Sales markets for the goods of the regions of the northwest of Russia: quantitative assessment

The agenda related to the transformation of intra-country value chains (VCs) is becoming more relevant due to the increasing regionalization of global trade. A tangible impetus to the activation of this direction was the disruption of value chains at the beginning of the coronavirus pandemic, when the shutdown of production and the closure of the borders of major countries led to the collapse of the usual economic ties and aggravated the relations between traditional partners. Thus, due to a tenfold increase in the cost of sea freight transport services in 2020–2021, competitive advantage was gained by suppliers offering products in geographical proximity to the buyer1.

The decline in the stability of trade relations has forced governments to overestimate the acceptable level of openness of their own economies. As V.A. Mau points out, the governments of major economies “clearly have a reduced willingness to pay for market efficiency with economic (and, consequently, political) security” (Mau, 2021).

The catalyst for the aggravation was the growing political rivalry between the United States and China, which quickly turned from trade negotiations to conflicts on the “economic front”. At the same time, the steps taken by the largest players in the world markets do not make the situation more stable. So, in 2020, a series of mutual conflicts between the United States and China resulted in the introduction of a number of mutual duties. One of the consequences of the tension on world markets was the official statement on the reorientation of the Chinese economy to the domestic market (Zhu, 2020). A new model of China’s economic development will focus on increasing consumption in the domestic market while simultaneously focusing on attracting foreign investment and stabilizing international trade. The main idea behind the development of the 14th five-year socio-economic development plan is the concept of “double circulation”: internal and external. At the same time, internal circulation is declared as the main one and implies the development of national supply and demand production chains. In the long term this strategy is aimed at eliminating the dependence of the Chinese economy on foreign markets and technologies2.

For the Russian economy, the development of production chains in the regions through the use of their cooperative potential is also a vital task. When relying on the export of raw materials and semifinished products and the import of final products, an important point is the loss of potential income from products that could have been produced on the Russian territory. As a result, the domestic market is developing more slowly; while in the latest market research conducted by Rosstat, business representatives note that the main (after the “uncertainty of the economic situation” sharply increased at the end of 2021) limiting factor in the growth of production activity is the very lack of more powerful domestic demand as a strategic resource that would give domestic entrepreneurs confidence3.

At the same time, the authorities are also interested in this topic, as evidenced by the coverage of the importance of production chains for the development of the domestic market in the Consolidated Strategy for the Development of the manufacturing industry of the Russian Federation4 (“In the field of consumer goods, we should focus on ensuring effective demand, both domestic and external”). We should also note that the fact that the Strategy consolidates the access to adjacent stages of production chains as a general principle of industrial development implies an increase in the potential of intra-country cooperation.

One of the drivers of the policy of mobilizing the spatial factor of national economic development in the Spatial Development Strategy of the Russian Federation5 is the division of the country’s economic space into macroregions (Minakir et al., 2020). The need to allocate macroregions increases when the potential of individual subjects is very small to solve certain tasks and it is necessary to consider their potential together and in a broader context (Kotov, 2021).

Within the framework of macroregions, it is planned to strengthen interregional cooperation and coordination of socio-economic development of RF constituent entities, the development of transport, energy, information and telecommunications infrastructure that will strengthen economic connectivity of territories, the completion of value chains, including through the implementation of large interregional investment projects. This, in turn, will require the development of strategies for socio-economic development of macroregions and plans for their implementation synchronized in time and space.

The national economic space in the Strategy is divided into 12 macroregions. The grid is based on federal districts, four of which in terms of territorial composition exactly coincide with the corresponding macroregions, and each of the other four is divided into two macroregions (Tab. 1) .

Table 1. Composition of macroregions of the Russian Federation

Source: Spatial Development Strategy of the Russian Federation for the period up to 2025.

In our work, we rely on the fact that in the RF Spatial Development Strategy, one of the main directions of the country’s spatial development is stated to strengthen interregional cooperation and coordination of socio-economic development of subjects within macroregions. The purpose of the study is a quantitative assessment of the sales markets of regions of the Northwest of Russia, taking into account the industry and territorial specifics of production. At this stage, based on the materials of the regions of the Northwest of Russia, we provide the characteristics of interregional interactions within the macroregion.

There are two macroregions on the territory of the Northwest of Russia – the Northwestern macroregion, including the Republic of Karelia, Kaliningrad, Vologda, Leningrad, Murmansk, Novgorod, Pskov oblasts, the city of Saint Petersburg, and the Northern macroregion, including the Komi Republic, Arkhangelsk Oblast, Nenets Autonomous Okrug. Due to the historical interconnectedness of the Northern and Northwestern macroregions, we consider them jointly as the Northwest of Russia.