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. Last Updated: 07/27/2016

INSIDE RUSSIA: Moscow Must Defend Steel, Not Poor Serbs




While the State Duma was passing a budget that includes "support for the export of high technology products" and other measures dear to the hearts of the defenders of industry, the United States was virtually closing Russian metallurgy's access to its market. This year, Russian steel imports will be limited to 345,000 tons, as opposed to 3 million tons in 1998. If these limitations are exceeded, Russian metal producers are threatened with anti-dumping duties up to 217 percent of the price of rolled steel.


Much of the steel exported by the Novolipetsk, Cherepovetsk and Magnitogorsk metals factories goes to the United States - and the sad situation with payments on the Russian domestic market is well-known. This means not just the closing of the American market but death to Russian metallurgy.


One can understand the Americans. They are defending their industry, and they are doing so with the same methods white Anglo-Saxons have always used in defending their property from wild Indians with poisoned arrows.


But one cannot understand the Russian government. Instead of defending the Serbs or those scientific institutes that are cooperating with Iran, Prime Minister Yevgeny Primakov should be opening every discussion with the West with the question of steel. That would be true defense of domestic industry. But that's not what they think in the Russian White House. Asked about it, one of the remaining liberals replied with surprise. "What do you want?" he asked. "Institutes are a matter for the state. But metallurgy is a matter for private capital."


True, the state-owned nuclear institutes are run by solid people, many of them personally acquainted with Primakov. And these metals men, who are they? Unknown and mysterious personalities, who in the difficult years of privatization pushed aside the old "red directors." Viktor Rashnikov of Magnitogorsk and Vladimir Lisin of Lipetsk are both just over 40 years old, while the capitalist Alexei Mordashev, who personally owns 75 percent of the shares of Severstal, is only 33.


These directors, with iron grips and commercial shamelessness of young Rockefellers, have succeeded in radically restructuring their factories. They have lowered costs, minimized the tax burden and as a result achieved major advantages over their American colleagues. Lipetsk or Cherepovets makes for one of the few "success stories."


Now it turns out that it is success we punish.There is a sad hypothesis to explain this sad lack of interest in defending Russian steel. Stubborn rumors have long been making the rounds that the passivity of our government in defending the interests of the metallurgy sector has been generously purchased with the possibility of earning enormous money from machinations with incoming American food aid. To check such rumors, I turned to Deputy Prime Minister Gennady Kulik himself, the Russian official in charge of the aid negotiations. Kulik, naturally, offered a categorical denial.


But however you explain them, the facts remain. The patriotic government consistently angers the Americans with its pointless political proclamations, but as soon as matters turn to Russia's concrete commercial interests, our brave lobbyists suddenly becoming surprisingly internationalist in outlook.


Yulia Latynina is a correspondent for Expert magazine.