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“We actually gave half of the reserves to the West. Or we could invest in ourselves”: Where is Russia now to store budget revenues

The Ministry of Finance and the Central Bank believe that Russia should not only have a nest egg, but it must certainly be large.

The Ministry of Finance and the Central Bank believe that Russia should not only have a nest egg, but it must certainly be large.

A photo: Mikhail FROLOV

Ask any financial adviser, and he will say: “You should always save.” Another thing is what exactly and how much will be enough. The Ministry of Finance and the Central Bank believe that Russia should not only have a nest egg, but it must certainly be large. And it played a cruel joke on us. In the spring, the West took away half of the deferred international reserves – $ 300 billion. Where is it better to keep money now?

From October 1, a new budget rule should work in Russia. Its essence is that the surplus of our income will be set aside in yuan. This will allow both saving money and stabilizing the ruble exchange rate. It is now too strong, which negatively affects budget revenues.

But some experts have doubts due to the limited convertibility of this currency. What to do? Alternatively, look at the experience of other countries.

INVESTING IN NORWEGIAN: IN EVERYTHING AND AT ONCE

This is probably the closest example to us. The Scandinavian country also lives on the profits from the sale of oil and gas. In the current conditions, her income has even grown, and at times. But where do the wise Norwegians invest their profits? It turns out in securities all over the world. The fund owns about 1.5% of all global companies.

The fund is considered conservative. After all, he must ensure a prosperous future for Norwegian pensioners. However, in reality, fund managers are actively buying up not only bonds (that is, fixed-income securities with the least risk), but also technology stocks (Apple, Amazon, and even Tesla).

On the one hand, such a strategy has led to the fact that the size of the fund has grown several times over the past ten years. This was helped by the financial policy of the United States, where they actively subsidized their own economy and inflated the bubble in the stock market. On the other hand, Norwegians are now paying on deferred accounts: if at the beginning of the year the size of the fund was $1.4 trillion, now, due to the fall in the value of many shares, it has decreased by 20% to $1.15 trillion.

– In the Western markets, everything is quite clear. They will fall. And the worst is yet to come, – explains Mikhail Korolyuk, head of the trust management department of IFC Solid.

The reason was obvious to many experts a few years ago. There was a huge bubble on the American stock exchange. Now he is deflated. And this process is actively assisted by the monetary policy of the United States, which raise the discount rate in an attempt to combat rising inflation. But the side effect will be the bankruptcy of many companies whose activities were directly dependent on cheap loans.

THE GERMAN WAY: WE BUILD FACTORIES – YOU HAVE A PERCENTAGE

It’s not just resource-rich states like Russia, Norway, and the Arab countries that can save surpluses. Technologically advanced countries also often have a positive trade balance. One of them is Germany, which uses available funds to buy assets around the world. In Poland and other Eastern European countries, Germans own businesses, retail chains and local media. So Germany receives from its investments both commercial profits and social and political influence.

“An analogue of this German path for Russia would be to buy up all the countries of the former USSR. The same soft power. Businesses, local media, local parties and local politicians would benefit from this investment. And they would also receive their 5% of these investments, plus the whole post-Soviet life was entirely dependent on Russia, ”experts of the Interpreter telegram channel reflect.

In other words, it was worth investing money not in the West, but closer to home. But whether it should be done now is a big question.

– There are more pressing needs. In particular, import substitution in various areas, especially technological ones. For the next few years, this will absorb any allocated money, – Mikhail Korolyuk believes. – And it would be strange to invest abroad now. First, it is unlikely to be effective in the current conditions. Secondly, now there are acute screaming needs.

What is the best way to store the state stash and what to do with it so as not to lose it again.

What is the best way to store the state stash and what to do with it so as not to lose it again.

A photo: Ekaterina MARTINOVICH

CHINESE LITERATURE: WE WILL GIVE MONEY AND WE WILL BRING WORKERS

Another example of a global investor is China. This country has the largest export earnings. At the same time, the Celestial Empire is accumulating international reserves (there is more than $3 trillion in stash, including in US government bonds), and is actively entering foreign economies. For example, it invests in many Asian, African and even Latin American countries.

The method is extremely effective. For example, a Chinese company wins a tender for the construction of roads or other infrastructure. A Chinese bank issues a loan for this, the workers come from China, the materials are also from there. That is, the country not only earns interest on the loan, but also provides jobs for its citizens at the expense of other countries.

In addition, the Chinese are actively buying up companies around the world. But they are not interested in small portfolios, but in control ones. For example, the famous Swedish brand Volvo has been owned by the Chinese for 12 years. And there are hundreds of such examples.

By the way, Russia also followed this path. Rosatom is building nuclear power plants abroad according to this scheme. And they give credit to the buyer, and they build it themselves (albeit with the involvement of local workers). Contracts – for tens of billions of dollars. True, this is only a single example of an industry where we have undeniable competitive advantages. But we have not been allowed to buy well-known brands for a long time. Recall at least the failed deal to buy Opel in 2011.

INSTEAD OF AFTERWORD

“Missed Opportunities”

– The big difference between public finance and private finance is that in the former there is no ultimate goal to increase the amount of funds. There is a goal to make sure that the budget and reserves help to fulfill the strategic goals of the country in the event of various scenarios. Therefore, international experience here cannot be transferred directly, – says Yegor Krivosheya, head of the blockchain and fintech laboratory at the Skolkovo Management School.

According to him, long-term investment should be based on the country’s development strategy. Therefore, national projects can serve as a guide: innovative projects in the field of digitalization, support for small and medium-sized businesses, education and other areas.

– We actually spent half of the reserves, gave them to the West. Or you could invest that money in yourself. For example, it is more active to build the same BAM-2. These are missed opportunities, – states Mikhail Korolyuk.

In his opinion, now it is necessary to invest more actively in the expansion of transport corridors – to the east and south. And it is enough to keep $150 billion in the stash.

True, the other day, Prime Minister Mikhail Mishustin said that in this and in the coming years we will not have a surplus, but a budget deficit of trillions of rubles. Therefore, we will not be able to save physically. And the question will rise differently: spend the stash or cut costs? And these are completely different scenarios.

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