Following the stagnation of the Russian economy, a new market emerged. By the time parallel import was legalized by Mr Putin in August 2022, the unregulated market had already reached its all-time high. The Russian black market soared immediately after the sanctions against Russia were executed. Most of the local businesses managed to maintain growth through unregulated imports of a wide variety of goods.
Similar to the second economy of the Soviet Union, Russian parallel import is flexible enough to meet the needs of the population and keep the prices stable. Anything - from a brand-new PS5s to napkins can be found in trucks’ containers. Most common trade routes - go through Russian borders with Kazakhstan and Georgia. Luxury car parts - are constantly in demand. Prices for the original car parts made by Mercedes, Lexus and Jaguar spiked.
Before the war, unlike cheaper brands, they were ordered upon request rather than kept in storage. Deficit of such goods presented new opportunities for individual entrepreneurs with access to neighboring markets, causing thousands of loaded trucks to flow in and out of Russia.
At first sight, unregulated, and thus, untaxed trade does not benefit the Russian Government in any way. However, the perspective shifts once the volume of the parallel import is compared to humbling daily revenues from the natural gas trade. It is far more reasonable to suggest that an unregulated market serves a more significant purpose for the authorities. Despite the ideological campaign against the West, the Authorities understand the importance of comfort for the population.
Parallel import is, essentially, the only way to keep commodities on the shelves. Maintaining a pre-war lifestyle helps to contain the level of unrest below a certain point. Surprisingly, the population is extremely sensitive to any changes in the market. A week-long absence of sugar on the shelves of a local grocery store bugs even the most ideologically-inspired patriots. Fear of breakage of an irreplaceable car part makes a Russian Roulette game out of a routine commute to work.
Better Together Foundation