MIL OSI Translation. Region: Russian Federation –
What is non-commodity non-energy export and how the city helps enterprises enter new markets – in the continuation of the series of publications “Moscow Economy in Plain Language”.
Goods made in Moscow are exported to 183 countries. They sell a wide variety of products abroad: from ice cream and cosmetics to optics and medical equipment. Moscow continues to increase exports, which generally has a positive effect on the capital’s economy and gives companies an incentive to develop.
What is export, what goods are sold by the capital’s enterprises to other countries, and how Moscow supports exporters – in the continuation of the series of publications “Moscow Economy in Plain Language”.
Understand the export
Export (from the Latin exporto – “I take out”) for centuries helped states in solving two problems. Thus, goods produced in large quantities could be sold to neighboring countries and purchased from them what they themselves did not produce. For example, Ancient Russia exported wax, honey, furs, bread and leather, and imported fabrics, precious metals, dyes, spices and incense.
Today, exports are a driver of economic development, and many countries are trying to support companies that present their products abroad. The one who exports more is in a winning position – both companies and city budgets. Moreover, the development of export industries stimulates the introduction of advanced technologies and contributes to the creation of jobs.
Export goods are usually divided into two main groups: raw and non-commodity. Raw materials include natural materials (mineral fuels, wood, minerals), as well as secondary waste, such as scrap metal and waste paper. To non-resource – everything that is created with the participation of man. They, in turn, are also divided into two categories: energy products (petroleum products and other types of processed fuel) and electricity, as well as non-energy products (starting from grain and butter and ending with more complex ones – household chemicals, pharmaceutical products and cheeses).
Moscow on the counter: from pharmaceuticals to mechanical engineering
Moscow’s economy is oriented towards the export of manufactured goods. In January-October 2021, non-resource non-energy exports (NOE) of the capital amounted to $ 26.59 billion – compared to the same period in 2020, it increased by 29.5 percent.
Moscow leads among Russian cities, accounting for 17.5 percent of the NOE of the entire country. Almost 13,000 exporting enterprises operate in the capital.
Among the largest buyers of Moscow enterprises (excluding the fuel and energy complex) are the UK, the USA, Belarus, Kazakhstan, Germany, China and Japan. Mechanical and medical equipment, electrical devices, plastics, cosmetics and components for automotive equipment produced in Moscow turned out to be competitive in other countries.
Almost a third of non-commodity exports – 31 percent – are engineering goods, including aircraft and ground vehicles. For example, farmer drones from a resident of the Skolkovo technopark help in monitoring farmland. They are delivered to Vietnam, India, Indonesia, Kazakhstan and Uzbekistan. Unmanned aerial vehicles made in Moscow will help to carry out an inventory in warehouses many times faster and more accurately than a person. They have already been appreciated in the countries of the Near and Middle East.
Products of the chemical industry (plastics, rubber, fertilizers) account for about 11 percent of exports, while products of the food and processing industries account for almost 17 percent. Moscow enterprises also sell shoes, textiles and textile products abroad.
Low-voltage electrical distribution devices, radar and telecommunications equipment manufactured in the capital are also in high demand. For example, the Zelenograd research and production enterprise produces equipment for radiation monitoring. The company exports dosimeters and other devices to more than 50 countries, including France, Latvia, Greece, China and Turkey.
The structure of Moscow’s exports was also affected by the COVID-19 pandemic: the demand for medical products and devices manufactured in the capital has grown significantly. Reagents for PCR diagnostics produced by a resident Technopark “Caliber”, allow you to detect many diseases, including coronavirus. And with their help, you can control the quality of agricultural products. The company supplies its reagents to the USA, Australia, Israel and Spain. And a resident of the Otradnoye technopark has launched the production of bactericidal irradiators-recirculators. They are purchased by Germany, the Netherlands and Ukraine.
More than 600 million rubles of support and search for new customers
Moscow seeks to increase the share of exports of manufactured goods. To this end, a whole system of measures to support industrial enterprises, including export-oriented ones, has been created in the capital. Thus, new and existing industries can receive tax incentives, land plots for rent without tenders and subsidies to cover part of investment costs. The saved funds of the company are invested in their development.
In 2021, Moscow once again expanded targeted export support, the so-called export cashback. Already operating exporters could receive up to 12.5 million rubles of subsidies for reimbursement of export costs or a grant for the development of export activities if there was a contract for more than six million rubles. In 2021, the total amount of subsidies and grants to capital exporters increased by another 30 percent compared to 2020 and amounted to 634 million rubles.
In addition, the city helps enterprises find foreign customers, organize virtual tours of their production facilities, buyer events and b2b meetings with potential buyers.
For example, at the center for support and development of exports “Mosprom” since 2019, the buyer program has been operating. It helps capital companies to enter new markets and increase export performance. In 2021, Mosprom specialists organized participation in 14 business missions and 10 international exhibitions for 127 companies, and also helped to hold more than 1.6 thousand b2b meetings. Buyer events took place in Latin America, the Middle East, Europe, East Asia and Africa.
Thanks to Mosprom’s programs, Moscow companies last year signed contracts for the supply of products abroad for more than $750 million. This is 30 percent more than in 2020.
In the promotion of capital companies on the international market, it also helps Moscow Export Center (MEC). It operates as a one-stop shop to provide financial and non-financial support to export-oriented companies.
For example, last year, thanks to the MEC and the Made in Moscow project it has been implementing since 2016, companies from the capital presented their products at several international exhibitions. Among them are Gitex and The Big 5 in Dubai (UAE), FoodExpo Qazaqstan in Alma-Ata (Kazakhstan) and Medica in Dusseldorf (Germany). All expenses for participation in business meetings were covered by the IEC. In addition, the center organized 40 business missions and 11 streams of acceleration programs. Also, metropolitan companies had access to online export support on more than 90 electronic platforms.
Thanks to these measures, Moscow is able to achieve a noticeable increase in exports. Moreover, non-commodity exports are growing faster than exports in general. So, if the cost of all Moscow exports increased by 29.5 percent in January-October last year compared to the same period in 2020, then the main group of engineering goods for the capital saw an increase of 45.9 percent.
EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.