Publication: Monitor Volume: 4 Issue: 83

Customs data reported by the Ministry of Foreign Economic Relations (excluding individual traders) during the first two months of 1998 indicate that Russia’s trade with other CIS countries increased by some 3.7 percent, relative to the same period in 1997. Along with a 1.3 percent decline in Russia’s trade with non-CIS countries, these trends meant that the former’s share in Russia’s total trade increased to 24.4 percent (up from 23.1 percent), while the latter’s share fell to 75.6 percent (from 76.9 percent). The growth in Russia’s CIS trade was entirely due to increased imports, which rose by 3.7 percent. By contrast, Russia’s exports to other CIS countries declined by some 1.4 percent. The falling but still large share of non-CIS trade was therefore responsible for a 2.2 percent decline in Russia’s overall trade flows, but these still corresponded to a $2.8 billion trade surplus at the end of February. (Russian news agencies, April 21-22, 26)

While falling oil prices are widely thought to have devastated Russia’s foreign trade balance this year, this is not apparent in the January-February data. Compared to year-earlier levels, Russia’s crude oil sales to CIS countries during the first two months of 1998 increased both in volume and value terms, by 26 and 31.5 percent respectively. Likewise, observers concerned about Russia becoming a “raw materials appendage” to the developed capitalist countries may be glad to learn that Russian machine-building exports to non-CIS countries increased during this time by 3.9 percent, while revenues earned from natural gas exports fell by 15.6 percent.

Two months are not a long time, and the exclusion of data about trade conducted by individuals could introduce serious biases. Still, these trends suggest that foreign trade is unlikely in the near term to lead Russia’s long-awaited economic recovery.