"Russian goods continue to be bought in the markets of unfriendly countries"
Russian goods continue to be in demand in unfriendly countries, despite political restrictions. Veronika Nikishina, head of the Russian Export Center (REC), told Izvestia about this in an interview at the WEF. Supplies to European countries now account for about 8% of Russian exports, but in general they are reoriented in other directions. At the same time, a strong ruble remains a problem for exporters, as the exchange rate of 90-95 rubles per dollar is considered optimal for them. What role does small business play in the foreign trade of the Russian Federation and how to increase confidence in the brand "Made in Russia" — in an exclusive interview with Izvestia.
"Exporters are the heroes of our time"
— Is export becoming a key direction for the economy today?
— Exports have always been one of the key drivers of the economy. At the same time, we have now moved away from the "oil needle" — the share of non-primary exports has returned to the level of 2021 and reached about 40%. These are primarily metallurgy, chemistry, agro-industrial and timber complexes. Mechanical engineering consistently accounts for about 20% of Russian exports, although the figure may vary slightly from year to year. Russia supplies machine tools, industrial equipment, railway machinery, power plants and other highly processed products to foreign markets.
The demand for energy equipment is now growing further due to the development of artificial intelligence. Countries that implement such technologies require more and more capacity for energy generation, so Russian solutions in this area remain in demand.
— How has Russia's presence in the European and other traditional markets changed after 2022 and has it been possible to compensate for the reduction in supplies?
— By abandoning Russian products, European countries have made their economies dependent on monopoly supplies from other countries, which can now abuse prices, among other things. Until 2022, Europe accounted for about 44% of all Russian exports, but now this share has decreased to 8%.
At the same time, we did not lose the total volume of supplies, but refocused on other areas. This has changed trade chains and influenced the geopolitical processes in global trade, but at the same time opened up new opportunities. Exporters are the heroes of our time, because in the face of severe sanctions they find vacant niches and gain a foothold in new markets.
Russian goods continue to be bought in the markets of unfriendly countries. At the same time, both direct supplies and supplies through third countries are growing. The term "deflagization" is used for this phenomenon: Russian goods continue to be imported, but without specifying the country of origin. This shows that the economic demand for them remains regardless of the political situation.
"For exporters, a strong ruble is a huge disadvantage"
— How has the geopolitical situation affected the cost and delivery time of Russian goods, and what alternative routes are currently being developed?
— Due to the situation in the Strait of Hormuz, the cost of shipping increased by 20-35%. At the same time, the supply of Russian and other products along these logistics corridors has not stopped — companies are switching to longer routes, using other ports and multimodal schemes with transshipment to road transport. Nevertheless, the average delivery time has increased by 10-15 days.
At the same time, there is a positive effect in this situation — the development of alternative routes is accelerating. One of them is the Northern Sea Route. Its development is already beneficial not only to Russia, but also to other partner countries.
The North—South international transport corridor remains promising. Its development began even before the military escalation between the United States and Iran. The route passes through Iran and provides access to the Indian market and beyond. The corridor is currently actively operating, but its bottleneck is the unfinished Rasht—Astara railway section, which is due to be completed in 2028. Currently, this site is used primarily for supplies to the domestic market of Iran.
— How does a possible change in Armenia's foreign policy affect trade relations with Russia and its participation in the EAEU?
— Now we are waiting for specific decisions from Armenia. Of course, it is impossible to be a member of two integration associations such as the EAEU and the European Union.
At the same time, Armenia's participation in the Eurasian Economic Union has given it access to a huge market in Russia and other countries. When Armenia joined the EAEU, on the contrary, we stimulated the expansion of the range of Armenian goods on the Russian market in order to support their sales. It would be a pity if Armenian businesses stopped selling their products on the Russian market, but Russian consumers would not notice the problem of replacing these products in general.
— How does a strong ruble affect Russian exporters and what would be the best exchange rate for them?
— A strong ruble is definitely a huge disadvantage for exporters. Due to an unreasonably strong exchange rate, we are losing our competitive advantages in many products. When the ruble weakens to 90-95 per dollar, Russian products become more competitively priced. We consider the range of 90-95 rubles per dollar to be optimal for the balance of exports and imports, although a rate above 100 is even better for exporters.
"We need to move away from the stereotype that Russian is worse than imported"
— At one time, the "Made in China" program was launched in China, which later became the "Made for China" program. Do we also plan to focus more on developing domestic demand and the "Made in Russia" brand?
— One of our main priorities now is to ensure domestic demand and develop production facilities that reduce dependence on imports for critical goods. At the same time, it is necessary to build trust in Russian products and the image of "Made in Russia" as a sign of high quality. We need to move away from the stereotype of the 1990s that Russian is worse than imported.
If we talk about the consumer sector, "Made in Russia" is a wide range of high—quality finished products, including environmentally friendly and safe ones. At the same time, Russian exports today are no longer just raw materials and products from basic industries. We are strong in high-tech areas such as artificial intelligence, civilian unmanned technologies, medical equipment and other innovative products.
For example, Geoscan products are used in cartography, agriculture, exploration and other civilian industries and are exported to more than 100 countries. The company "Motorika" produces innovative medical equipment. In the post-conflict period, which will come sooner or later, there will be an external demand for products that are in demand on the Russian market today. What is now necessary for the domestic market is already becoming our competitive advantage.
— What is the share of small and medium-sized businesses in Russian non-primary non-energy exports?
— In terms of volume, 90% of non—primary non-energy exports are accounted for by the largest exporters and 10% by small and medium-sized businesses. At the same time, the situation is reversed in terms of quantity.: 90% of exporters are small and medium—sized businesses, and only 10% are large companies. We believe that small companies are the most mobile and adapt quickly to changes. That is why we have been focusing on them for a long time: we have support measures and various product promotion tools that encourage small and medium-sized businesses to enter foreign markets.
— Are the current state support measures sufficient?
— I think that there are never enough support measures. Now, not only their number is important for entrepreneurs, but also stability, as well as the guarantee of a consistent policy towards exporters. This is one of the main questions that businesses are asking today.
We regularly measure the mood of entrepreneurs through surveys. Three years ago, the share of exporters, primarily representatives of small and medium-sized businesses, who positively assessed their export prospects was about 57%, but now 71% of respondents are confident in their company's development prospects related to supplies abroad.
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