Poverty threatens Soviet-style Russians with sanctions – Wel.nl

Russia, imposed by Western sanctions, is beginning to fall into a poor economy that relies on poor home-made products instead of imports. Deficits are beginning to evoke memories of the consumer barren land of the Soviet Union.

Although friendly countries like China and India can find new suppliers for some Western manufactured goods and components, poverty is starting to improve.

The difference with poverty before the fall of the wall: then the Russians did not know better. Now it is.

Moscow already faces serious challenges.

For example, the Russian aviation sector is in crisis due to the inability to obtain spare parts from Western aircraft manufacturers. About 80 percent of Russia’s merchant fleet consists of foreign-made aircraft, mainly Airbus and Boeing, both of which no longer trade with Moscow.

Ural Airlines, which has more than 50 Airbus aircraft, predicts that other aircraft will be able to fly safely for a few more months before being “cannibalized” – with some planes landing permanently to be disassembled. Bobeta, a low-cost airline that is part of the state-run Aeroflot Group, has already reduced its fleet from 41 to 25.

Meanwhile, Ericsson and Nokia’s decision to shut down trade with Russia has led mobile carriers around the world to search for cell towers and components used to maintain and expand the network parallel to the United States and Europe. . China’s Huawei also seems reluctant to fill the gap, with Russia postponing the next generation 5G technology indefinitely, a service carriers were testing before the invasion of Ukraine.

“In five years, there will be a huge gap in mobile services between Russia and the rest of the world,” said Gregory Bagunov, a Russian technology expert.

Following the recent departure of French carmaker Renault, Russia is set to resume production of the Moskvich – a Soviet-era brand that went bankrupt two decades ago for failing to meet foreign standards.

However, supply disruptions not only affect assembly lines that rely on advanced technology, but also the use of imported materials. “Sanctions against the Russian Federation have broken all the logistics in place in our country,” Russian Transport Minister Vitaly Zhavlyev told reporters during a visit to Russia’s Astrakhan region last weekend.

For Russians, the possibility of reduced consumer choice and poor quality threatens.

“Of course for anything more advanced, they have to rely on what they can produce, and they will use designs or templates that are 10 or 20 years old,” said Thomas Malmloff, a senior scientist at the Swedish Defense Research Institute. “The technical gap [met het Westen] It will get bigger and they will not be able to control it. “

Industries that require microchips and other hard advanced technology have been severely affected. “Cars, tanks, sanitary ware, even printing paper. This is where you need microchips, but special chemicals and other imports can be difficult to get to Russia, ”said Anders Asland, an economist who has long studied Russia.

Following the recent departure of French carmaker Renault, Russia is set to resume production of the Moskvich – a Soviet-era brand that went bankrupt two decades ago for failing to meet foreign standards. His resurrection, perhaps with Chinese help, could start the production of domestic alternatives or the new generation of clinkers could block Russian roads.

Even the most optimistic analysts say it could take at least a few years for Russia to build commercial aviation assembly lines made entirely of local components. Other analysts have predicted that this could take longer.

Natalia, the owner of a logistics company in Moscow, refused to give her last name for fear of the government, explaining that sanctions had pushed up prices. The ban on EU trucks entering Russia or Belarus means that cargo carried by land must now be unloaded at the border and then loaded into new trucks that can pass through Russia and through it.

In the best cases, that means delays; Those sent in two weeks are now six weeks, he says. But some parts, such as industrial fan propellers and rubber stamps used by Russian furniture makers and the Russian Defense Ministry, were suspended indefinitely.

“Production does not stop at shoes, clothes, sausages, etc., but as was the case in Russia in the 60s, 70s and 80s, when the quality was poor and expensive, we go back when you buy. The product you can already get,” he said.

“I remember if you wanted a kitchen you had to go to the store and get a number and stand in line,” she continued. “Not for hours or days. Sometimes you wait half a year for a kitchen. I’m afraid those days will come again. “

• https://www.washingtonpost.com/world/2022/05/26/russia-economy-aviation-sanctions-shortages/