December 8, 2022

  • Former financial official Oleg Fusion told Reuters that sanctions against Russia will harm technological goods.
  • Russia’s tech industry depends on imports, so it will have to recreate those goods locally.
  • Fugen said that the technological development in Russia will decline if the situation does not improve.

Russia could see technology development backtrack for years due to sweeping sanctions over the Ukraine war, said Oleg Fugin, a former finance ministry official and central bank official. Reuters In an interview on Tuesday.

That’s because when it comes to technology, Russia depends on imports, and imports have been hit by sanctions and boycotts. As a result, the country will have to develop its own products to replace those imports.

said Fugin, who was deputy finance minister and deputy governor of the Bank of Russia. He retired from the Moscow Stock Exchange this year.

“The sanctions work” as Russia’s economic growth has been negatively affected, Fuogen told Reuters.

Fusion’s comments contrast with President Vladimir Putin’s positive assessments of the economy. In early September, Putin said the country’s economy was coping with Western sanctions. Almost seven months into the war, Russian economy Still looks flexible. The economy of the energy giant was boosted by energy exports on the back of high prices that were on the rise even before the war.

But imports to Russia have been severely curtailed, which is shown in A Recording a high surplus in the current account $70.1 billion for the second half of 2022. The current account surplus is a key measure of trade and investment flows, and trade is a large component of this measure.

Russia has attempted to counter sanctions by replacing imports with imports from countries that do not impose sanctions or with domestic options. But success has been limited, analysts say Bruegel, A Brussels-based think tank, wrote in late March.

“High-tech products are being developed with input from many countries, but few can function without input from the European Union or the United States,” the analysts wrote. “As a result, no single economy can replicate the capabilities of the global network.”

Bruegel analysts noted that semiconductor chips, aircraft parts and medical goods were among the imports that were hardest hit.

Russia’s state-owned airline Aeroflot has already begun stripping spare parts from operating planes due to supply shortages caused by sanctions. Reuters reported in August.

“If the situation does not change, Russia will experience a gradual decrease in the level of technological development,” Fuogen said.

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