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Working paper

The main vectors of cross-border development in the CIS industrial and economic space: convergence, potential, cross-country gaps

The main goal of the study is to identify the scope and trends in the manufacturing development of Russia and other countries of the Commonwealth of Independent States (CIS) in the context of integration effectiveness, industrial policies quality and competitiveness growth. Under current unfavorable conditions – the fall in world oil prices, devaluation of national currencies, and reduction of business activity due to uncertainty of future strategies – the essential issue is whether the favorable integration possibilities of the past periods of intensive rise in 2005-2008 and 2010-2012 in the national economies development in the CIS region to build competitive potential for reindustrialization were fully realized. The analyzed period 2005-2014 is presented by the authors as a reference period of economic dynamics, covering for Russia and the CIS countries a full business cycle from the beginning of one deep recession (2008-2009) until another recession (2014). The research object is manufacturing sectors in Russia and other CIS countries. The study results show that in the analyzed period, large-scale industrialization has not occurred in these countries, largely due to the lack of the national economies structural transformations. The impressive manufacturing growth in a number of smaller CIS countries has not led to those countries’ participation in the highly competitive international processes. By the end of the analyzed period, the need for diversification of the national economies and exports and implementation of balanced economic policies only intensified. These policies should support both structural reforms and demand and be aimed to increase productivity, eliminate barriers of the manufacturing development and enable foreign markets access.