Self-sufficient economy and Western sanctions
The Russian economy faces difficulties due to lack of production capacity, etc. Due to the Ukraine crisis, Russia faces Western sanctions, and it is evaluated that its self-sufficient economy has failed.
Russia's self-sufficient economy
For the past several years since the occupation (annexation) of Crimea in 2014, Russia has chosen the route of strengthening the Autorky economy, a strategy of replacing imported goods with its own products as a strategy to respond to sanctions from Western countries. This is interpreted as the intention to survive by fortifying the Russian economy. From 2015 to 2020, the Russian government will spend 2.9 trillion rubles (35 trillion won) per share for this purpose. However, due to the implementation of policies that do not take into account the country's production capacity, external dependence in the consumption and production sectors is still at a high level. Also stand
The pesticides are expected to have a negative impact on the economy by causing production disruptions in the manufacturing and energy sectors of Russia, which are heavily dependent on external factors. Since 2014, Russia's GDP growth rate is below the world average. Per capita real income at the end of 2020 will fall by 9.3% compared to 2013. As a result, Russia's Autarky Economy is evaluated as a de facto failure. According to Germany's Institute for International Security Studies, small economies like Russia can produce complex, high-tech products on their own.
Russia's ambitions are unrealistic from the outset, because they can't. As Russia's economic crisis is likely to worsen, China, the largest economy, is emerging as a variable. However, there is an expectation that China can act as a new product supplier on behalf of the Western society, but the possibility of it being realized due to technological limitations is low. And it is unclear to what extent China will support Russia at the expense of worsening relations with the West. In addition, there is an analysis that China is not enough to meet the demand of Russia as China is lagging behind in the production of high-tech products such as semiconductors.
Incorporated into global supply chain
As the Russian economy is deeply integrated into the global supply chain, the economic crisis is expected to worsen as it becomes difficult to procure key parts, such as the recent cessation of production by major Russian industries due to Western sanctions following the invasion of Ukraine. The Russian automaker (Kamaz) is likely to cut production by up to 40% due to difficulties in importing semiconductors and will lose 15,000 jobs until supply chain problems are resolved. In addition, the background of Russian companies being hit directly
There is an increased dependence on income. In other words, according to the analysis results, about 81% of Russian manufacturers imported parts last year, the highest level since the survey started in 2015. In 2020, imports accounted for 75% of Russia's sales of non-food consumer goods, and communications equipment accounted for 86%. In 2020, imports accounted for 20% of Russia's gross domestic product (GDP), which is larger than China's (16%). In particular, in the case of advanced technology, Russia's dependence on the West has reached its limit. Specifically, the Bank of Russia and
About 90% of businesses use software from the West. Although Russia, a military powerhouse, is re-challenging into the civil aviation market, it relies on imports for half of its parts. According to the Finnish Institute for International Studies, low-tech items that do not require a lot of know-how and investment can be replaced with Russian-made items, but the high-tech is highly dependent on the technology, software, and know-how of the West. This reality shows that Russia's plan to build an autonomous economy in response to Western sanctions has failed.
Expansion of sanctions against Russia
U.S. President Biden is considering releasing additional oil stockpiles to expand the scope of sanctions-related sanctions against Russia and to support Europe, which is in trouble due to a shortage of crude oil. New sanctions include 328 members of the Russian House of Representatives related to the invasion of Ukraine and 48 defense-related companies. It also warns that Russia should be excluded from the G20 and that Russia will take strong action against the use of chemical weapons.
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