The “Made in Russia” strategy: a limited instrument for economic diversification

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Thanks to the efforts of the authorities, the diversification of the Russian economy is progressing, particularly in certain sectors such as information technology, pharmaceuticals, the automotive industry and the agri-food sector. In the latter case, the process was encouraged by Russian counter-sanctions adopted as a response to Western sanctions. Economic diversification is regarded as a way to simultaneously reduce the country’s dependence on imports and on hydrocarbons. However, the diversification faces structural barriers. It is subject to the availability of inputs, the modernization of the productive apparatus and the improvement of the business environment. The requirement to substitute local production for imports and/or increase local content is limited by the availability and quality of local components. Additionally, the development and modernization of local production chains very often require the import of machinery and technology from Western countries.

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