Russia Spending Billions on National Digital Economic Development Programs
Russia’s digital economy development national program is to be funded by over 1.8 trillion rubles (US$26.2 billion) over the next five years, according to Russian Prime Minister Dmitry Medvedev last week.
“The estimated amount of funding for 2019-2024 for the national digital economy development program will exceed 1.8 trillion rubles, of which more than a trillion are funds from the federal budget,” said Medvedev at the meeting of the government commission on digital development, and using information technology to improve the quality of life and business conditions.
Since the imposition of sanctions, Moscow has been looking at ways to diversify its economy away from reliance upon Europe, and in fact, to be more competitive with it. Russian businesses are now encouraging EU businesses facing sanctions difficulties with accessing the Russia market to directly establish operations in Russia, which has had some success the past two years, and especially in the agricultural sector. Russian businesses are also looking at developing new markets elsewhere, with Egypt opening a Russian free trade zone near Port Said and India suggesting a similar zone, apparently within the Mumbai area.
A further development is internally, with investment in the new opportunities presented by 5G technologies, blockchain and other crypto-mechanisms. Russia is already well ahead of the EU in developing 5G networks in many of its major cities, with 80 percent of the entire population expected to be covered by 2025.
The development of China’s Belt and Road Initiative has also spurred on technological developments in blockchain technologies between China and Russia. This is because the Russian landmass essentially sits between China and the EU, meaning the country is set to develop a massive transshipment infrastructure over the next decade and beyond. Blockchain technologies can be useful for example in handling customs and shipping procedures across the Eurasian Economic Union.
“The recent Shanghai Infoforum saw China and Russia agree to develop new digital technologies” says Chris Devonshire-Ellis of Dezan Shira & Associates, and this has been further underlined by Moscow devoting significant Government expenditure into these new tools and capabilities. Russia is already taking a lead over Europe in these technologies and businesses in the EU should be looking at what is happening in Russia to keep themselves informed and able to participate.”
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