flamming_python Mon Dec 17, 2012 9:05 am
What very many people miss when analysing Russia's economy as natural-resource exporting, or natural-resource dependent - is that yes indeed; Russia, as the world's most naturally rich country - does indeed base its economy off its own resources and land and you could very well say that its 'natural-resource dependent'. But the figures tell far from the whole story - a great proportion of such exports - are processed natural resources or value-added industries that require raw materials extraction in order to function.
"Oil and Gas" are in fact thousands of kilometers of pipelines (creating massive orders for Russia's metallurgical enterprises), dozens of refineries with tens thousands of educated experts, a whole fleet of specialised ships and naval constructions (big boost to Russian shipbuilding and maritime engineering firms), countless gas power-plants all over the country with many qualified workers & professionals, production of various high-octane fuels such as Kerosene (vital for defense and civil aviation), not to mention one of the fuels for Russia's considerable chemicals industry; especially polymer & plastics production of many various kinds.
"Coal and Metal ores" are the basis for Russia's huge steel mills, rolled steel, sheet metal and all kinds of specialized constructions of sizes from small details to ship hulls. Shipbuilding, military-industrial, automobiles, aircraft & space materials, new railway tracks are all dependent on them. Exotic materials too are based off such mines and extraction; titanium production (Boeing buys titanium wings and components from the Urals), composites, production rare metal alloys that are made only in a handful of countries in the world..
"Timber" is increasingly not exported raw (there have even been tarrifs introduced in an attempt to reduce raw timber exports), but fed into Russia's rapidly growing wood-processing industries; making cardboard, wood panels & boards, paper, construction parts & materials, chemicals, furniture-production & wood-crafting, even wood pellets (used as biofuels).
"Grains, Cereals, Fish & Livestock" - all steadily become the basis of ever more-higher value industries & produce. Processed-foods; dairy-products, meats, juices, yogurts, etc... are rapidly expanding. Agricultural production is growing fast, but the bigger story is the diversification within all these agricultural sectors; in livestock - turkey, rabbit, various new cattle breeds and other exotic animals that were never traditional in Russia are now being bred in larger quantities. Aqua-farms are being set-up & seafood production is diversifying into more exotic territory. Experiments with growing various types of new grains and vegetables are taking place in Russia's agricultural regions; new exotic crops are being grown such as tea, wine production is being revived, large, industrial-size greenhouses for growing vegetables all seasons are springing up in many parts of the country;
"Uranium" is of course - nuclear power, defense industry, science, etc... And the same goes for all sorts of exotic elements and compounds that are found in Russia but in few other places. Even diamonds mined in Russia are often of industrial-grade and used for production purposes in order to create higher-value products.
I could go and on but I have to go back to work. Point is - Russia can't live without its resources and nor should it. The key thing is to continue weaving off not natural resource dependence, but the seductive dependence on simple resource extraction and export of unprocessed resources. Russia must keep moving towards higher-value processing, adding more and more steps to the chain until the country's economy can claim full-cycle production of such things as the most complicated electronics, high-tech goods, advanced materials, etc... with the ability to fulfill each step along the way (provided its profitable) - from the extraction of silicon, to the production of circuit boards, to the programming of operating systems for ready devices. Concurrently - infastructure must continue to receive vast investment - it's the only way to ensure that all these production chains will be cost-effective and profitable; Russia is a vast country and transport is rarely cheap - but with the right amount of investment it could well turn out cheaper and potentially profitable to produce a lot of this stuff domestically and export ready goods, rather than importing materials and components.
Last edited by flamming_python on Mon Dec 17, 2012 9:21 am; edited 5 times in total