Poverty Soviet style threatens Russians through sanctions – Wel.nl


Burdened by Western sanctions, Russia is falling into a poor economy that relies on lousy homemade things to replace imports. The shortage has begun to evoke memories of the wilderness of consumers, which was the Soviet Union.

While it may be able to find new suppliers for some Western-made goods and components in friendly countries like China and India, poverty is starting to trump.

The difference with poverty before the fall of the Wall: Then the Russians did not know better. Now, it is.

Moscow is already facing serious challenges.

For example, because it is not possible to get spare parts from Western aircraft manufacturers, the Russian aviation sector is in crisis. About 80 percent of Russia’s commercial fleet consists of foreign-made aircraft, mainly Airbus and Boeing, both of which no longer do business with Moscow.

Ural Airlines, which has more than 50 Airbus planes, has predicted that it could fly them safely for just a few more months before having to “cannibalize” other planes – permanently grounding some planes to remove them for share. The low-cost airline Pobeda, part of the state-run Aeroflot group, has already reduced its fleet from 41 to 25 aircraft.

Ericsson and Nokia’s decision to freeze business with Russia, meanwhile, has led mobile companies to suddenly search the world for used mobile masts and parts to maintain and expand a network more or less on a par with the US and Europe. Even China’s Huawei appears reluctant to fill the gap, and indefinitely postpones Russia’s rollout of next – generation 5G technology, a service provider had tested before the invasion of Ukraine.

“Within five years, there will be a huge gap between Russia and the rest of the world” in the field of mobile services, said Grigory Bakunov, an expert in Russian technology.

Following the recent departure of French carmaker Renault, Russia is ready to restart production of Moskvich – a Soviet-era brand that went bankrupt two decades ago after failing to live up to foreign quality standards.

But supply disruptions have not only affected assembly lines that rely on advanced technology, but also those that use imported materials. Sanctions “against the Russian Federation have violated virtually all logistics in our country,” Russian Transport Minister Vitaly Savelyev admitted to reporters last weekend during a visit to Russia’s Astrakhan region.

For the Russians, the prospect of reduced consumer choice and poorer quality threatens.

“Surely for something more advanced, they will have to rely on what they can produce and they will use designs or templates that are maybe 10 or 20 years old,” said Tomas Malmlöf, senior researcher at the Swedish Defense Research Institute. “The technology gap [met het Westen] will get bigger and they will not be able to bridge it. “

The industries that need microchips and other hard-to-reach advanced technology are hardest hit. “Cars, tanks, hygiene products, even printing paper. This is where you need microchips, but also specialty chemicals and other imports that Russia may have a hard time getting, ”says Anders Aslund, an economist who has studied Russia for a long time.

Following the recent departure of French carmaker Renault, Russia is ready to restart production of Moskvich – a Soviet-era brand that went bankrupt two decades ago after failing to live up to foreign quality standards. His resurrection, possibly with Chinese help, could set in motion the production of domestic alternatives or a new generation of clunkers clogging Russia’s roads.

Even the most optimistic analysts say it could take at least a couple of years for Russia to develop assembly lines for commercial aircraft made almost entirely of local components. Other analysts predict that it could take much longer, if at all.

Natalia, the owner of a logistics company in Moscow who refused to disclose her last name because she feared the government, described how sanctions led to price increases. The ban on EU lorries entering Russia or Belarus means that goods transported overland must now be unloaded at the border and then loaded onto new lorries that can enter and pass through Russia.

At best, it means delays; what used to be sent in two weeks now takes six weeks, she says. But some parts, such as industrial fan propellers and rubber seals used by Russian furniture manufacturers and the Russian defense industry, were held up indefinitely.

“Production does not stop from shoes, clothes, sausages, that kind, but we go back to how Russia was in the 60s, 70s, 80s, where the quality is worse and the price is higher when you buy product , you can already get, “she said.

“I remember how if you wanted a kitchen, you had to go to the store and get a number and stand in line,” she continued. “Not for hours or days. Sometimes you wait half a year for a kitchen. I’m afraid those days will come back.”

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