To get out of stagnation: where to find sources of investment for Russia

Without a greater investment of 8-10% in the year to return the Russian economy to grow will not work

To restore economic growth after the stagnation is infinitely more difficult than after a normal crisis. Crisis gives the chance to rise. In 2008-2009 the economic downturn has affected Russia more than other countries “big twenty”. Gross domestic product fell in 2009 by 7.8% (in Japan 6.1%, UK 5%, the EU as a whole — 4%, USA 3%). Our investments decreased by 16%, in the world — two times less, that is, the crisis we had a heavier, deeper. However, after the fall we just “popped”. The industry grew by 8.2% in 2010, and in 2011 — another 5%. Turnover during the crisis fell by 5.5% in 2010 6% increase. And so in all major industries.

And after the stagnation of the restoration effect does not happen, because it is not a cyclical crisis of overproduction. It is a structural crisis, it occurs when there are powerful factors that drag the economy down. We fell into stagnation and recession in 2013 primarily due to investment. In 2013 investments will not grow in 2014 fell by 2.8% in 2015 and by another 8.4 percent in 2016 and by another 3%.

The crisis economy

This is a private case of Russia, we were stagnant. No external reason for this was not. Sanctions were imposed in the second half of 2014. While private business all these years, investments have increased, but the state dramatically reduced, and at all budget levels — Federal, regional and local. On average, the reduction of public investment was 25%. And what do the largest corporations controlled by government, such as Gazprom, Rosneft, Russian Railways, Rosatom and rostec? In General, they reduced investment in 2013-2016 30%. And state-owned banks? State-owned banks is 63% of all Bank assets (50 trillion), of which investment loan equity $ 1 trillion. They are also reduced.

This was done unconsciously, but now we are reaping the fruits. This suggests that, unfortunately, we have no common economic policy. Each branch of government does what he wants. The only thing we discussed — the Federal budget. But never not separately discussed its investment program. It is not highlighted as it was before.

Investment growth

To return to economic growth, you need to think about investing in development, economy, production, people. We offer forced to increase investment in fixed capital and investments in human. That means 8-10% per year. The only way to overcome the barriers to growth: capital outflows, decrease in exports due to the fall in oil prices, obsolete assets, ugly structure of the economy, where very few finished goods with high added value and almost no high-tech exports. Plus penalties. All this is impossible to cover with growth investment 2% per year. To increase GDP by 1%, in our country it is necessary to increase investment by 3%.

First and foremost, they must be directed to technological upgrading of existing production. For example, in the production of electricity and heating, our energy system is nothing burns 65 billion cubic meters of gas. We need to decommission old power plants and building combined-cycle plants, which have 60-65% efficiency is 30-35% for conventional thermal power plants. And such examples can lead to many industries. It is especially important to introduce new facilities in high-tech industries, to create a modern transport and logistics infrastructure and to double the housing construction.

Where to get the money?

Assets of the Russian banking system amount to 80 trillion And our gross domestic product — 86 trillion of total assets of banks investments in fixed capital — by 1.1%, investment in human capital (education loans) — about 500 million rubles. Almost nothing! The share of investment loans in total investment in developed countries is 30-40%, in developing — 15-20%, and in Russia — 5,9%! They can increase 3-5 times, and to abandon a balanced budget that holds Minfi, which reduces the cost to income using the Reserve Fund. According to EU regulations safe level of deficit — 3% of GDP. Our country is 2.5 trillion RUB. For comparison, only to have none of the citizens lived below the subsistence level, need 700 billion rubles Deficit, moreover, allows to develop the securities market. It is a reliable paper under the responsibility of the state and for a long period. Here is the source of long money in the economy.

In investments you can borrow funds from foreign exchange reserves: we have about $400 billion. They don’t work, but devalued due to exchange rate fluctuations: according to the Central Bank, in 2013, we lost $24.5 billion in 2014 and 2015 — by $19 billion, I suggest the $400 billion reserves to keep the $300 billion as a safety reserve and $100 billion to take 15-20 billion and lend (subject to a payback in five to seven years) technological renewal of the existing production.

In addition, it is necessary to exempt from tax the portion of profits that companies direct investment. Then part of the profits will come out of the shadows, and companies will receive incentives for development. According to my calculations, they will increase investments to 1 trillion roubles a year. Those enterprises which belong to the state, but no state functions do not perform, but pay high wages and climb in the budget for help, you just have to sell. Revenues from privatization also needs to be turned into an investment loan. If all this is not enough, our state can begin to borrow money in the external market. Now the Russian government should foreign investors roughly 3% of GDP, which is much less than the level of debt in many developed countries. If need be, Russia without any problems for themselves could take to $500 billion, so that investment is sufficient, we need only the will to dare and to act.

The authors ‘ point of view, articles which are published in the section “Opinions” may not coincide with ideas of editorial.

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