Aktia: Finland losing ground in exporting into Russia

Finnish exporters lack products that would interest prosperous Russians

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The Finnish export industries are losing ground in competition for the rapidly expanding Russian markets.
      Finland has signally failed to follow Germany and the entire euro area in increasing its exports into Russia.
     
Currently Russian import trade is growing at the rate of 25-30 percent per year, while the growth rate of Finland’s exports into its eastern neighbour is more or less at a standstill with a meagre 3% annual increase.
      "We can no longer rely on exports into Russia", chief economist Timo Tyrväinen from the Aktia savings bank warned on Tuesday.
      Tyrväinen is of the opinion that Finland lacks products that would interest Russian consumers.
      The prosperous new Russians are now interested in cars and other branded articles from the West, such as French wines and cheeses or Italian marble.
      While there is still demand for Finnish machinery and equipment in Russia, overall Finland’s export range is too stodgy for today’s Russian consumers.
     
Not too long ago it still seemed as if Finland’s exporting into Russia was in synch with Russia’s growing import figures. This, however, quickly proved a false notion.
      Finland sold to Russia mobile phones that had been manufactured in Eastern Europe. Although Finland’s exports of mobile handsets into Russia looked good in the statistics, the sales did little to promote the domestic labour market.
     
According to Tyrväinen, what is alarming is that Finland has completely failed to utilise, for instance, the vast growing markets of the St. Petersburg area on its doorstep. The problem lies not so much with Finland’s competitiveness as with its production structure.
      Last year Russia’s stake of all Finnish exports was around ten percent, against Germany’s 11.3 percent and Sweden’s 10.5 percent. Finnish exports into both Germany and Sweden are growing vigorously.


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