Vneshtorgizdat, 1960).

4. To a significant degree, this lag is connected with the unacceptably low profitability of agricultural enterprises. See D.B. Epshtein, “Rentabel’nost’ sel’khozproizvodstva kak faktor sotsial’no-ekonomicheskoi stabil’nosti,” APK: Ekonomika, upravlenie, 1994, no. 10, pp. 66–71. D. Epshtein and E. Shul’tse, “Est’ li dva pika rentabel’nosti sel’khozpredpriiatii?” APK: Ekonomika, upravlenie, 2005, no. 3, pp. 59–65.

5. In many respects, our view of the problems of import substitution corresponds to the viewpoint of S.S. Gubanov: “An import substitution plan should stipulate the establishment of domestic production of technologically advanced microprocessors and microprocessor units, super-computers, aviation and other engines, robotics, operating systems and software, equipment for post-oil energy, automated systems, machines, instruments, and first-class scientific and instructional laboratories” (see Gubanov, “Neoindustrial’naia perspektiva,” p. 18.

6. By regulating the operating rules of the currency market, it is necessary that the heaps of rubles received by exporters from the sale of foreign currency do not go back to this market and “shake it up.”

7. As shown by our estimate, the actual role of agricultural products in exports is approximately 40 percent higher than the figures given in the table, because besides food raw materials, exports include textile raw materials and semimanufactured goods, hides and leather, seeds and planting stock, combined feed, other agricultural raw materials and materials, and also live animals.

8. These data show that the jump in exports in 1929–30 as compared to the 2.8 billion rubles in 1928 was relatively small. It consisted of only 1.23 billion rubles over two years. An individual study should show whether there were other opportunities to obtain this additional amount or whether there was a milder but still acceptable option for extending the commissioning of new enterprises for an additional two to three years.

9. A concept for reforming fundamental science was approved in 2014 by the Congress of Workers in Education, Science, and Culture and is set forth in A.V. Buzgalin, A.S. Mironov, and D.B. Epshtein, “O situatsii v rossiiskoi nauke,” Svobodnaia mysl’, 2015, no. 4, 140–63.

10. Federal law of June 10, 2002, no 86-FZ (edition of December 20, 2015), “O Tsentral’nom banke Rossiiskoi Federatsii (Banke Rossii).”