Russia’s export structureRussia’s economy

Introduction

Export development is traditionally regarded as one of the ways to achieve sustainable economic growth. Recent studies confirm that the long-term development of individual countries is dependent not only upon their export volume and its growth rate, but its qualitative structure as well. Labor productivity of the representative national exporters, as well as differences in the composition of factors used for production of goods exported by a particular country can be regarded as characteristics of the export qualitative structure. The first of these characteristics reflects the productivity of the export sector, while the second one indicates the average effort level to be taken by a country to extend the range of new promising export products, taking into account the existing structure of national export.

Russia

Russia’s economy is highly dependent on the export of commodities with raw oil, petroleum products, and natural gas accounting for 68 percent of total shipments. In 2013, 50 percent of country's federal budget revenue came from mineral extraction taxes and custom duties on oil and natural gas. Other exports include: nickel, palladium, iron, chemicals, cars, military equipment and timber. Main export partners are: Netherlands, Italy, Germany, Ukraine and China.

Russia is one of the lucky countries which has so many natural riches. The structure of export is directly related to raw materials from the basement of the country.

Products exported by Russia (2012)

1- Crude Petroleum $183,748,483,270.08 39%2- Rafined Petroleum $ 70,646,329,764.51 15%3- Petroleum Gas $ 42,892,842,942.02 9.1%4- Coal Briquettes $ 14,074,751,682.84 3.0%5- Semi-Finished Iron $ 6,997,125,669.99 1.5%6- Raw Aluminium $ 6,638,717,814.91 1.4%7- Wheat $ 6,211,815,617.74 1.3%8- Gold $ 5,845,782,823.11 1.2%9- Diamonds $ 4,677,077,906.20 0.99%10- Mixed Mineral or $ 4,255,016,510.81 0.90%Chemical Fertilizers

Export destinations of Russia (2012)

1- Netherlands $43,330,934,605.00 9.2%2- China $38,105,128,780.02 8.1%3- Germany $30,521,090,747,41 6.5%4- Ukraine $26,648,772,147.62 5.7%5- Belarus $25,461,186,681.28 5.4%6- Italy $23,294,956,742.17 5.0%7- Poland $21,029,995,008.19 4.5%8- Japan $17,355,990,724.55 3.7%9- Kazakhstan $15,974,966,860.55 3.4%10- Turkey $15,023,990,552,82 3.2%

Conclusions about “2012”

As we can see, export structure has in the foreground the petroleum products, commodities with crude oil. Main importers are the countries who use in their industry these products, but in the same time, these countries have a developed industry which needs raw materials.

For Russia’s exports from 2012, March and especially December means the highest values.

Exports to Country (Jan/2015)

From 2012 to the beginning of 2015, in top 10 countries who import from Russia, we find many world powers since the beginning of 2012.

Exports of Commodity (Jan/2015)

Exports of Commodity are based on products which use as raw materials the natural resources from underground deposits. Crude Oil, Petroleum Products, Natural Gas, Liquid Fuels, Diesel Fuels, all of these are Russia’s main treasure.

Russia’s export between 2012 and 2015

The export has recorded during this period a relatively constant level between January 2012 and the beginning of January 2014, when it recorded a big fall. The first half of 2014 has created an illusion driven by export growth, but actually was a decrease from the end of 2013 untill 2015.

Top Russian Exports to the World

Russia, the sixth-richest country in the world, shipped US$492.1 billion worth of goods around the globe in 2014, up by 23.9% since 2010.

1. Oil: $288.4 billion (58.6% of total exports)

2. Iron and Steel: $20.2 billion (4.1%)

3. Gems, precious metals, coins: $11.6 billion (2.4%)

4. Machines, engines, pumps: $9 billion (1.8%)

5. Fertilizers: $8.9 billion (1.8%)

6. Wood: $7.6 billion (1.6%)

7. Cereals: $7 billion (1.4%)

8. Aluminium: $6.3 billion (1.3%)

9. Inorganic chemicals: $5.1 billion (1%)

10. Copper: $4.9 billion (1%)

Fastest-Growing Russian Exports 2014

1. Silk: Up 1,588% from 2010 ($135,000)

2. Cork: Up 919.4% ($632000)

3. Footwear: Up 742.6% ($215.3 million)

4. Knit or crochet clothing: Up 674.8% ($141.4 million)

5. Gums, resins: Up 607.5% ($6.8 million)

6. Special woven/tufted fabric: up 516.8% ($8.1 million)

7. Knitted or crocheted fabric: Up 497.8% ($7.5 million)\

8. Live animals: Up 496.7% ($28.3 million)

9. Vegetable/fruit preparations: Up 473.6% ($262.7 million)

10. Umbrellas, walking-sticks: Up 467.7% ($545000)\

11. Feathers, artificial flowers, hair: Up 355.9% ($1.3 million)12. Headgear: Up 343.6% ($12.6 million)13. Oil seed: Up 337.8% ($366.9 million)14. Food waste, animal fodder: Up 290.2% ($1.2 billion)15. Vegetables: Up 286.2% ($244 million)16. Meat: Up 282.9% (%103.3 million)17. Fruits, nuts: Up 281.1% ($82.9 million)18. Musical instruments: Up 273.1% ($817000)19. Clocks and watches: Up 263.4 % ($15.3 million)20. Animal/vegetable fats and oils: Up 225.9% ($2.2 billion)21. Cereal, milk preparations: Up 225.6% ($610.6 million)22. Other animal-origin products: Up 224.4% ($71 million)23. Clothing (not knit or crochet): Up 216.4% ($202.4 million)24. Textile floor coverings: Up 203.7% ($6.2 million)25. Cereals: Up 191% ($7 billion)

Trade

Russia recorded a trade surplus of 17742 USD million in January 2013. Balance of trade in Russia is reported by the Central Bank of Russia. Historically, from 1997 until 2013, Russia’s balance of trade averaged 8338.23 USD million reaching an all-time high of 20647 USD million in December 2011 and a record low of −185 USD million in February 1998. Russia runs regular trade surpluses primarily due to exports of commodities.

 Exports in Russia decreased to 39038 USD million in January 2013 from 48568 USD million in December 2012. Exports in Russia is reported by the Central Bank of Russia. Historically, from 1994 until 2013, russian exports averaged 18668.83 USD million reaching an all-time high of 51338 USD million in December 2011 and a record low of 4087 USD million in January 1994. Russia is the fifth-largest economy in the world and is a leading exporter of oil and natural gas. In Russia, services are the biggest sector of the economy and account for 58% of GDP. Within these services the most important segments are: wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods (17% of total GDP); public administration, health and education (12%); real estate (9%) and transport storage and communications (7%). Industry contributes 40% to total output. Mining (11% of GDP), manufacturing (13%) and construction (4%) are the most important industry segments. Agriculture accounts for the remaining 2%. 

A big problem - Russia, the great bear

Russia has a wealth of natural resources, but its economy is overwhelmingly driven by its main export, oil. According to Wikipedia, “The country has the world’s largest natural gas reserves, the 8th largest oil reserves, and the second largest coal reserves. Russia is the world’s leading natural gas exporter and second largest natural gas producer, while also the largest oil exporter and the largest oil producer.” Because the European Union “as a whole depends on Russia for 25 per cent of its gas supplies,” Russia has been able to restrict its petroleum exports in the past to punish Western-minded countries. In particular, Russia has used its exports as a weapon against the Ukraine throughout the last decade. In 2006, 2009, and again in 2014, Russia cut exports to the Ukraine and caused major economic waves that rippled around the globe. To be fair, Russia likely did have legitimate reasons for cutting off the fuel to the Ukraine (due to gas debts). Nevertheless, with 80% of exports to Europe passing through the Ukraine, all of the European Union was affected.

“Bulgaria was one of the countries hardest hit when Russia cut the gas supply to Europe during that biting winter [of 2009],” according to the Financial Times. They continue, “Electric heaters sold out within hours. People in many parts of the Balkans had to go back to burning wood. In Sofia, the zoo’s shivering African monkeys were kept alive with buckets of herbal tea mixed with lemon and honey.” Nowadays though, countries such as Bulgaria and Poland are working to wean themselves off of Russian oil. “Grupa Azoty, [Poland’s] biggest gas consumer, is seeking to break its dependence on Russia. Grupa Azoty [currently] consumes 15 per cent of Poland’s annual gas imports but has vowed that half the 2.3 bcm will come from non-Russian sources by 2016″ (Financial Times).Russia has a number of other resources beneath its feet besides oil, but has not chosen to focus on those industries. For instance, despite having “more than a fifth of the world’s forests” and being “the largest forest country in the world,” “the considerable potential of Russian forests is underutilized and Russia’s share of the global trade in forest products is less than four percent” (Wikipedia). The lack of diversification in the Russian economy is a primary reason for the effectiveness of the recent sanctions on the country.

Bibliography

• http://www.tradingeconomics.com/russia/exports

• https://atlas.media.mit.edu/en/profile/country/rus/

• http://www.worldsrichestcountries.com/top-russia-exports.html

• http://en.wikipedia.org/wiki/Economy_of_Russia

• https://bullmoosenews.wordpress.com