At the end of the issue

City of Master Craftsmen

Jan Strugach,
economic analyst

        One of the first and clearest results of Russian economic reforms is the change in commodity and finance flows of the country's external and internal markets. Home producers as well as Russian population in general suddenly received the opportunity to actively participate in various operations concerning trading activity. Of course, in the previous years there was paid much attention to such burning problems as the growth of exports for increasing the country's foreign currency reserves and replenishment of the internal market with imported consumer goods. But those efforts were not a great success, and only after the liberalization of foreign trade and reforms in economy the situation changed for the best. But finally the economic situation became very complicated.
        The country's foreign trade began developing on a new legal base. At the same time, a setback in production and financial stress, together with financial crises and political instability, exert a negative influence upon Russia's relations with foreign businesspeople. Nevertheless there is a principle that stays invariable, namely the principle of mutual benefit, because no business cooperation is possible without it. This principle, as well as the opportunities of its realization, is spoken about almost in every article of our issue.
        Taking this into consideration, we may see many specific features of Petersburg's economy, for example, the increase in the exports of raw materials, and the great interest that foreign business circles are taking in Russian extraction of raw materials. But as for Petersburg's industry, it is based on finished science-intensive products, and not on raw materials. A setback in production seriously damaged the city's light industry, and its textile industry in particular. The latter was supplying a great mass of commodities providing significant payments to the budget. Our city is naturally taking great interest in the fields of foreign economic activity that enable it to solve its problems thus gaining certain profits. Foreign businesspeople are taking interest in our region for it is an extensive sales area for the sale of durable goods, convenience goods, and food products. It is also a market supplying inexpensive labour force and providing the opportunities for profitable investment of money. That is the reason for our having a lot of interests in common. Petersburg's relations with the rest of the world take shape of various joint ventures and joint stock companies using foreign investments that have been created in Petersburg during the last years, and also the signing of various contracts on export-import operations, realization of long-term projects, and establishment of international cultural links. The results of these undertakings are of great importance for Petersburg because they consist not only in the rise in the turnover, joint ventures, and other benefits. They also result in a certain change in the way of life. Petersburg's export structure is headed by machine building (it makes up almost 50 percent). Ferrous and nonferrous metals also make up a significant share of exports (21 percent). The major part of Petersburg's exports in 1999 was received by Belgium, the US, and Finland. For the same period the structure of Petersburg's imports consisted of food products (51 percent), machine building products (22 percent), and oil products (10 percent). After the August crisis of 1998 imports reduced almost two fold, but today's stabilization of Russia's economy has already resulted in the increase of imports.
        The fact that Petersburg's machine building is gradually turning into the main export item and its products are being purchased by the most technically developed countries of the West, is of really great importance. We may see that our city's enterprises are step by step occupying the market niche earmarked for top-quality products. This rises the authority of our national products and strengthens their position in the market. More and more enterprises are getting international quality certificates with the purpose of obtaining equal rights with worldly recognized companies. This way Petersburg, the city of scientists and engineers, the city of advanced technologies and rich culture, that is, the city of master craftsmen, steps forward into the world market.