Deputy General Director of UVZ for civilian products Kiril Tomashchuk. IMAGE: Press Service UralVagonZavod
On December 19th, Russian President Vladimir Putin in his annual press briefing to journalists from Russia and abroad gave remarks on various topics of interests.
One of the first questions he was asked came from Russian journalist Matvey Shestakov, from TVC.Ru:
“It is often said now that the real capacity of our economy was created in Soviet times, factories remained, and so on. What can you answer to such critics? What has been done in the post-Soviet era?”
The Russian President’s response:
“Criticism always makes you think about the topic that critics are raising. We cannot but take advantage of what we inherited from the 1000-year-old Russian state, this includes what was done during the Soviet period. We must be grateful to our ancestors who created such a huge and mighty power. But, firstly, 75% of production capacities in the processing industry have been created after the year 2000.”
The processing industry that Putin speaks about means primarily the processing of raw materials such as hydrocarbons, agricultural products, forestry, metallurgy. However, when it comes to heavy engineering, the creation of machine tools, as well as high-tech production for the defense, space and nuclear industry – they were mostly inherited from the Soviet Union.
Putin then said that much progress has been made when it comes to infrastructure:
“Three airports, 45 highways, we have doubled the number of highways. A very striking example is agriculture. Older people remember that the USSR has always been a buyer of grain. Now Russia is the largest supplier of wheat to the world market. The growth in agricultural production stands at 46%. Our export has grown many times. We are at $24 billion agricultural products sold. And this is not only wheat. In total, all ports of the USSR handled 600 million tons per year. Now you know how much? One Billion, one hundred and four million tons.”
The growth of the Russian agricultural industry is to a very large degree a result of conditions created by Western sanctions. Mostly all products are exported, and the impact of agricultural production growth is quite small on the domestic market. The general Russian population has likely not even felt nor sense this growth.
“Over 600 new deposits [of mineral resources]. Thus, in almost every region.”
Russia is still to a large extent a raw material producing country. A significant part of the budget comes through the supply of energy resources, as well as low-level processing products (agricultural products, metals, wood, as well as other raw materials).
“I’m not referring to such modern areas as nuclear energy. We launched 8 blocks, by the way. For all Soviet time, it seems, 16 were launched. We, it turns out, produce the greenest energy – and this is where the question of preserving the environment comes.”
This is a strange comparison, since in about 30 years, Russia has built 8 new nuclear blocks. This was achieved at the technological level of the 21th century’s first quarter. At the same time, in approximately 40 years of the USSR’s peaceful nuclear program, at the technological level of the second half of the 20th century, two times more nuclear blocks were built.
“New industries in the energy sector, such as liquefied gas, have been created. A significant leap forward occurred in hydropower. Those who believe that we live on capacities inherited from old times are mistaken.”
The praise of Russia’s economic progress was strange, since all of the things Putin listed are actually less impressive than what the Soviet Union achieved in a barely longer period of time, at a level of technology much less advanced than the current one.
It is no secret that a large portion of the capacity of the Soviet Union still remains and is, without a doubt, if not at the core of the current Russian economy, then at least the foundation of it.
To top it all off, currently Russia is attempting to spread its influence in regions such as Africa, with which the Soviet Union had relations before its dissolution, thus it is even taking advantage of the footholds created by it, as well.
MORE ON THE TOPIC:
If you assume that the digital world is the new area for economic growth then yes, Russia is struggling. You really can’t compare this economy with the old, low tech machine economy of the Soviet period. Compare the US’s fly-over states with it’s two coasts.
It will be interesting to see if and what works to jump start a Russian high-tech economy instead of being a resource extraction economy. Not sure if they have the population (market), universities, and ability to attract top talent and the US is adamant about keeping them out of the existing OECD markets and their own high-tech monopolies. One can’t blame Putin on this issue.
Anther thing is that almost every kind of industry was been upgraded for few levels up into actual international standards in comparison with obsolete soviet-era mass production of obsolete things there is high grade production of high-tech/soviet era durable thigs
It seems like this writer has a certain antipathy towards Putin. Most uncharacteristic of SouthFront.
I dont know much about Russian economy but it is plain that he has effected a modernization of the army and such requires massive production and advancement of key industries and science research like steel, special metals, chips, electronics, etc. Russia only has limited capital and is also under sanctions. It can only focus on select industries foremost of which is agriculture. A hungry Russian will lead to a color revolution. An industry is much easier to develop if it is based on raw materials since there is no further need for additional systemic infrastructure, research, advertisement. In the case of Russia, it is rich in resources so it has to make do with what it has in the meantime while trying to transition to processing and manufacturing products. Finally, we go back to sanctions and uncertainty which discourages trading with Russia. Less demand translates to less incentive to upgrade production.