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Why Russia saves, saves money, and breakthrough no

Зачем Россия копит, копит деньги, а рывка нет

The Russian Central Bank is buying gold by the ton. Dramatically (almost to zero) decrease of investment in us government debt. This means a lack of confidence in other financial instruments or preparing for more difficult times? However, at such times, the government created funds Yes program, drew wonderful pictures of new roads and bridges. And shied away in an attempt to patch holes.

Gold is traditionally considered a tool, as expressed by the first Deputy Chairman of the Central Bank Dmitry Tulin, “a 100 percent guarantee against the legal and political risks” for the company and opens more opportunities for their hedging. Paper U.S. Treasury and as such are no longer considered. This year, the Central Bank has sharply reduced the volume of these securities in their assets with approximately $100 billion to just over $14 billion (as of the end of the summer). Because you never know what will come to mind to the American sanctioners. And gold — it is gold. Although its price may fluctuate on the market quite markedly — depending in particular from the behavior of the same proverbial dollar.

When in the world economy and especially in politics begin the difficult times, investors usually “run” either in dollars or in gold (its purchases have increased and a number of other countries). We believe in the Central Bank, the path of “flight”.

What is an indirect recognition of the fact that the Russian financial authorities against the backdrop of very tangible economic problems preparing for even worse times. Despite the lull on the sanctions front. The more that foreign investors are cautious: the Finance Ministry several times in recent weeks have experienced problems with the placement of new issues of Russian debt, the share of foreigners (fearing us sanctions against Russian government debt) decreased from over 30% early in the year to 21% in October.

Protective mechanisms — it is certainly good. But what about the economy? Because GDP growth hovering around 1%, is essentially stagnation (the US in this year of 3-4%) and an increasing backlog from the developed countries of the world. Without growth is 3-5 times higher than the current miserable level to achieve not just acceptable parameters of the pension system, but none at all of the tasks set by the President at the beginning of the current term. Where is the investment? Where the points of future growth?

Gold is not the only “pod” in case you will have to tighten their belts. In addition to sanctions from the United States, and possibly the drop in oil prices under the impact of the global recession (due to trade wars) and increase production on the part of the USA (they recently surpassed Russia by the volume of daily oil production). This year the former Reserve Fund merged into national welfare Fund. True, and so “ate” at the end of last year, the Fund was depleted to cover the deficit budget. Now, all additional oil and gas incomes of the budget will be sent to the NWF.

At the beginning of this year, the NWF amounted to approximately 3.7 trillion rubles. Part of the NWF invested in foreign financial assets. Now the NWF has already gotten to 5 trillion rubles ($75,6 billion on 1 November). This is 5.1% of GDP. In the case of exceeding the level of 7% of GDP NWF funds can be invested in the Russian economy. In case of a fall in oil prices, the Finance Ministry will be able to get funding for budget commitments.

Some believe that the ceiling is 7% too high, that the money of the Russian economy are needed now and they have nothing to “sterilize”. There are those who believe that SWFs generally harmful for the Russian economy and hampers its development. Moreover, the results of this “sterilization” is not always unambiguous. This year, the oil prices hit records. But last year the total returns of funds allocation even then existed of the Reserve Fund amounted to minus 0.10% per annum. Exactly the same rate of return and the Fund over the last year. Much lower than the “notorious” U.S. Treasury bonds, from which we came and which give about 3% per annum.

No wonder the head of the accounts chamber Aleksei Kudrin recently proposed to evaluate the assets in which the invested funds of the NWF — is it really effective these investments, as it could be? The words of Kudrin can be seen as even a veiled accusation that for some of these investments may not stand quite clear from the point of view of economic expediency of investments in certain Russian government, received preferential treatment from the authorities, but not shining in terms of its performance.

And Mr Kudrin himself was once the ideologue of the creation of the stabilization Fund, from which “grew” national welfare Fund and Reserve Fund. Now be responsible for other people — so you can criticize. And let bygones — an eye out.

As shown, filling the piggy Bank in “fat” years does not mean the flourishing infrastructure construction (or science, or health) — it is in the number of firms in a related business. To touch nothing.

And eaten the money virtually overnight. There is no doubt that “if anything” to transfer the money to the NWF for patching holes is simple — and then as God blesses.

However, the government started yet another public Fund — development Fund, which, in fact, should be a source of financing infrastructure projects. And in the budget. By 2024, it is 3.5 trillion rubles. It is expected that using it will be financed projects in the field of capital construction, transport, environment, health, education, etc. Another source of co-financing such projects can become the money of private corporations, with the government now actively working to persuade them to behave responsibly.

Thus, power is firmly on the path of predominantly public funding (in fact, project Finance) and economic development. While confidence on the part of the same Fund infrastructure investment will have time for six years to convert efficiently the key sectors of the Russian economy, no. The state bureaucracy is known for his clumsiness, paper can drive from one Department to another. Even the domestic bureaucracy is known that the best it gets “kickbacks and cuts”, but not economic breakthroughs.

Turns out all of these funds, the programs, the nest egg being created, and now officials timeservers on the principle of “money in the morning — evening chairs” and the chairs themselves even in the project yet. And with the big share of probability will not be.

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