Export to Russia Interview with the head of the Ministry of industry and trade Denis Manturov © Russian exporter

At the end of last year, the exports of many sectors of Russian industry has shown a stable and positive trend. After the reorientation of Russia for export, domestic producers feel more confident in the conditions of global competition. The implementation of the national project aimed at doubling the volume of non-oil and non-energy exports by 2024 will help to reveal the export potential of Russian business. Denis Manturov, the head of the Ministry of industry and trade of the Russian Federation, said in which sectors of the economy we have yet to make a breakthrough, which markets need to be mastered and what strategy determines the development of exports in the next few years.

The role of the Ministry of industry and trade in achieving the objectives to increase exports is key. Due to what, in your opinion, can there be radical changes in the Russian economy?

– Today, the main agenda for the economy is access to global markets. Judging by the confident growth rates of exports in many industries, we see that the potential of Russian companies can count on an increase in supplies. However, we have to adjust the mechanisms to stimulate export-oriented business and create a portfolio of support measures.

To achieve these results, the growth rate of industrial products to foreign markets in the first three years should be about 5 % (in the future it will increase).

Given such ambitious plans, we must first make breakthroughs in the innovative sectors of the economy and ensure a shift of basic industries towards high redistribution. In the coming years, the development of many industries will be associated with the implementation of the strategy of national projects. The national project “international cooperation and export” is designed to solve the issues of improving the competitiveness of Russian goods and expanding their presence in the world markets. The financing provided for in it, which is more than 956 billion rubles, regulatory instruments and infrastructure projects by 2024 should ensure an increase in non-resource exports to $250 billion.

 

What tools allow you to count on significant changes?

– Already today, the Ministry of industry and trade of Russia and the Russian export center have developed and put into operation comprehensive support for high-tech products. Attention is paid not only to large but also to medium and small businesses. Including innovative enterprises. Among the important tools to support high-tech industries is the industrial development Fund. FRP supported about 470 projects worth more than 106 billion rubles. Almost every third project from the FRP portfolio plans to sell part of its products abroad. More recently, we have made changes to the FRP standards, and now the Fund can Finance projects aimed at foreign markets at a rate of 1 % (when selling products for export in the amount of at least half of the loan amount per year).

We also managed to significantly reduce the interest rates on loans, especially in comparison with the crisis of 2012-2014. in addition, the Ministry of industry subsidizes the launch of new production sites and R & d. However, the company is currently working on the prioritization and optimization of the existing instruments for support, as well as the creation of new, effective mechanisms that will ensure the established in the decree of the President’s performance. We assume that the key to them will be the support of corporate programs of international competitiveness. Approval of the draft resolution of the Government of the Russian Federation, which will determine the scheme of administration, is in the final stage and from next year will allow ensuring the accelerated growth of exports of industrial products.

The creation of industrial zones in the markets of Africa, Latin America, and South-East Asia is one of the new tools to support the export of domestic products.

 

Tell us more about the new project of the Ministry of industry and trade — the creation of Russian industrial zones abroad.

– Industrial economic zones in the foreign market — a new measure of export support in the industrial sector, through which we plan to stimulate the localization of Russian production chains in the territory of importing countries. For Russia, this is the first such project, the implementation of which will allow resident companies to reach a fundamentally new level of export relations. Among the pilot, regions are Egypt (port said Vostochny), where the first industrial zone for Russian companies will be located.

With the Egyptian authorities, an agreement was reached on the creation of the RPZ, and in 2018 an intergovernmental agreement was signed, which spelled out the parameters of the new facility. Russian companies within this territory will operate under special conditions: in a simplified tax regime, taking into account rental holidays, at preferential tariffs for energy resources. At the first stage of the creation of the industrial zone, it is planned to develop part of the economic area of the Suez canal with an area of 5.2 million square meters.meters. The project is long-term: land on preferential terms will be leased for 50 years.

 

Has the Ministry of industry and trade estimated the expected effect for resident companies from participating in this project?

– The RPP project opens up good prospects for the development of a multifunctional “hub” for the promotion of jointly produced high-tech products to new capacious markets in the Middle East, Africa, Europe, and Latin America. RPZ should become a diversified industrial platform for building chains of cooperation on major Russian projects implemented in Egypt. Speech including the construction of nuclear power plants, “al-Daba”, the supply of products to the automotive industry, shipbuilding, special vehicle, and agricultural machinery. The placement of resident companies, “focused” on the production of a wide range of general industrial equipment, products, and components, will ensure the optimization of financial costs, reduce the costs of resolving issues related to administrative barriers, as well as provide a long-term basis for the localization of Russian companies in these regions.

The planned Russian public investment in the development of the primary infrastructure of the Russian refinery will amount to about $190 million, the possible total volume of private investment for the period of this project is estimated at $7 billion.

 

Another proposal of the Ministry of industry and trade is the creation of export compliance in Russia for its further replication to other States of the Eurasian Economic Union. What is the essence of such an initiative?

– Compliance is the creation of a system of internal control over compliance with legislation. Exporters will be asked to go to Russia, voluntary certification of its products, which is valid in other member states of the EEU. This approach will avoid sanctions risks by supplying goods to the EU. The work of the new project will be based on two vectors. The first is the certification of export products, taking into account all the requirements of both Russian and foreign legislation. The second is to provide exporters with an information repository for documentation that can be promptly provided to the Supervisory authority of the country where the products will be delivered. Such tools to support exporters will significantly reduce the percentage of credit and insurance risks. Moreover, they will enable the export financing of the company as a reliable partner on more favorable terms. Now this project has been launched by the International Congress of Industrialists and entrepreneurs and is being implemented with the support of Rostec and the Ministry of industry and trade.

 

What industries are the most promising in achieving the stated indicators?

– The project “international cooperation and export” is designed to stimulate export opportunities of traditionally strong branches of the Russian industry. These include mechanical engineering, metallurgical, chemical, pharmaceutical, light (including textile) industries, timber industry, production of medical products and consumer goods. But at the same time, the total piggy Bank of export volumes will be filled by the achievements of other, no less important for the country sectors in the economy.

Of course, the sphere of digital technologies, on which the global economy is built today, is a promising area. Digitalization opens up great opportunities for exports, and here our task is to develop market leaders capable of giving the world innovative solutions and digital technologies of a new generation. To achieve these goals, we are creating a network of industrial cooperation, subcontracting and technology transfer within the EAEU. We have as much hope for health. The fact that more than 30 new pharmaceutical plants have been built in Russia over the past ten years suggests that this sector has prospects to become a leader in the global pharmaceutical industry in the coming years. But at the same time, modernization of production, the introduction of progressive approaches require us to make new adjustments to the development strategy of the pharmaceutical and medical industries.

In addition, the Federal project “Export of agriculture” (within the framework of the national project “international cooperation and export”) implemented jointly with the Ministry of agriculture of Russia will allow us to increase the volume of exports to agriculture more than twice (up to $45 billion) by 2024, which will certainly have a significant multiplier effect on most industries.

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