RUSSIAN IMPORTS FROM OTHER CIS COUNTRIES UP SHARPLY.

While Russia’s imports are also rising this year, this growth has been much more moderate than that of exports. The US$20.7 billion in imports reported at mid-year was only 8 percent above the total reported for the first half of 1999. The weak ruble continues to make imports too expensive for many consumers, many of whom seem to have readjusted to purchasing Russian goods. Although the volume of grains imported during the first four months of this year was nearly double levels of January-April 1999, imports of fresh and frozen meat, poultry, fish, milk and milk products were down 10-55 percent in volume terms.

While Russia’s exports to both CIS and non-CIS countries are growing strongly this year, imports are not. Instead, Goskomstat’s figures show that first-half imports from non-CIS countries remained virtually unchanged at US$14.8 billion. By contrast, Russian imports from CIS countries were reported up 34 percent, at US$5.9 billion. This difference is not terribly important for Russia, because CIS countries now supply only 29 percent of Russia’s imports and purchase only 16 percent of Russian exports. For other CIS countries, however, Russia remains a key–and often the largest single–trading partner.

Both politics and economics seem to lie behind Russia’s booming CIS imports. While the Russian ruble has fallen sharply against the dollar since the August 1998 financial crisis, some CIS currencies have fallen even farther. The Belarusan ruble, which traded at around US$1=49 in 1998, now trades at around US$1=500. For Russian consumers and companies which can’t afford imports from the West or East Asia, Belarusan goods may seem quite a bargain. And while Russia’s export-oriented energy and raw-materials sectors are swimming in dollars, firms in other sectors of the Russian economy continue to resort to barter and other noncash mechanisms for organizing trade with like-minded companies in other CIS countries.

Energy politics may also be behind Russia’s growing CIS imports. Although Russia is the world’s largest exporter of natural gas, Russian gas imports from Turkmenistan have surged this year. This may in part be due to the desire to keep Turkmenistani gas from finding its way into Turkey and other non-CIS markets. Despite the completion of the Baku-Supsa oil pipeline last year, the “northern route” via the Russian pipeline and rail transport systems remains a key export conduit for Azerbaijani and, especially, Kazakhstani oil. The northern route’s importance could grow further thanks to the recent completion of the Russian pipeline from Azerbaijan through Dagestan which bypasses war-torn Chechnya.

REVITALIZING GUUAM.