Russian Manufacturing Industry in the Mirror of its Exports to the European Union

The purpose of this study is to shed some light on structural changes in the manufacturing industry of Russia and eight other transition countries during the last decade. The export performance of countries in one and the same market can under certain conditions be used to compare the state of the art in national industries. On the basis of full and comparable trade data from Eurostat, we perform comparative analysis of the development of manufacturing exports to the European Union by Russia and eight other transition countries over the period 1993-2000. The transition countries selected for comparison are Hungary, the Czech Republic, Poland, Romania, Bulgaria, Estonia, Latvia, and Ukraine. For all these countries, as well as for Russia, the European Union is the most important trade partner. The paper provides a comparative analysis of the breakdown of manufacturing exports by factor intensities, export concentration and specialisation, and relative price positions in the European market. All these approaches give a rather unfavourable picture of Russia's performance. We observe a relative shrinking in exports of labour-intensive, specialised-supplier and science-based sectors. At the same time the role of the sector based on natural resources, which was traditionally predominant in Russia's exports, is strengthening further. We also observe an alarmingly high level of concentration in Russia's manufacturing exports and their growing specialisation in base metals, together with an intense de-specialisation in engineering products