In the course of radical Russian reforms, Siberia is actively entering international trade. The state monopoly on foreign trade has been abolished and producers (and other market agents) now have the right to act independently in foreign markets. The foreign economic activities, undertaken both by regional authorities and those who were new to exportation and importation, proved to be a challenge.
Since reforms began, Siberian foreign trade has experienced both good and bad. Dramatic internal circumstances were compounded by less than favourable dynamics of world prices of primary and raw materials, which make up the main share of Siberian export.
Despite this, Siberia makes a more and more significant contribution to Russia's major exports. In 1992, Siberia's share of natural gas supply of Russia's was 99%, in oil - 88%, aluminium - 85, copper - 73, coal - 59, nickel - 45%, saw-timber - 34%, cellulose - 32%, nitrogen fertilizers - 27%, and in oil products - 12%. All in all, that year Siberia exported goods worth $18.2 billion and accounted for nearly 42% of Russia's exports. In 1994, as machinery and equipment exports fell as a proportion of Russia's total exports, world prices of raw materials and fuel rose considerably. One can therefore assume that Siberia's exports approached 50% hurdle of Russia's total. Regretfully, government statistics do not give detailed enough information about Siberian foreign trade, so there are only indirect estimations possible - on the basis of the regional data.
Customs information, which adequotely represents the foreign trade of Russia as a whole, alas, doesn't maintain this quality as for individual regions. In general, one should bear in mind that the exports (or imports), of a region of a country, is difficult to define. Products, manufactured in one region, frequently go through customs in other regions and, therefore, are registered in statistics as the export of the latter.
The end of the state monopoly on foreign trade hasn't meant the immediate overcoming of profound traditions of centralism. Until recently, Moscow maintained its primary rights to distribute exports quotas and licenses, especially as regards the so called "strategically important products" (there were not only fuel, rare and non-ferrous metals on the list, but also rolled steel, timber, - that is, almost all the major items comprising Russia's exports). Since the vast majority of Siberia's export is formed with "strategically important products" - the most of which are registered centrally - the region's customs statistics are essentially incomplete.
Methods of calculation regional export earnings are being established with the consolidation of regional customs services, with creation of specialized local intermediaries of foreign trade and accumulation of experience by Siberian exporters. In 1993, these regional customs statistics included about 20% ($3.8 billion) of Siberia's total export, and in 1994 this figure had risen to a quarter ($6.5 billion). However the main exports of the region, formed by gas, oil and oil products are, in fact, not included in these statistics. (For other export sectors, there were oversights too, but smaller).
Table 1
EXPORT EXPORTERS
share, % amount, number
mil dollars
1993 1994 1994 1993 1994
Chita oblast 32.7 0.8 49 412 380
Krasnoyarsk krai 21.7 17.8 1,165 260 468
Tyumen oblast 13.9 3.9 255 398 304
Kemerovo oblast 13.9 29.7 1,943 273 565
Omsk oblast 6.9 7.8 514 465 776
Altai krai 2.6 4.1 269 406 960
Novosibirsk oblast 2.4 3.0 261 539 799
Republic of Buryat 1.8 0.7 48 466 470
Irkutsk oblast 1.6 22.9 1,499 119 567
Tomsk oblast 1.6 4.5 219 284 553
Republic of Khakas 0.8 3.8 248 8,6 80
Republic of Altai 0.1 0.2 12 43 84
Republic of Tuva 0.03 0.01 62 24
Total 100 100 6,554 813 6,037
Table 2
Commodity structure of Siberia's export
1993 1994 1994/1993
mil share mil share
dollars % dollars % %
Chemistry products 1505.9 39.4 961 14.7 64
Fuel 821.7 21.5 1201 18.3 146
Non-ferrous metals 699.6 18.3 2355 35.9 337
Machinery and equipment 265.2 6.9 455 6.9 172
Ferrous metals 256.7 6.7 970 14.8 378
Non-food consumer goods 125.9 3.3 125 1.9 99
Wood products 117. 3.1 385 5.9 329
Raw materials 15.8 0.4 59 0.9 370
Food 13.5 0.4 42 0.6 307
TOTAL 3821.5 6553 171
What tendencies can be observed in Siberian exports?
Eastern Siberia accounted for 59% of Siberia's exports in 1993. Since 1992 export deliveries have increased dramatically (Table 1), and a number of Siberian exporters increased by more than 2 thousand. In 1993 about 15 thousand export deliveries were made, while in 1994 more than 87 thousand.
A reduction of the number of exporters in Tyumen and Chita oblasts may mean both their going out to foreign markets through the center, and the business expansion of specialized local intermediaries of foreign trade. By 1993 Siberia had 13 large-scale firms specializing in foreign trade. In 1993 their share in Siberia's export exceeded 7%. The accumulation of experience in foreign trade and the formation of corresponding infrastructures in the regions give opportunities to export regardless of external intermediaries. This can be seen in export dynamics of such industrialized regions as Krasnoyarsk krai, Kemerovo and Irkutsk oblasts. There export figures rose from $800 to $1,160m, from $500m to $1,900m and from $60m to $1,490m respectively. A reduction of the Tyumen oblast's share in Siberia's export was caused by many gas and oil extracting companies creating their representations in Moscow and registering trade transactions in the capital.
While their number is rapidly growing, Siberia's exports are concentrated by comparatively few agents of foreign trade. In 1993 almost two hundred of 3,813 exporters filled orders worth more than $1 million each. In this year a share of 1% ($37 million) of total exports was exceeded by no less than 16 enterprises and intermediary firms. These accounted for about 70% of Siberia's visible exports. Among the main "hard currency" earners there were raw material extraction and refining, non-ferrous metals producers, oil extraction and oil chemistry companies.
In 1993, Priargunsky mining-chemistry plant (Chita oblast) was the leader. Its share amounted to 32% of Siberia's export! In 1993, 6 enterprises exceeded an export quantity of $100 million, in 1994 there were 13 such enterprises: 6 non-ferrous and 2 ferrous metals plants, 1 - coal extracting company. In 1994 the producer of "winged metal" - Bratsk aluminium plant - became the new leader.
In 1994, foreign trade activity increased along with the number of Siberian exporters. Thus, 118 enterprises of 6,037 exporters had hard currency receipts of more than $5 million each: 1 in Chita oblast, 13 in Tyumen 5 in Tomsk, 2 in the Republics of Khakas and Buryat, 11 in Novosibirsk oblast and Altai krai, 15 in Krasnoyarsk krai, 35 in Kemerovo and 18 in Irkutsk oblasts. Of course, most of these companies were raw materials extracting and refining enterprises, and chemical plants, but encouragingly, of the 118 above-mentioned exporters include 35 machinery and equipment producers.
Which Siberian products are in demand in the international markets at present?
The current position of Siberia in the world market was as usual conditioned by the export of primary and raw materials and fuel. The exportation of raw materials offers little scope for the long term development of the economy. However, within the next decades raw materials and primary goods will remain the principal export items of the eastern regions of the country.
The commodity specialization of Siberia's export was deepening. In 1993 inorganic and organic chemistry products, fuel, aluminium and ferrous-metals accounted for a share of 77% (Table 3). The peculiar feature of the year was a mass export of Siberian machinery and equipment to a total of 55 countries.
In 1994, according to regional customs data, marked changes took place in the commodity structure of Siberia's export. Shares of raw materials, ferrous metals increased 4-fold; in non-ferrous metals, wood products and food, a 3-fold increase and the share of machinery and equipment products - more than half as much again, while export of chemistry products and of non-food consumer goods reduced.
Table 3.1
Industrially developed countries
1993 1994 1994/
mil share mil share /1993,
dollars % dollars % %
GREAT BRITAIN 1220 31.9 144 2.2 12
NETHERLANDS 453 11.8 463 7. 102
USA 247 6.4 985 15. 398
JAPAN 155 4.0 862 13.1 554
FRANCE 129 3.3 117 1.7 90
GERMANY 107 2.8 224 3.4 215
ITALY 94 2.4 124 1.8 131
SWITZERLAND 77 2.0 122 1.8 158
FINLAND 48 1.2 109 1.6 225
Total 69. 54.4
Where do Siberian exports go?
Siberia's foreign trade relations have expanded rapidly. In 1992 the region traded with 79 countries (including former USSR republics), in 1993 Siberia's products were exported to 92 countries, and in the following year - to 97. In 1993 69% of Siberia's export were absorbed by 25 industrially developed countries, 13.4% - by 16 former socialist states, and less than 5% - by 37 developing countries. It is clear that, as before, the main export routes lead to industrially developed countries. In 1993, the top four recipients of Siberia's exports accounted for 54% of the total, and in 1994 five countries consumed a good half of Siberia's exports.
Developed countries, whose share in Siberia's export in 1993 exceeded 1% ($38 million), are placed in the Table 3.1. Canada, Australia and 14 European countries remained just off the table by this criterion. For many of these countries, in spite of a small absolute volume of imports from Siberia, in 1994 a rapid growth of Siberia's commodities import was typical. Luxembourg, Australia, Spain and Portugal were especially distinguished among those omitted from the table (15-fold plus growth).
In 1993, a one third of Siberia's export was directed to Great Britain. A year before the main importer of Siberian products were Netherlands (the country's share in Siberia's export reduced from 20% in 1992 to 12% in 1993).
The volume of trade with the USA greatly increased in both absolute and relative terms. The share in Siberia's export rose from 5.3% in 1992 to 16% in 1994, when the USA imported goods worth $985 million. As usual, Siberia was supplying mainly raw materials, but the list of items delivered was rather broad.
From year to year, the quality of regional customs data, which characterizes trade relations between Siberia and former USSR republics, has improved. In 1993 and 1994, this group's total shares of Siberia's export were 13% and 16.5% correspondingly. The fastest re-establishment of trade flows took place with the neighboring Kazakhstan. In 1993 Kazakhstan received goods worth $137 million, and in 1994 that figure soared to $432 million. Formerly, the Siberia's economy was closely tied to Ukraine and Byelorussia. At present, Ukraine shifted to second place after Kazakhstan in the list of former Soviet Republics - ($49m in 1993, and $324 m in 1994). A dramatic cut must be noted in export shipments to Byelorussia - from $144 to $98 million in 1994.
The customary level of trade with Socialist and former socialist countries has been maintained (Table 3.2). And it is not a surprise that China is taking a leading role, not simply due to its proximity to Siberia, but also because of the scale and mutual specialization of the two economies. Romania may also prove to be a close partner for economical co-operation, already this year, export to Romania was showing impressive dynamics.
The total share of the other countries in this group didn't exceed 1.3%, the biggest of these being the Czech Republic and Slovakia.
Export to regions, new to Siberia, have expanded rapidly, with a corresponding change in the overall figures (Table 3.3). In 1994 the number of partners among industrially developed states somewhat reduced and the number of partners among less-developed countries increased by 7, while their share in Siberia's export enlarged from 4 to 10%.
In 1993 Cyprus and Turkey were the leading importers of Siberian products, but in 1994 exports to South-East Asia (SEA) began to challenge that position.
Siberian exports to the so called Young Tigers of SEA is particularly encouraging. Export shipments to Singapore increased more than 1000%, to Hong Kong 400% and to South Korea - 300%. Obviously, it is not an accident that Siberia, recently awakened and aspiring to economic independence, is building strong links with the Young Tigers. They may prove to be mutually worthy partners. The liberation of local initiative, which recently was chained by a state monopoly on foreign trade, has uncovered great opportunities for Siberia in the development not only of export-import relations, but also of international economic, industrial, scientific and technical forms of co-operation.
Table 3.2
Socialist and former Socialist countries
1993 1994 1994/
mil share mil share /1993,
dollars % dollars % %
CHINA 202528 5.3 705727 10.7 348
HUNGARY 86297 2.2 129828 1.9 150
POLAND 59834 1.5 48705 0.7 81
BULGARIA 54239 1.4 26367 0.4 49
ROMANIA 30592 0.8 126539 1.9 414
MONGOLIA 23799 0.6 53104 0.8 223
NORTH
KOREA 8237 0.2 10,092 0.1 123
Total 13.4 18.7
Table 3.3
Newly Industrialized and Less-developed countries
1993 1994 1994/
mil share mil share 1993
dollars % dollars % %
CYPRUS 37 0.98 120 1.8 322
TURKEY 36 0.94 59 0.9 165
SOUTH KOREA 27 0.71 77 1.1 284
SINGAPORE 12 0.33 138 2.1 1104
HONG KONG 10 0.27 44 0.6 425
ARGENTINA 10 0.26 - -
INDIA 9 0.25 17 0.2 178
VIRGIN ISLANDS
(UK Dependency) 6 0.15 - 0
EGYPT 5 0.13 50 0.7 1001
MALTA 4 0.11 0 5
TAIWAN 4 0.1 14 0.2 351
Total 4.6 10.4