- Oleg Vieukin, a former financial official, told Reuters that sanctions on Russia would hit tech products.
- Russia’s tech industry relies on imports, so these products must be re-produced domestically.
- If the situation does not improve, Russia’s technological development will decline, Vieukin said.
Oleg Vyugin, a former senior Treasury official and central bank official, said Russia’s technology development could see a multi-year decline due to sweeping sanctions over the Ukraine war Reuters in an interview on Tuesday.
This is because, in terms of technology, Russia relies on imports, which have been hit by sanctions and boycotts. Therefore, the country will have to develop its own products to replace these imports.
“The world will move forward, but Russia will only use some second-rate technology and spend a lot of resources on rebuilding what the world already has, but cannot import it,” said Vieukin, a former deputy finance minister and deputy minister of the Bank of Russia Governor. He retired from the Moscow Exchange this year.
Vieukin also told Reuters “sanctions are in effect” because Russia’s economic growth has been negatively affected.
Vieukin’s remarks contrasted with President Vladimir Putin’s positive comments on the economy. In early September, Putin said the country’s economy was dealing with Western sanctions. Nearly seven months of war, Russian economy It does continue to appear resilient. The energy giant’s economy has been buoyed by energy exports underpinned by high prices that were rising even before the war.
But imports to Russia are severely restricted, as evidenced by record current account surplus The second half of 2022 will reach $70.1 billion. The current account surplus is a key measure of trade and investment flows, and trade is an important component of this indicator.
Russia has tried to counter sanctions by substituting imports from non-sanctioned countries or homegrown products.But success is limited, analysts are Bruegel, The Brussels-based think tank wrote in late March.
“High-tech products are developed with input from many countries, but few of them can function without input from the European Union or the United States,” the analysts wrote. “As a result, a single economy cannot replicate the capabilities of a global network.”
Semiconductor chips, aerospace parts and medical products are among the heavily affected imports, Bruegel analysts pointed to.
Russia’s state-owned airline Aeroflot has started stripping spare parts from working planes due to supply shortages caused by sanctions, Reuters Reported in August.
“If the situation does not change, the level of technological development in Russia will gradually decline,” Vieukin said.