CONCERNS OVER TRENDS IN RUSSIA’S FOREIGN TRADE.

Russia recorded a massive $18.5 billion surplus in foreign trade in the first six months of 1997. However, this surplus is accompanied by some worrying trends. For the first time since 1992, Russia’s foreign trade registered a decline, falling 3.9 percent compared to the same period last year. Trade with the CIS fell 11.7 percent, and with other countries by 1.3 percent. Exports were down 2.4 percent to $40.4 billion, and imports by 6.4 percent to $22 billion. Large declines were reported in imports from the CIS of sugar (40 percent) and alcohol (50 percent). (RIA Novosti, September 23)

Russia’s trade was hit by a slump in the world price of primary products such as oil, metals, and timber, which now account for 69 percent of Russia’s exports. While the total money value of exports fell, the physical volume of most categories of export actually rose. On average, the price of exports fell 6.6 percent, with newsprint and ferro-alloys falling 30 percent, copper by 12 percent, nickel and aluminum by 10 percent. There are limits to Russia’s capacity to keep pushing up the volume of exports to compensate for the shift in the terms of trade against them. Exports already account for 42 percent of Russia’s crude oil production, 33 percent of refined oil, 37 percent of gas, 75 percent of mineral fertilizers, and 83 percent of pulp. Any further deterioration in export prices could put the squeeze on Russian energy and metal exporters — and on the federal budget, which is heavily dependent on the excise taxes they generate.

Russian Government Moves to Tighten Control Over Financial Markets.