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Russia: St Petersburg Joins Buy Russian Movement

St. Petersburg, 21 July 1998 (RFE/RL) -- Last week (July 18) representatives of St. Petersburg's leading industrial enterprises met to join a national movement, "Buy Russian Goods," which strives to instill "consumer patriotism" in Russians.

The meeting criticized the Russian government's monetary policies as having hampered Russian industry, and called for a new economic strategy with emphasis on 'consumer patriotism'--- not so much in "actual economic policy as in economic thinking."

Deputy Prime Minister Boris Nemtsov was on hand to officially sanction the movement and promised the government's support to Russia's business leaders. Last February Nemtsov inaugurated the "Buy Russian" association, which is designed to support domestic producers and fund a multi-million dollar advertising program.

At that time, some of the successful Russian food and beverage companies backed the program, including the popular St. Petersburg brewery Baltika and the Red October Chocolate Factory.

"This is an important day in the history of St. Petersburg, and maybe Russia," said Nemtsov. "Today, Russian industry is banding together to help each other amid the current difficult economic circumstances."

Nemtsov then said that the he government is to launch a policy of "reasonable protectionism," saying that Russia needs to avoid the "extreme" of the Soviet period, when the Iron Curtain kept all foreign goods out, and the current "extreme," demanding that the government dismantle all barriers to foreign goods.

Still, Nemtsov criticized protectionism as such. In his own words, "protectionism is both a blow to our people, who would have to bear the burden of expensive goods, as well as a blow to our industry which would stagnate if not forced to compete."

Roland Nash, an economist at MFK-Renaissance, a Moscow investment bank, told RFE/RL that any protectionist measures would be a "step back for reform," forcing the consumer to pay more and doing a disservice to industry, depriving them of the stimulus to be competitive.

So far, the Kiriyenko government has not enacted any protectionist measures, instead pushing for greater competition in the economy

Kiriyenko wants to kick start the economy and he has chosen the path toward macro-economic stability on the financial front, restructuring the tax system, going after the natural monopolies, and attacking non-payments of taxes.

St. Petersburg vice-governor Ilya Klebanov, who heads the Committee for Economics and Industrial Policy, also attended the "Buy Russian Goods" meeting. An avowed liberal he challenged local business leaders to streamline.

"Industry needs to restructure and orient itself on the market in order to become profitable," was Klebanov's main message.

A number of representatives from local industry expressed their anger at the poor showing of Russian goods against foreign competition. But the problem of quality seemed to be secondary.

The Buy Russian Goods movement looks to Tsarist-era Minister of Finance, Sergei Witte, for inspiration. In one of their declarations they quote Witte as saying it would be a great mistake to open the country to foreign goods.

Witte's protectionist policies did make Russia one of the world's fastest growing economy before the First World War.

Still the new Buy Russian movement invited skepticism from some people. One woman who wished not to be identified told RFE/RL that over the years a large number of industrial associations have been formed to advance their common interests. Few have had success.

"Until this latest one actually gets something done, I will remains a skeptic," she said.