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Worldcrunch

Protectionism, Sewn In To The Fabric Of Russia. Literally

Article illustrative image Partner logo A Russian soldier suited and booted.

MOSCOW - The Russian government has made quite clear its desire to protect the national light manufacturing and textile industry.

A thick packet of documents from the Ministry of Economic Development (MED) lays out how the government intends to change the law regarding procurement of materials for federal agencies, including the military. MED essentially wants to forbid the purchase of foreign cotton, wool, linen, silk, synthetic fabrics, sewing thread and rubber. And all  finished products, including sports clothes, knits, footwear, socks, pillows and sheets, must be made in Russia, under the MED’s recommendations. 

“Light manufacturing in the country is basically dead, we have to resurrect it somehow,” said a source in the government. “If we don’t give them stable orders now, there’s a chance that we will totally lose the industry.”

According to the same source, the plan was supposed to have been adopted by last May, but the process has been drawn out by lengthy reviews by certain government agencies, including the Ministry of Internal Affairs. The reviews were finished and the final document put on the Vice Prime Minister’s desk only last week. 

According to a law signed by President Vladimir Putin last March, by the end of 2014 the fabric used for federal uniforms must be domestically produced, although that law mentions only the specific worsted fabric used for the uniforms for certain members of the armed forces.

After this decision was made in March, Dimitri Rogozin, who is in charge of Defense procurement, said on his Twitter account, “Russian companies will be getting long-term contracts and will be able to modernize their manufacturing.”

This additional law would greatly increase the number of materials and types of fabrics that the government would be required to procure from domestic producers. 

Experts are divided over how this decision will actually play out. “We might see a domino effect : First they restricted the procurement of worsted fabrics, then they broadened the law to include other kinds of materials. But they didn’t fully think through what could happen as a result,” said the vice-president of the BTK company, Tamerlain Darcirov. “Often, components used in manufacturing come from outside of Russia because they are simply not produced in Russia at all. You can’t act as if you can just forbid something and everything will be Ok. First there has to be analysis, and only afterwards can you make a decision.” 

Konstantin Makienko, an expert from the Center of Strategic and Technological Analysis, says that purchasing textiles abroad is safe and economically advantageous. "It doesn’t imply any risks for a country’s defense capabilities,” he said. “This kind of measure can provoke an increase in prices. When manufactures understand that there is no competition from abroad whatsoever, then there is no doubt that they will raise their prices.” 


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About this article source Website: http://www.kommersant.com/about.asp

Kommersant ("The Businessman") was founded in 1989 as the first business newspaper in the Russia. Originally a weekly, Kommersant is now a daily newspaper with strong political and business coverage. It has been owned since 2006 by Alisher Usmanov, the director of a subsidiary of Gazprom.

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