Different analysts predict that as a WTO member Russia will see its GDP growth rise from 3 percent to 11 percent in the coming years. Source: Legion Media
When Russia was joining the World Trade Organization (WTO) some were pessimistic saying that it would do only harm to national agriculture and woodworking industry. However, Russia’s major companies have not experienced lower income after the country was accepted into the WTO. There is also no increased demand for imported goods on domestic market.
Some analysts used to say that once Russia joins the WTO its market will be showered with cheap goods made abroad. They also said that foreign manufacturers would affect the production output in Russia. Nothing of the kind has happened. A share of foreign goods on the Russian market has not increased significantly. A
lthough the amount of imported dairy and meat products is indeed on the rise, there is no sign of foreign producers ousting national companies from the market, according to Vladimir Obolensky, the head of the Institute of Economics. “Russia’s accession to the WTO could not have had grave consequences for our industries,” Obolensky says. “In 2001-2002 our government reconsidered average tariffs which later reduced by 2 percent within a year. I want to stress that our task as a WTO country is to reduce the tariffs by 3.2 percent within seven years. It means that not a single Russian has experienced this decrease. Our statistics show that imported goods have in no way prevented our manufacturers from winning their niche in the market.”
While preparing to join the WTO the Russian authorities approved a package of measures to support state-run companies. Experts have agreed that there should be a transition period for some goods until 2015. For example, timber and woodworking industries remain stable and do not look vulnerable to ongoing changes, according to Darya Pichugina, analyst with the Investcafe agency. “Each producer focuses on a particular market so no major competition is possible between our producers and other countries simply because transporting timber from Canada to Germany is not profitable,” Pichugina says. “Buying it from Russia is much more profitable. Now that the tariffs have been reduced, sending wood prices in Russia down, we will see a greater number of foreign partners willing to cooperate with us.”
Experts agree that Russia has a great potential for export. With industrial output on the rise export rates will go up, too. Alexander Razuvayev, the head of the analytical department of the Alpari company says: “Russia’s potential is bigger than it may appear since our major partners are European countries experiencing an economic decline. When they overcome this decline they will get more interested in buying goods from Russia. Both agriculture and military-industrial complex have a good potential for export.
Different analysts predict that as a WTO member Russia will see its GDP growth rise from 3 percent to 11 percent in the coming years. Reduced tariffs will send prices for some goods down which will not just play into the hands of foreign manufacturers but also offer a broader choice for ordinary Russians.
First published in the Voice of Russia.
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