Russia's
foreign trade consisted of US$75 billion in exports and imports of US$48.2
billion in 1999 and then to US$105.1 billion in exports and US$44.2 billion
in imports by 2000. Russia sells a broad range of commodities and
manufactures including petroleum and petroleum products, natural gas, wood
and wood products, metals, chemicals, and a wide variety of civilian and
military manufactures. Russia's largest trading partners for exports are
Ukraine, Germany, United States, Belarus, the Netherlands, and China. Russia
imports machinery and equipment, consumer goods, medicines, meat, grain,
sugar, and semi-finished metal products. Russia's largest trading partners
for imports are Germany, Belarus, Ukraine, the United States, Kazakhstan,
and Italy.
Real GDP growth in Russia in 1999
was over 3 percent. The main contributing factors were the devaluation of
the ruble, which made Russian products competitive abroad and at home; high
commodity prices on international markets, particularly oil (while domestic
costs were substantially lower); low inflation and a consensus that
inflation must be controlled; and a relatively healthy fiscal situation
based on strict government budget discipline. The major contributor to
growth was trade performance. Exports rose to US$74.3 billion while imports
slumped by 30 percent to US$41.1 billion. As a result, net exports ballooned
to US$33.2 billion, more than double the previous year's level. Higher oil
prices had a major effect on export performance, particularly in the latter
half of the year. Even though volumes of crude oil exports (to non-CIS
countries) were down by 3 percent, prices jumped 46 percent. Fuels and
energy comprise 42 percent of Russian exports. Other exports performed
better in 1999; fertilizer exports were up 16.7 percent, forestry products
up 38 percent, copper up 17.6 percent, and aluminum up 10 percent.
Trade with other former Soviet
states is overwhelmingly in energy and industrial products, and in many
instances has been, until quite recently, conducted by barter. Russia's trade surpluses
eroded over the course of 1998. Imports to Russia grew
by 10-15 percent per year between 1995 and 1997, as consumers benefited from
an appreciating ruble and rising average wages. At the same time, export
revenues were falling, due in particular to sharply lower prices for oil and
gas (accounting for 43 percent of merchandise exports in 1997). Moreover,
Russia's manufactured exports compete poorly on the world market, especially
since Asian goods have become less expensive following steep currency
devaluations. The devaluation of the ruble and difficulties in completing
transactions through the Russian banking system reduced imports
substantially. Frequent changes in customs regulations also have created
problems for foreign and domestic traders and investors.
Russian oil companies have been
rushing to export their oil (resulting in a windfall of hard currency coming
into the country) to such an extent that Russian officials have set export
quotas in order to maintain an adequate domestic supply of oil. In 2000,
Russian net oil exports totaled 4.3 million metric barrels a day (MMBD). In
addition to export quotas and higher taxes levied on oil exports, a serious
problem facing exporters is the lack of export routes. Russia is maneuvering
to become a major player in the exploration, development, and export of oil
from the Caspian Sea. Transneft is the parastatal responsible for
Russia's extensive oil pipeline system. Many of these pipelines are in a
poor state of repair. The Russian Fuel and Energy Ministry notes that almost
5 percent of crude oil produced in Russia is lost through pipeline leaks.
Transneft lacks the funding to repair or upgrade many of these
malfunctioning pipes. The company's focus has been on building new pipelines
rather than repairing the old. In addition to those in the Caspian Sea
Region, Russia has a number of new oil and gas pipelines planned or already
under construction.
www.nationsencyclopedia.com |