Production Dependence on Imports in the Russian Economy: Regional Projection

Abstract

The key factors in the regional consequences of the sanctions imposed in 2022 on certain sectors of the Russian economy were disruption of supply chains and production ties with foreign companies. The significance of these factors for the regional economy can be assessed through the indicator of production dependence on imports. The study revealed that low production dependence on imports is typical for the least developed regions that are poorly integrated into the international trade system, as well as individual regions specializing in the extraction of fuel and energy minerals, for which imports are more important than mass supplies of equipment and components. A high level of dependence is manifested in three types of regions: those specializing in machinery industry, entities on whose territory international ports are located, as well as territories where large investment projects are being implemented with the participation of foreign capital and/or with significant purchases of foreign equipment. Although in 2020–2021, production dependence on imports had practically no effect on the overall dynamics of the industry. In 2022 this factor again became significant and led to a deterioration in the situation in the group of regions with the maximum level of production dependence on imports. The strengthening of the negative impact of production dependence on imports, among other things, was the result of the policy of import substitution carried out in Russia over the past decade, aimed at directly replacing the supply of imported goods to the Russian market, primarily through the localization of the final stages of production. At the same time, the absence of a stimulating policy to increase competitiveness in export sectors through the development of own technologies and the production of technological equipment can lead to technological blocking and a long-term industrial crisis in regions with medium and low production dependence on imports.

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