According to Alexander Shirov, the director of the National Institute of Economic Forecasting at the Russian Academy of Sciences, advancing import substitution without regard to efficiency can inflict greater harm on the national economy than an extended arms competition. He argues that expanding the import of strategically essential goods, including medicines and other critical supplies from abroad, could help preserve roughly five percent of the country’s total GDP. His remarks were reported by Argumenty i Fakty and cited in the April 5 edition of RBC, underscoring a nuanced view on how Russia might balance self-sufficiency with the benefits of international trade as part of a broader economic strategy.
Shirov emphasizes that the harms from weakly implemented import substitution could exceed the consequences of an arms race, particularly when it comes to items vital for public health and everyday life. He highlights medicines and other core necessities as areas where domestic production cannot yet fully guarantee security or accessibility. In his assessment, these critical sectors constitute about five percent of the nation’s economy, a share that warrants careful protection and strategic planning regardless of market pressures or geopolitical tensions. The key message is clear: self-sufficiency should not come at the expense of reliability or affordability for the populace.
Beyond those essential goods, Shirov calls for a pragmatic approach to domestic production, advocating that other products be manufactured under favorable conditions within Russia while still leveraging high-quality imports when they add value. The overarching aim is to harmonize efficient local manufacturing with well-considered foreign sourcing, ensuring that the domestic market remains competitive and resilient. This balanced view underscores the importance of maintaining secure supply chains, modernizing production capacity, and sustaining access to critical goods even in periods of disruption or sanctions.
Shirov also points to the strategic potential of imports as a policy tool when used judiciously. He argues that imported goods can act as a catalyst for economic stability and growth, provided the government carefully calibrates tariffs, logistics, and quality controls. The broader implication is that openness, combined with targeted protection of vital sectors, can support steady economic development rather than provoke unnecessary volatility.
Illustrating the potential consequences of sanctions, RBC’s April 5 report, drawing on research from the Nizhny Novgorod branch of the Higher School of Economics and the university’s Department of Applied Economics, notes that a halt in plastics supply could ripple through sectors responsible for goods with value equivalent to approximately 14 percent of 2021 GDP. In monetary terms, the estimated annual loss could range from 251 to 257.2 billion dollars, or 18 to 18.4 trillion rubles. The figures emphasize the delicate balance between maintaining a robust domestic base and engaging with international markets, especially in industries where substitution options are limited and the timing of supply is critical.