In addition, experts in the area of military economics and entrepreneurs intending to built their relationship with that would be interested in having al least some idea of the RF military expenditure dynamics over the past period. Such a data is also provided in the form of table and characterizes the relative change in expenditure, providing that the differences between the respective expenditure values of the following budgets were considered: the one of the prior year, as of the beginning of the year FB-20000 and as of the end of the year (upon two corrections)-FB-20002, and the current year’s budget FB-2001 compared with the 1999 budget- FB-1999. The inflation factor was considered following the official statistical data: that is, in 2000 vs. 1999- 20.2%, and in 2001 vs. 2000- 12%.
Name of the Section of FB
Change relative to FB-1999, as % (with regard to inflation/without regard to inflation)
End of the year
+50,3 / +25,1
+123,5 / +86,0
+129,1 / +70,2
«law Enforcement and Provision of Security of the State»
+55,5 / +29,4
+117,3 / +80,8
+156,5 / +90,5
«Mobilization Arrangements and Preparation of the Economy»
+11,1 / -7,6
+85,5 / +54,3
+11,1 / -17,5
The positive dynamics of the noted expenditure and the fact that the set standard expenditure level set earlier has not yet been reached testify to the sector’s potential for further growth.
V. Tsymbal, E. Luboshitz, E. Khrustalev
Regulation of Foreign Trade in Agrifood Commodities
Recent years witnessed strengthening of the government policies pertaining to foreign trade in agricultural and food commodities. Beginning from 1998 the system of tariff regulation is reviewed rather frequently. Some innovations were incorporated into the customs duties>
The active implementation of protectionist agrarian policy started in 1994. The initial tariff regulation of import was rather simple: tariffs (i. e. duties calculated as percent of customs prices) applied to maximally aggregated commodity groups. Combined tariffs were first used in 1996. The Russia's foreign trade policy aimed to protect domestic market from imports and at the same time eased regulation of agrifood exports, that were fully liberalized in 1996.
1998 was the turning point in the government trade policies. The financial and economic crisis entailed major transformation of the foreign trade regulation in agrifood sector. Export restrictions were restored: oilseeds export had to be licensed, and combined customs duties were imposed on exporters of oilseeds, some sea products and ethyl alcohol.
In 2000 the foreign trade policies developed in two directions: (1) more flexible regulation letting domestic producers curtail unfair competition and (2) rigid control of agrifood exports. The policy of foreign trade agrarian protectionism became even more complicated as new, primarily non-tariff, regulation tools were implemented.
In 2000 similar to 1999 temporary special and seasonal duties (except for import tariff on white and raw sugar) were used. A new step in regulating sugar imports is the introduction of tender sale of tariff quotas for 2001 (see IET report, December 2000). The customs duty on 3.65 million tons of raw sugar imported under the tariff quota is reduced to 5%. There were no procedure violations when selling the quota to tender participants. The amount of quota sold generally covers the Russia's demand for imported raw sugar and potentially fosters domestic production of sugar beets. The tender resulted in about US$209 million budget revenues. At the same time it entails some potential problems on the domestic sugar market. Its close rate was unexpectedly high. Given that all the tender participants took credits for buying quotas, their expenses per ton of raw sugar may even be higher that those of importers that supply sugar in excess of quotas. One should also take into account that companies-buyers of quotas may not be able to compete with a large number of small importers of white and raw sugar sometimes using different schemes of evading taxes and understating the customs value. In 2001 the import duty on raw sugar in excess of the quota is 30% but not less than 0.09 Euro per kilogram, on white sugar - 30% but not less than 0.12 Euro per kilogram.
Another evidence of a more active use of non-tariff tools in regulating agrifood trade is the setting of technical barriers to poultry imports. At the end of 1999 the government approved a list of ports through which poultry can be imported from countries having no land communication with Russia. The limitation didn't apply to poultry imported from the US and the EU under the humanitarian aid programs. Beginning from June 2000 border cross points have also been defined for countries exporting poultry to Russia by trucks. The effect of non-tariff limitations was mitigated by lower import duties. Beginning from August 2000 they were reduced from 30% (but not less than 0.3 Euro per kilogram) to 25% (but not less than 0.2 Euro per kilogram) and unified for all kinds of poultry. Such a reduction was supposed to drag importers out of the shadow sector and to induce them to declare actual names of imported items. This liberalization of import conduced to some growth of poultry supplies to the country. As compared to corresponding period of 1999, in January-November 2000 the Russian poultry import increased 2.7 fold, about 70% being supplied from the US. Given that Russia will hardly sustain the growth of domestic poultry production that began after the import drop driven by 1998 crisis.
The import of meat was restricted by another kind of non-tariff barriers. Due to the spread of bovine spongiform encephalopathy in some European countries, Russia banned import of beef, cattle and feed additives from Great Britain, Portugal, Switzerland, some districts of France, Germany and Ireland. Ukraine remains the major supplier of beef to Russia accounting for over half of corresponding imports (Table 1). Despite a notable reduction of beef import from Germany due to veterinary bans, the country is the second major supplier of this product to the Russian market. While supplies from many European countries, where cases of bovine spongiform encephalopathy have been reported, shortened, the beef import from Lithuania and the US noticeably grew (5.5 and 2 fold respectively).
Table 1. Geographic structure of beef imports in January-September 2000
2000 as % of 1999, %
Source: Own calculations based on data of RF Customs statistics of foreign trade.
In this situation domestic beef is being substituted for imported one. Besides, the reduction of beef import is beneficial for producers and importers of poultry and pork. Meat has always been the principal item of the country's food imports accounting for 10-13% thereof. As different from other basic agrifood commodities, imported meat and meat products constitute a large share of the domestic consumption (Table 2). Given poor development of the Russian livestock sector, shorter import may entail higher prices for beef on the domestic market. As compared to Russia, the effect of veterinary bans in the EU countries was much more serious. Within recent months the consumption of meat in the EU in general fell by 27% and in some countries - by 60%. A mass refusal of Europeans to consume beef seriously undermined prices for it. Given shortage of domestic output and low prices for EU-origin beef, in 2001 Russia will probably increase import of this product, and one cannot exclude that it will be supplied from the European countries. Besides, the current situation on beef market can change the geographic structure of world supplies of poultry and pork redirecting them to the European markets and causing drop of sales in Russia.
Russia: share of net imports of basic agricultural commodities in their overall domestic consumption in 1990-1999*, %
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