Russia Pursuing Economic Portfolio Diversification

  • In 2021 Russia plans to expand the food market and the expansion of grain sales.
  • Russia plans to implement a full-scale industrial reform amid the strengthening of the Russian economic portfolio. 
  • One of the major factors is the Eurasian Economic Union (EEU).

Russia’s foreign policy course is currently related to the arms market. The geopolitical struggle is regarding the arms market, and the US is Russia’s main competitor. There was also an announcement of sanctions against Turkey and India. Russia has a foreign policy course related to the hydrocarbon market.

The hydrocarbon industry is broadly comprised of three segments:

  1. Upstream, in which oil and natural gas is explored for and produced.
  2. Midstream, in which the raw materials are transported to refineries.
  3. Downstream, in which the raw products are turned into value-added, end-user products, such as fuels, plastics, and petrochemicals.
Nord Stream is a system of offshore natural gas pipelines from Russia to Germany. It includes two lines running from Vyborg to Lubmin near Greifswald forming original Nord Stream, and two lines under construction running from Ust-Luga to Lubmin termed Nord Stream 2.

The analysis of the chemistry and physical properties is essential throughout, from exploration and drilling to refining and delivery of finished products.

Additionally, in 2021 Russia plans to expand the food market and the expansion of grain sales. The Kremlin wants to diversify the country’s economic portfolio, especially given the recent snag with the continuation of the construction of Nord Stream 2.

Furthermore, Russia plans to implement a full-scale industrial reform amid the strengthening of the Russian economic portfolio.

The implementation of a full-scale industrial reform, and the strengthening of the Russian economy and industry includes the release of dozens of new products to world markets, and the entry into a geopolitical struggle over their distribution and sale. This is the 2021 Russian foreign policy directive.

Moreover, there is a multi-prong approach to the Russian foreign policy course.

  1. The implementation of the domestic structured and verified course, which requires determination and resources.
  2. Russia’s independent foreign policy, geared towards Asia, and especially China.

One of the major factors is the Eurasian Economic Union (EEU). The EEU has a long-term plan, which will be at the expense of a conscientious economy to build a political future later.

At present, it has become an attempt of the surrounding states to form a favorable course for buying oil and gas (Belarus and Armenia). That is, to achieve a convenient transport infrastructure (Kazakhstan).

The Eurasian Economic Union (EAEU) is an economic union of states located in central and northern Asia and Eastern Europe. The Treaty on the Eurasian Economic Union was signed on 29 May 2014 by the leaders of Belarus, Kazakhstan and Russia, and came into force on 1 January 2015.

However, Russia needs to fast track certain industries. It should be noted that Russia is one of the few countries that continues to expand its own manufacturing. The Kremlin is focusing on ship production expansion and the aerospace industry.

Raising and training sufficient resources will require at least one generation.  At the same time, human resources will be needed  to build the roads and houses, and perform non-automated work.

The hope for full automation pushes the deadlines to the right for another couple of generations, since automation itself requires no less resources. Russia has power plants and a lot of natural resources.

Also, Russia has the 4th highest number of migrants in the world. The majority of these migrants are from Asia, which includes Uzbekistan, Tajikistan and Kyrgyzstan. Russia is expanding into Asia and also changed the immigration requirement through the work visa path.

Overall, Russia has a lot of opportunities for the business acumen. However, there are certain nuances, when it comes to having business dealings with Russia. It is clear, there is a need to expand trade relationships and partnerships.

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Christina Kitova

I spent most of my professional life in finance, insurance risk management litigation.

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