The Russian government is clearly battening down the hatches and shifting into a war economy, announcing plans to first meet domestic needs of all essential physical-economic goods, and only then export as possible. At the March 10 Kremlin meeting of President Vladimir Putin and leading government officials, reported prominently on the Kremlin website, a series of domestic economic measures were announced to complement the debt and financial measures announced by Finance Minister Siluanov and Prime Minister Mishustin at that same meeting. [http://en.kremlin.ru/events/president/news/67958]
Putin’s concluding remarks summarized the policy: “We are now discussing ways to overcome the aftermath of the sanctions imposed on Russia and the Russian economy. To reiterate, I have no doubt that these sanctions would have been imposed one way or another, just like they have been in recent years.… There is no doubt that the economy will adapt to these newly arisen circumstances. We will continue our policy of import substitution across all areas and ultimately it will lead us to greater independence and sovereignty … our economic sovereignty will become even stronger.”
Agriculture Minister Dmitry Patrushev first reported that “our country’s food security has been ensured. Russia fully meets its own needs in all the main products,” and will then export as possible, since many countries depend on Russia’s food exports to feed their people. Minister of Industry and Trade Denis Manturov stated that “over 90% of essential goods are produced in Russia,” and that a policy of “accelerated import substitution” of manufactured and industrial goods had been adopted. “We have determined what parts and raw materials are required for manufacturing end products in all industries. Some of them are already produced here and we will increase their output.” Manturov identified that “priority areas for advanced import substitution include: aircraft building, power engineering machine-building, radio electronics and the rehabilitation industry. And, of course, pharmaceutics.”
He added: “To this end the Government has provided additional money for the Industrial Development Fund. We will also use concessional loans for starting mass production of the products that are being developed.” (Achieving this goal will of course require the Russian Central Bank to bend to the government’s stated policy of providing cheap credit for such productive activities, which has not been the Central Bank’s orientation under Elvira Nabiullina.)
