Aug 29, 2021
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Belousov opposed foreign REP

The Russian government has decided to oblige the largest state-owned companies to introduce in their activities the products of the domestic radio-electronic industry (REP). Among the state-owned companies that will be affected by this measure, there are such giants as Aeroflot, Rosseti, Rosselkhozbank, VTB and others. This step of the Cabinet of Ministers can only be welcomed. Moreover, it is acceptable in conditions when the issue of diversifying the products of the military-industrial complex is being resolved.

The course, persistently pursued by First Deputy Prime Minister Andrei Belousov and Deputy Prime Minister Yuri Borisov, continues to gain momentum. The import substitution policy, which began in 2014, has become irreversible. This time, the cabinet decided to help with the protectionist measures of the radio-electronic industry (REP).

Domestic radio electronics went through difficult times after the collapse of the Soviet Union. However, some time ago, towards the end of the 2010s, there was a clear recovery in this industry. If we analyze the indicators of the pre-crisis 2019, the trend was positive (it should be expected in the future – after the economy finally recovers from the effects of the pandemic). The export of radio electronics then amounted to 5.3 billion dollars, imports – more than 32 billion, but the growth rate of exports significantly outstripped the growth in the import of foreign equipment (29% versus 1.8%). The products of the radio-electronic industry are distinguished by high added value, reaching up to 80%. In general, in the gross domestic product, it is almost 2%, the industry employs more than 370 thousand specialists.

The Mishustin-Belousov government has already introduced a number of protectionist measures. For the state order, a minimum percentage of the purchase of Russian-made radio electronics is fixed. When conducting public procurement, the domestic manufacturer has priority.

Now, support measures will be expanded due to the fact that state joint stock companies will be forced to introduce our radio electronics. We are talking about such giants as Aeroflot, Rosneft, VTB, RusHydro and other state-owned companies from the so-called 91-r list. The Cabinet of Ministers is directly involved in their leadership.

So what?

The meaning of the White House’s demands on the largest state-owned companies is clear. On Krasnopresnenskaya embankment they want to stimulate REP enterprises and “stake out” a capacious domestic market for them (its volume as of the end of 2019, according to the Ministry of Economic Development, amounted to 2 trillion 879 billion rubles)… Such an undertaking can only be welcomed.

“Electronic protectionism” is of particular importance in the context of an aggravated international situation. REP products are of great strategic importance. All countries claiming true sovereignty and influence in the world are striving to go over to self-sufficiency in electronics. This is true for the United States of America and China, and our country should be no exception.

In addition, the development of radio electronics merges with another urgent task set by the president back in 2016 – the diversification of the military-industrial complex. The fact is that REP has historically grown out of the defense industry. And until now, half of the proceeds in the market of the radio-electronic industry are provided by the defense industry factories. Solving the problems of re-profiling enterprises of the military-industrial complex for civilian needs is closely interconnected with the growth of electronics production and the increase in its export capabilities.

But the most important thing is that the accelerated development of the radio-electronic industry will create tens or even hundreds of thousands of new high-tech and well-paid jobs. This is especially important for the depressed regions of the country. A striking example is Alatyr, included in the list of monocities in Russia. Measures of state support and protectionism made it possible to load the city plant “Electropribor” with an order, which prevented the collapse of the local economy and the “extinction” of Alatyr.

In the event that the products of the domestic REP can not only fill the domestic market, but also go abroad, we will get a powerful growth driver that will finally solve the problem of getting rid of dependence on raw materials.

Konstantin Dvinsky

Photo: energy1 / Shutterstock

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