Economy researcher: Electronics, cars deficit caused by excessive demand won’t last long
Penza, 23 December 2014. PenzaNews. The deficit of foreign-made goods, including electronics and automobiles, which are now of high demand in Russia due to the unstable exchange rate is likely to be short-lived, said Alexander Ostashkov, PhD in Economy, assistant professor of “Public Administration and Sociology of the region” department of Penza State University.
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“They have swept everything off the store shelves. Many retail chains and individual stores will now be thinking if they should buy products at the new rate, and how much to buy,” Alexander Ostashkov said in an interview to PenzaNews agency.
According to Alexander Ostashkov, the current economic situation is very different from the 1998 crisis when the Russians massively bought food without even thinking about imported technology, since they did not get accustomed to it.
“Besides, there was visible food deficit in the Soviet Union, and people were used to buying and keeping products with long shelf life. Currently there is no problem with products, as well as no reason for the deficit. There might by some small correction due to crop failure. Stores are also replacing products that have come under sanctions from other countries. This will last for around six months. We used to eat Polish apples, now we’ll have Argentinian ones – not a big deal,” the expert said.
According to him, the reasons of the two crises are also different.
“The crisis of 1998 has become a sort of command “Drop down and give me push ups!” for the Russian economy. It dropped down and then actually did push ups due to the fact that the devaluation increased domestic production competitiveness. It could have quickly been provide because there still were functioning industries since the days of the Soviet Union. Labor market and employment structure were a little different. There were more people employed in the industry who eked out a miserable existence, but retained their jobs. And that is along with frontal rising of commodity products that had been in demand in Russia since 1999. This, above all, is oil, gas, metals and ores. Growth continued until recently. And, of course, at the time there was an undeniably competent policy of [Viktor] Gerashchenko in the Central Bank and [Evgeny] Primakov as chairman of the government,” the agency interlocutor said.
He stressed that one of the causes of the economic situation in 2014 was the so-called “oil needle.”
“Over the past 25 years, we have got hooked even stronger than ever before. The main trouble is that we almost did not produce products of high technologies, including mechanical engineering. And unfortunately, so far there have been no measures taken to develop our own production. But I think that the government is working on it. I mean the measures that would be associated with the stimulation of production here to bring the money back into the country. And it's not only statements about the capital repatriation, but the creation of favorable business climate. This included the introduction of certain tax benefits associated with technical re-equipment, development and introduction of innovative products, export promotion, and so on,” the economist said.
He also expressed confidence that the situation in the Russian economy may stabilize in the near future.
“Based on past experience, I think that this will happen around the end of January. By the end of the year, the major players — both banks and companies — will have an increased demand for currency to pay credits. In previous years, many private traders bought the currency at the end of the year, but in January there was a decrease. Moreover, the economy will begin to adapt to the current situation, if something supernatural does not happen, for example, some new “terrible” sanctions,” Alexander Ostashkov concluded.