Value-added Timber Processing in 21st Century Russia: An Economic Analysis of Forest Sector Policies

Abstract

Beginning in 2007, the Russian government implemented a series of policies, including export tariffs on roundwood, in order to develop a more competitive timber-processing sector and increase the production and export of value-added forest products. This thesis is a policy analysis of Russia's 2007 initiatives for its forest sector--principally export taxes on raw, unprocessed logs (roundwood) and subsidies for investment in value-added processing infrastructure--which shows that Russia, at least in the short-run between 2007 and 2011, is achieving its stated goal of transitioning its forest sector away from a raw-materials export model of development. Russia's continued progress in this regard depends on the efficiency of policies and the ability of federal and regional regulators to foresee changes to incentives that these policies directly or indirectly create.