S. Sorokina- I greet you. Good evening. I am Svetlana Sorokina. Today without Yuri Kobaladze. Who is resting. If he hears, then hello to him. I present my guests: Vladimir Nazarov, director of the research financial institution under the Ministry of Finance of Russia. We saw each other recently and scared us about the upcoming pension changes. Let's talk today. And Nikolai Petrov, political scientist, professor of the Department of Political Science High school economy. They called it without any fuss: what threatens exhaustion Reserve Fund. The fact is that a study by the HSE Development Center was just published, I think yesterday, and they said that the crisis of the Russian economy in the first half of the year only intensified based on the results of everything they summarized. And that the Reserve Fund may be exhausted before the end of this year. The reserve fund is a state nest egg that helps in case of a severe budget deficit. It is said that by the end of this year, not in 2017 as the Ministry of Finance predicted, this fund will run out. Why is this bad, how bad is it, what are the options for getting out of the situation - let's talk about it. Firstly, I wanted to ask Vladimir Nazarov, who at the Ministry of Finance, Volodya, please tell me, have you read the study.

V. Nazarov- Yes.

S. Sorokina- Do you agree with everything or maybe there are some disagreements?

V. Nazarov- In principle, we can agree with everything, only we can find fault with the details. We have constant discussions about whether the bottom has been found.

S. Sorokina- I think we’ve already passed several times.

V. Nazarov- The Ministry of Economic Development is still looking for him. It is clear that the economy is still in recession. It is clear that, most likely, we did not find the bottom. But on the other hand, there is no drama that yes, the decline is slowing down. That is, we are all falling, but more and more slowly. And in principle, this year the rate of decline of our economy will be less than 1%. It's unpleasant, but it's not a disaster. There are more unpleasant things, for example, construction has decreased by 10%. This is one of the indirect indicators that investments in the country are not at all important. Really bad. And this tells us that low rates are also expected in the future. economic growth. But there is no drama here yet. Regarding the budget, I would not agree with them; after all, we, as the Ministry of Finance, still insist that the Reserve Fund will be depleted next year. Not this.

S. Sorokina- That is, not in December of this, but in January of next.

V. Nazarov- Maybe a quarter or even six months. In my opinion, by the end of this year there will be about 600 billion left there, unless there is a strong drop in oil prices, other emergency situations. If everything continues as it continues, then it seems to me that colleagues simply do not take into account that there will be a series of additional income both from privatization and from the profits of the Central Bank. He made very good profits from lending to banks and from the devaluation. And part of this profit will be withdrawn to the budget. But this, unfortunately, is one-time income. They will help us a lot this year, and the deficit this year will be very significant. Less than 3% of GDP. Although it should have been around 4. And this year the numbers will be very decent. The trouble is that these are one-time incomes and what will happen next year, and even more so in 2018, is less clear.

S. Sorokina- I’ll stop you for now. And I turn to Nikolai Vladimirovich. What do you feel about this study and its results from our colleagues from the Higher School of Economics?

N. Petrov“It seems to me that no one is particularly optimistic today, including the authors of the study. Vladimir showed us a completely optimistic position, which we have the pleasure of hearing from the government from time to time. I would remind you that privatization, if Bashneft is now privatized in favor of Rosneft, then it is strange to think about any special income...

N. Petrov: No one is optimistic today

V. Nazarov- We hope that this will not be in favor of Rosneft.

S. Sorokina- I have a feeling that Rosneft always absorbs and nothing is left for everyone else. Or am I wrong?

N. Petrov- For now, at least...

S. Sorokina- Based on previous experience.

N. Petrov- ...there was no reason to underestimate the appetites and capabilities of Rosneft. Inflation. Rather, if there is not enough money, we will see another portion of it. As for the indicators, yes, you can reassure yourself that there is only a 1% drop. But what attracts attention is that not only are our investments in a very poor condition, which means that there cannot be growth for quite a long time, there is nothing to grow from. But consumer demand is also falling significantly faster than the economy is falling. That is, the money that people receive, they are afraid to spend today, and thus we do not yet see either an external mechanism, an engine for economic development in the form of investments, or an internal one in the form of growing consumer demand. Therefore, we are not just saying today that yes, this is close to stagnation. A small fall, sliding down. But there are absolutely no prospects in sight that would allow us to share the optimism of some leaders of the government’s economic bloc. That the bottom has already been passed and growth awaits us in the near future.

S. Sorokina- Nikolai Vladimirovich, I understand the position of the government members, but they can’t say that everything, everything is bad and will continue to get worse. It's simply impossible to imagine this. And on the other hand, in what terms should they characterize the situation, like not to lie, and not to talk about this bottom for the tenth time and not to scare the population.

N. Petrov- In any case, there is no point in scaring the population, because this is fraught with negative consequences, even if there are no serious objective reasons for this. This is understandable. The question is to what extent such psychotherapeutic functions of the leaders of the economic bloc dominate or do not dominate the functions of such normal expert analysis, when actions are taken and we see that the government, in general, is more inclined to a rational position, based on the real situation. Another thing is clear. What is it not economic problem purely. That political decisions, political steps are needed here. Without this, the government does what it can. But it can’t do anything.

S. Sorokina- Do you agree, Vladimir?

V. Nazarov- For now, we are really observing a certain pause, let’s say, in making any decisions. There are really no significant things discussed before the elections. An order has been given...

S. Sorokina- Duma or presidential.

V. Nazarov- I hope that from the Duma. Although anything can happen. And maybe the situation will continue to be suspended. But the command was given to two centers, the Kudrin Center and the Stolypin Club, to work out strategies. For now, they have gone into the fields to work out strategies, and the government is busy with current affairs.

S. Sorokina- By the way, these two clubs’ positions still differ. And how will the golden mean be found?

V. Nazarov- I hope that they will not look for the middle, because to look for the middle between them means harnessing a swan and a pike, respectively, and leading...

S. Sorokina- That is, one option will be selected.

V. Nazarov- It seems to me that it is rational to choose one option.

S. Sorokina- Which one are you leaning towards? To Kudrinsky?

V. Nazarov- Naturally, it’s just a proposal from the Stolypin Club, there are a number of correct things about the investment climate, about entrepreneurship, slogans. Unfortunately. About judicial reform. But there are no specifics. And there are specifics only in those places that cannot help but frighten. The specifics are that the only problem is that there is no money, it needs to be printed. But colleagues don’t understand that money doesn’t come out of thin air. If you print money, that means you are taking it away from someone. You either take them away from the population in the form of higher inflation, or, accordingly, from enterprises in the form of more expensive loans. And then the question arises, who do you give this money to next? And through what channels? Forgive us, 60% of banks are state banks. The lion's share of those who receive loans from these banks are state-owned companies. That is, you took money from the population and, most likely, from the most efficient enterprises, and transferred it through not the most effective tools not the most efficient enterprises. The question arises to what extent this will stimulate economic growth. I have great skepticism in this regard. That I, in principle, do not expect anything good from this target mission, and our Russian experience shows that this did not lead to anything. In the 90s, many times they tried to get directly from the Central Bank into this enterprise, to throw money just like that, but the economy did not respond. They think, maybe we don’t throw enough, let’s give more. They throw more, but still nothing works.

S. Sorokina- But such a tempting story, take it to print. Kind of like reviving everyone. The cycle has begun. This is a serious topic - reducing demand, for example, domestic. People have tightened their grip, perhaps not in such colossal numbers. But even in life you feel how tight people are in their, for example, some daily expenses.

V. Nazarov- People cowered because of expectations. That is, the expectations are really negative.

S. Sorokina- Not only. Already today's life dictates that we need to tighten up.

V. Nazarov- If people saw that the economy is growing, that every day my salary is a little bit, but it is growing, yes, it is low, but it is growing. Then people would consume and take out loans, which is what they did until recently. That is, they would be more optimistic. When they see that all this is slowly shrinking, today I have a salary, but tomorrow no one knows what it will be. What inflation will be is also unknown. That's why everyone is so tense. These are purely expectations. By the way, the budget is also one of the factors, that is, if we have a very large budget deficit, investors may not trust us. They will think about how these guys will get out of this deficit. What will they do? Print money, raise taxes, what actions. And not everyone will dare to run to invest in a country with such a deficit.

S. Sorokina- Unhappy. What do you think, Nikolai Vladimirovich, is it expectations or reality that forces people to reduce their demand, their spending, even psychologically, how serious is this for society?

N. Petrov- I think this is very serious. And we see from sociological surveys that people tend to assess the current situation more optimistically than the prospects for the foreseeable future. And this instability, the feeling that tomorrow will be worse than today, it has the character of such a vicious circle. That is, it is very difficult to break. If people proceed from these expectations, then their behavior is more likely to provoke the dynamics that they imagine. And in this regard, I would like to mention another study that we are conducting with colleagues for the Committee on Civil Initiatives. And we analyze the state of affairs in the regions. And we compare socio-economic well-being, political situation and protests, if they occur. And what we see is that once every six months we carry out these sections. What we see rather suggests such pessimistic thoughts. Because social economic situation worsening in a significant number of regions. And if you look at the map, it’s such a solid red spot. That is, according to the criteria by which we assessed it a year ago, today it is significantly worse in most cases. And in this situation, it would seem, when a lot depends on the political design, that is, on the ability of the regional political system to extinguish those negative things that objectively arise in the economy as a result of the crisis. Unfortunately, political design is also deteriorating. Little by little, but nonetheless. Mayoral elections are being cancelled, the rights of the opposition are being squeezed, and representative government is playing an even smaller role. And the ability of the political system at the regional level to be flexible and respond to the worsening socio-economic situation and channel the tension that naturally arises in society is decreasing rather than increasing. That is, the gap between the objective situation in the economy, people’s perception of it, on the one hand, and the ability of the political system to extinguish any tensions that arise because of this, this gap is growing.

N. Petrov: Political design is also deteriorating

S. Sorokina- But this is actually scary. I understand that so far in our country some such manifestations of resistance arise when an enterprise closes or wages are not paid for a long time. People go out into the streets and somehow defend their specific economic loss. But these may no longer be one-time actions; there may be many such enterprises. By the way, Vladimir, if, for example, we really exhaust the Reserve Fund this year or early next year and there will be big holes in the budget. This may result in interruptions in the payment of wages.

V. Nazarov- We must keep in mind that we have not yet exhausted all our reserves. We still have the National Welfare Fund.

S. Sorokina- This is a separate story. It seems that it is not intended to plug budget holes.

V. Nazarov- Yes, but even in budget code it is stated that it can be used for the purposes of the pension system. And one can, in principle, understand its shortage. This is one of the main loads for federal budget– financing the pension system deficit. Therefore, with such a flexible understanding of the functions of the National Welfare Fund, in principle it can be used...

S. Sorokina- We talked about the situation in the pension system and, frankly speaking, I would not like this fund to be depleted so quickly.

V. Nazarov- Unfortunately, I am afraid that we will exhaust this fund and will increase borrowing. But, most likely, this will all be within reasonable limits. That is, they will stretch out the use of the Reserve Fund as long as possible, then they will use the extension of the National Welfare Fund as long as possible. They will borrow wisely. But this is also not the end story. That is, you can keep it this way for several years. And then we need to do something.

S. Sorokina- That is, in the near future there will not be such non-payments.

V. Nazarov- Massive non-payments are absolutely unclear why they would suddenly arise. Because accordingly in public sector Still, the obligations are somehow fulfilled. In the private sector too, this is still not a drop of 10-20%, this is slow stagnation. Moreover, our economy is mainly responsible, our salaries are actually flexible, so, most likely, we will not be talking about non-payment of salaries, but about reductions.

S. Sorokina- There are also research results that indicate a serious drop in the business activity index.

V. Nazarov- Yes, but this is what I said, that the investment climate is deteriorating accordingly. But this must be interrupted precisely by structural reforms, which are constantly being talked about.

S. Sorokina- I remembered the wonderful Viktor Stepanovich Chernomyrdin, one of his wonderful sayings: our grandchildren will envy us. This is how it feels.

N. Petrov- Svetlana, it seems to me that this is a very correct plot in the sense that today we are talking mainly about whether we will make it, whether we will have enough. IN family budget We'll make it to payday. But there won’t be any pay, that’s the thing. That is, we are now talking about when we will finally spend the money that has accumulated and is in our stash. And the worst thing, it seems to me, is not that we are counting on enough for a year, two or a year and a half, but that the further reforms that Vladimir is talking about, they also do not give immediate results. And they require certain funds in themselves. That is, we will come naked to a situation where it is no longer possible not to make reforms, but when any reforms will be incredibly painful.

N. Petrov: We will come naked to a situation where it is impossible not to make reforms, but when any reforms will be incredibly painful

S. Sorokina- And the situation of the same population is getting worse. Here's something else I thought about. The horror is that even if we somehow manage to pull out a wonderful and last fund for the second time, it still won’t even last for 10-20 years, when there is still something we can do. It's still a much shorter time.

V. Nazarov- Yes, I would even make it worse, will we reach the global level with this fund? economic crisis, which will be caused by the fall of China. The biggest risk now for the global economy is Chinese economy.

S. Sorokina- When can this happen?

V. Nazarov- We don’t know. But it's a huge bubble. Which in its scale is comparable to the American mortgage of 2008. And in principle, now the Chinese economy is a huge construction complex, which is not very clear what is being built. And it’s very similar to the Soviet system, when you have huge savings of the population, that is, the population has a lot of trust in banks, brings money there, so the liabilities include the population’s money and other credit resources, and your assets include a huge construction project. The Soviet Union had tanks, guns, and missiles.

S. Sorokina- And in China.

V. Nazarov- And when they wonder where our Soviet savings went, but they were invested in Africa and supported the rebels. Tank factories - that's where your money is. But when you needed to buy food, no one could buy food with that money...

S. Sorokina- And in China.

V. Nazarov- There is endless construction there. They build roads, airports, railways.

S. Sorokina- This is a good investment.

V. Nazarov- This is good, but up to a certain limit. When you already start spending 40% of GDP on this, this is probably not very normal. When this is, relatively speaking, the Shanghai-Beijing road, it pays off greatly. And when the roads are somewhere in the northwestern part of China, where even by Chinese standards there are no people, who will drive on them. What will they carry on them? Absolutely incomprehensible. And it grows like a snowball.

S. Sorokina- Volodya, what do experts think, how long will it take for a crisis to happen?

V. Nazarov- The faith in the Chinese economy is the same as in American mortgage bonds. If you watched the American film “Big Shore”, then the main characters there, who saw according to statistics that the crisis was inevitable, they invested accordingly in the fall of the American economy, and decided to make money on it. Well, they had to wait more than a year. They thought it would fall tomorrow, because it doesn’t happen at all when...

S. Sorokina- That is, it is not clear when.

V. Nazarov- More likely we're talking about about several years.

S. Sorokina- That is, still within a decade.

V. Nazarov- Absolutely. And then we will see, accordingly, the price of oil in the region of 20 dollars per barrel.

S. Sorokina- And then what?

V. Nazarov- And then, of course, no matter what Reserve Funds we have, we will have very big problems. Therefore, we still need to carry out these reforms more intensively, and not think that we have these three years. Because at any moment a click can be heard...

S. Sorokina- Again I remembered Viktor Stepanovich, who spoke, already in recent years, being out of power, when he looked at these insane oil prices, he said: oh, my government would like to have such prices, after all, we had them. I suddenly thought, the prices there were very low. Below 20 dollars. They were quite small.

V. Nazarov - 8- It was 9.

N. Petrov- But the dollar was still more expensive then than it is today.

V. Nazarov- At current prices, this is roughly speaking in the region of 20.

S. Sorokina- And somehow they got out. Maybe there were fewer global image projects. In the second part of the program, I would really like to talk about what the actual possibilities are. Well, if only we don’t sit and wait until we finally spend these funds, there should have been some options and opportunities. Some borrowings, external and internal. Reducing some of your own expenses that you may have to make or some budget lines. Now I wanted to ask you something. And how much of this same National Welfare Fund do we have now? He held on more or less evenly. Because if the Reserve Fund simply fell, then the national welfare remained more or less even. What is the amount of funds there?

V. Nazarov- There are about 5 trillion. Accordingly, approximately 70 billion dollars. But part of this money, unfortunately, was not invested in the most liquid things. About a third. And it’s better not to count on this third. We can assume that we don’t have it.

S. Sorokina- On this optimistic note, we

Let's take a break now.

S. Sorokina- We welcome you again. We are talking about the results of a recent study by the HSE Development Center, which states that we have not reached the bottom in the economy, that the Reserve Fund may be exhausted before the end of this year. As Vladimir Nazarov corrected, probably before the start of the next one. Forgive me for laughing, but this is apparently nervous. And that we will eat up the National Welfare Fund, too, because the holes in the budget are significant. Now let's talk about this. Of course, there are some necessary actions that should obviously be taken. What could be going on here? There may be cost reductions and external and internal borrowings. What could these abbreviations be? The first thing they write to us is: in 2018 there will be football and elections, so everything is great. Indeed, there are such colossal projects for which it seems that today there is simply no money and urgently need to be either frozen or abandoned. There really is football in 2018. Can we somehow reduce this project or not?

V. Nazarov- Personally, I was in favor of reducing the number of cities in which the World Cup is held.

S. Sorokina- I'm terrified. From one St. Petersburg arena, where immeasurable billions are leaving, even if they leave, it seems to me that we cannot afford it.

V. Nazarov- But now we are caught up in most of the expenses and I’m afraid that it’s too late to change anything. The point is, a significant part of the expenses has already been done...

S. Sorokina- Then we will also welcome those who will play on our fields.

V. Nazarov- It’s not as much money as construction, after all. Actually, the events there make the lion's share of expenses for security, for everything.

S. Sorokina- The most large construction sites our new cosmodrome, for example, a bridge across Kerch Strait. What else is colossal, what can’t be given up and what adds up to money.

V. Nazarov- The cosmodrome has already been made. The bridge is also an inevitable story. Another thing is that, in principle, these expenses really look like waste compared to what is happening. But they are not the ones who make the difference; if we abandoned the cosmodrome, then relatively speaking, it would cost 20 billion rubles.

S. Sorokina- Little things.

V. Nazarov- That is, if you collect a pool of such projects, you can save significantly.

S. Sorokina- Isn’t the Ministry of Finance considering such options?

V. Nazarov- Well, every year this battle happens, every year the Ministry of Finance tries, sometimes it succeeds, sometimes it doesn’t.

S. Sorokina- That is, we cannot save money on these colossal construction projects.

V. Nazarov- In the future, there is no need to start them. At least don't start new ones.

S. Sorokina- Yes, Nikolai Vladimirovich.

N. Petrov- Firstly, with construction projects everything is really arranged in such a way that at some point it costs more to stop construction and mothball it than to finish it. When it all started, there was a different financial and economic situation, different expectations. But I would like to remind you that with the 2018 program, the government made significant cuts in expected expenses due to the fact that it was proposed to invest much less in infrastructure and mainly from regional budgets. At first, it was planned not so much to build stadiums as to disrupt airports and roads.

S. Sorokina- Today I look with horror at how much money Moscow is pumping into its kilometer-long sidewalks. This already seems like unnecessary waste to me.

N. Petrov- Looks a little like a feast during the plague. Not to mention the fact that the consumer doubts the value of what is being done. But there are still huge projects that were not mentioned. These are pipes. This is a pipe to China, it is not clear with which economic indicators given that the Chinese economy is not in the best position. But the price of gas that should go there through these pipes has not been fixed. That is, we will build pipes, invest enormous amounts of money, but another thing is that it’s not just throwing money away. This includes pipe production, construction and installation work. Therefore, when we look at GDP, these figures also include absolutely economically ineffective costs, which are gigantic public investment and which help GDP look more decent than it would look if all the money were spent purely rationally.

S. Sorokina- But can’t this be preserved somehow?

V. Nazarov- The pipeline is a separate discussion. In general, our state corporations are not very efficient.

S. Sorokina- That's for sure.

V. Nazarov- And the expenses that they make, of course, they don’t go anywhere. Therefore, in my opinion, privatization is the main thing that needs to be done now. Because at the same time it will allow us to fill the budget and somehow increase the efficiency of these enterprises. And the most important thing is to transfer their possible future problems and debts from the budget to their future owners, who will cope with them, unlike the budget.

S. Sorokina― Next question via sms: who will be the first to fall under the knife of funding cuts? What sectors? My feeling is that the military needs to be reduced. Still, the largest share of the budget. The most luxurious life, one might say, with a budget like that of a warring country. And it seems to me that we need to tighten up here. But this is rather a political question.

N. Petrov- Unfortunately, there are three sacred cows of the budget that the Ministry of Finance, even if it really wants, cannot take aim at. This is the military-industrial complex, spending on defense and security in general, this is the pension system and these are social obligations. Look, even though we have an election year, our pensions are not fully indexed.

N. Petrov: Three sacred cows of the budget, which the Ministry of Finance, even if it really wants, cannot take aim at

S. Sorokina- That is, you can encroach on your pension benefits. But it’s not possible for the military.

N. Petrov- Encroaching on any of these cows is seriously very serious social problems. And they are social with the military-industrial complex too. These are millions of people who have received some kind of government orders, they are doing something for them, and so on. We already see how social obligations are being tightened.

S. Sorokina- This is no longer a very sacred cow.

N. Petrov- If you push it more energetically, there may be an explosion in the pension system. And then the Ministry of Finance simply proportionally reduces everything possible.

V. Nazarov- Actually, yes, we really should give up sacred cows. Therefore, if we single out a certain industry and say that nothing needs to be done there at all, just increase it, then the burden on others increases disproportionately. And it turns out that some absolutely monstrous things need to be done there.

S. Sorokina- We already understand about the pension cow. They don’t index it; next year they will already withdraw pensions from working pensioners.

V. Nazarov- It’s unlikely to happen so harshly.

S. Sorokina- You confessed behind the scenes. With social obligations there is simply nowhere to cut.

V. Nazarov- Why, even from the federal level we carry out 800 support measures. Social support. Each of 10 people 7 receive different types social support. Of these, there are most likely 2-3 who really need these measures.

S. Sorokina- We have talked about targeting a thousand times.

V. Nazarov“Now is exactly the moment when the time has come to move from words to deeds, because there is a need to save money and there is a real need to help the poorest segments of the population.

S. Sorokina- When will you figure this all out?

V. Nazarov- We talked about this for a long time. I headed the Strategy 2020 group on poverty and targeting, and we wrote a whole section there and everyone seemed to like it. But of course, nothing has been done and so far our progress in this regard has been more than modest. But I hope that after some elections this opportunity will open up, because now at such a dangerous...

S. Sorokina- What would you cut from this long list?

V. Nazarov- In principle, you need to approach this very carefully. First of all, measures such as non-indexation of these benefits are needed. They are extended only to the bearer of the benefit, and not to all family members. Rationing is when not all of your housing and communal services, but only according to certain standards, are paid. With such measures of providing benefits only to the poor, this system must somehow be settled. And use the money saved to introduce benefits based on need. For the poor segments of the population, make a normal allowance that would bring their income to the subsistence level.

S. Sorokina- And still consider raising the retirement age.

V. Nazarov- Pension is a must.

S. Sorokina- And those categories that retire early are not always a working story today.

V. Nazarov- And according to the military, I think that this is not a sacred cow. It is necessary to reduce, of course, it is unlikely that this can be done with a sudden jerk, but little by little, in my opinion, this is justified. There is no need for a jerk, but when now these enterprises work in three shifts, the price tags are inflated, monstrous things are happening in this military-industrial complex, give up the strangest things, do not close this enterprise, but at least switch to one and a half shifts.

S. Sorokina- And we get the mysterious Armata tank, which we are proud of, although no one has looked inside with a sober eye.

V. Nazarov- Maybe you shouldn’t look there.

S. Sorokina- It’s better not to get upset. Your opinion on how and where to cut back.

N. Petrov- It seems to me that the fundamental story is what distance we run. What the Ministry of Finance proposes is quite rational from the point of view of the Ministry of Finance, but it does not allow us to see the light at the end of the tunnel. That is, it allows us to shrink and spend maybe less, but when we proportionally start spending less, then we rely on the fact that there will be some kind of engine that will drag the economy further, this is only for some external miracle. Oil prices have risen, or others have done poorly, but against this background we look more or less decent. That is, this saving program that the Ministry of Finance is implementing, and what else can it do, it’s like a survival program, and not a program associated with any prospects. And here there must certainly be some priorities. You don’t just have to push everyone and don’t just take aim at sacred cows. This is already happening. Military program The military-industrial complex is shifting in time, that is, the money seems to be the same. But we will spend them later. But we need to determine priorities and we really need to, as Vladimir says absolutely correctly, include private business. Include real machines that can be pulled, understanding that state-owned companies are a significantly less efficient economic structure, simply based on all our previous experience.

S. Sorokina“Our private business is intimidated and is not in the best condition. I wanted to ask you something else important. After all, if we talk about some kind of reduction in military budget expenditures, for this we must a little stop considering everyone around us as enemies. This is already about politics. And our isolationist doctrine, which we have been adhering to lately, must be somehow revised. Only in this case we can not be with the budget of a warring country, but with something a little more modest.

N. Petrov- This is true. But this precisely applies to those political restrictions, the conditions within which the government and the Ministry of Finance further build their own strategy. It is not them, not the government, who decide. And I think, my assessment, we have not yet talked about the fact that there is an election trap. We will now go through one election, and the next one is scheduled for 2018. And if we drag out time until 2018 and do not carry out any serious reforms, and they are, of course, painful and unpopular, then by 2018 we will definitely be crawling, having depleted both of our funds. And the question arises, the elections were spaced out roughly like the 2018 World Cup. In a situation where it seemed that every day was better than the previous one. Today this is not the case and today we need to look for political solutions. This could be either early presidential elections, which will allow you not to spend a year and a half just waiting. And start some serious program of measures.

S. Sorokina- Or something else, changing your relationship with the outside world.

N. Petrov- Undoubtedly.

S. Sorokina- Here's another one. There is a position not only to look for funds internally, but also to seek external borrowings. It is precisely these sanctions, which arose with well-known events, that strongly tie our hands in the sense of external borrowing. How seriously does this prevent us from borrowing from the outside? Volodya.

V. Nazarov- Of course it interferes. But so far, it was literally at the last moment that we managed to place our Eurobonds at a fairly low rate. 4% each. But in the spring there was such a demarche on the part of EuroClear, when they refused to service the issue, and as a result, Russia took almost 4.6%, but we must understand that this is a ten-year issue. Over a ten-year horizon, even 1% is money. Therefore, of course, sanctions interfere. But I wouldn’t look at borrowing as a magic wand either. They make sense if your borrowing interest rate is much lower than your GDP growth rate. It is obvious that our GDP in dollar terms is not growing by 4% per year. Therefore, we must understand that we are only extending this certain time, yes, we can carry out these reforms not so quickly and not so painfully, but still we must do it. Because sooner or later the debt will become very large and we will not be able to service it.

S. Sorokina- But there is another side. Investments are not coming from outside either.

V. Nazarov- This is the key problem. This is a much more important problem than the labor intensity of government borrowing. Because I believe that our domestic demand is very limited. It cannot be a driver of large-scale economic growth. We must conquer foreign markets and look for niches there. For this we need technology and investment. If there are none, this is of course a dead-end branch.

S. Sorokina- Despite the fact that at the St. Petersburg economic forum they once again said how great everything is and how everyone is eager to simply invest their dollars and euros in our economy, as I understand it, this is all somewhat wrong. And if we are talking about the same privatization that private business must pull, then how about him. It's complicated.

V. Nazarov- For this we need judicial reform, absolutely necessary. And we need to show that there are still guarantees of property rights in the country, you just need...

S. Sorokina- That is, start and finish everything again.

V. Nazarov- In fact, a much more fundamental task than balancing the budget. The budget can be balanced...

S. Sorokina- But it’s not like everything fits into one budget line or one word. Yes please.

N. Petrov“And, unfortunately, we must understand that we are not standing still. And we are rapidly moving backwards. What Vladimir said about the judiciary and the guarantee of property rights, let's look at the dynamics. It is always said that this should be done regularly. But look, in recent months, here we have Kamenshchik, here we have Yevtushenkov, here we have a public demonstration of how these property rights are not guaranteed. It's finally gone from us Arbitration Court as an independent third highest court and for this they even made changes to the Constitution. And the Supreme Court has moved or is moving to St. Petersburg. That is, it seems to me that yes, of course, judicial reform is more than overdue. But what we see is a sharp movement in the opposite direction.

S. Sorokina- So wishes remain wishes. Nothing happens. And besides, of course, if the history of disengagement with the entire surrounding world continues, then it seems to me that we will continue to roll back in all directions. Because what other options are there? Inside, twist everything and remain proud, offended and not communicating with everyone. I don’t understand whether we still have any chance of breaking through this external blockade of ours.

N. Petrov- I think that this is politically possible, but it is unlikely to be fundamentally possible. That is, I would not be surprised if, some time after the Duma elections, namely, after waiting for the American elections and looking at what is happening in Europe, the government would still take some steps aimed at softening the confrontation with the West. Another thing is that it is difficult to expect any radical changes. We can expect a demonstration of readiness to carry out reforms in the economy, some appointments, some positive steps, and we have seen a lot of them, including in the Ukrainian direction. But I’m afraid that all this will be done in order to go to the market, take money and buy an opportunity with this money...

S. Sorokina- Live some more. But not radically. And the main thing here is that you don’t really understand what could be radical. After all, Crimea will not be returned anyway.

V. Nazarov- It seems to me that there is no need to dramatize. Because, in principle, everyone is interested in the situation returning to normal. That is, the world is globalizing and it is clear that it is better to have a Russia integrated into this global world than a Russia that bristles, is closed in on itself and has no idea what it is doing. Therefore, as I think, practically ordinary people and the so-called Russian elites, the same thing abroad, are still interested in finding some ways to solve these problems. And we have the experience of a number of countries, both China and Iran, where sanctions were imposed and then they were lifted. The main thing is to just work in this direction. Not the other way around. That is, if you go in the opposite direction, it is difficult for you to reach your goal.

S. Sorokina- Yes, I understand. Well, actually, these are some disappointing conclusions. It's actually a pretty obvious story. I really hope that the information reaches the very top and that it is not distorted too much. That is, they still see the picture of the world. And it seems to me that these are obvious things. Starting from judicial reform and support for private business, to openness to the wider world and to political flexibility within the country, among other things. These are such obvious things. Do you have at least a little hope that this will still happen? Coming soon.

V. Nazarov- As long as I breathe, I hope.

S. Sorokina- So. Volodya said this. Please.

N. Petrov- He will certainly wait, he must be an optimist.

S. Sorokina- He is young.

N. Petrov- Due to age. It seems to me that the problem is that all those factors that you are talking about did not appear today. They were there yesterday and a year ago. But, unfortunately, there is a movement in the opposite direction in many directions.

S. Sorokina- OK. Let's finish here. We just can't go any longer. We talked about the imminent depletion of the Reserve Fund and about what will happen to us next, or at least what should happen. All the best, goodbye, see you in a week.

In December 2017, the Ministry of Finance spent the last trillion of the Reserve Fund (RF) to cover the budget deficit, and from February 1, the “piggy bank” will cease to exist. “Storm” looked into what the Russian money was used for and what this means for the Russian economy.

The Reserve Fund existed for exactly 10 years - it appeared in 2008 after the Stabilization Fund was divided into the National Welfare Fund (NWF) and, in fact, the Reserve Fund. And now the Russian Federation will come under the jurisdiction of the NWF. The funds that were on the balance sheet of the Reserve Fund were excess income from oil and gas exports.

By February 2015, when the money was needed to close the budget hole, the volume of the Reserve Fund was 5.8 trillion rubles, and by the end of the year it had decreased to 3.6 trillion rubles (data from the Ministry of Finance). Billions were spent not only on patching holes in the federal budget, but, for example, on covering the budget Pension Fund. Approximately 160 billion rubles per month.

The volume of the last remaining “piggy bank” in Russia - the National Welfare Fund - according to the forecast of Finance Minister Anton Siluanov, at the beginning of this year will amount to 3.7 trillion rubles. The budget for this year involves the withdrawal of 1.1 trillion rubles from the National Welfare Fund. In this situation, the funds of the National Welfare Fund may not be enough for a long time (three years of 1.1 trillion rubles each - and 300 billion will be left of it). True, the Ministry of Finance promises to replenish the fund with budget money when the cost of a barrel exceeds $40.

“We must recognize the fact that since 2008 the country has been living in a state of aftershock therapy and getting up from its knees. Having barely recovered from the shock of the global economic crisis in 2008 and 2009, we began to pursue our geopolitical line to strengthen and defend sovereign Russian interests, and came under sanctions pressure and accusations of violations international law and other nonsense. And defending one’s own sovereign position and policy within the framework of the world geopolitical map is a costly matter and requires a lot of money. It is logical that in order to maintain stability and ensure economic development I had to spend money out of pocket,” says an analyst at the International financial center Roman Blinov.

Since the Reserve Fund has dried up, money to finance the budget deficit will be taken from the National Welfare Fund. In 2017, the budget deficit was 1.6% (1.5 trillion rubles). According to Pyotr Pushkarev, chief analyst at TeleTrade Group, in the non-replenishment mode, the National Welfare Fund will calmly cover the two-year deficit.

“And the federal budget itself will be used in the same way as in the last three years: including to increase salaries for public sector employees, benefits, payments to compensate for the consequences of the total rise in prices since 2014, for infrastructure projects,” he says.

Experts are confident that as long as the state has a decent “piggy bank”, the authorities will not openly save money on pensioners and the socially vulnerable population in general.

It will be more difficult if, hypothetically, force majeure events occur in the economy. For example, commodity prices will rapidly creep down (below $40 per barrel), and the Ministry of Finance will not be able to replenish the National Welfare Fund.

“As long as prices for our main export goods are rising, then Russian economy will feel comfortable, and our government will have the opportunity to set up and execute the federal budget within the framework of a modest, but surplus, or, “at worst,” with a modest deficit,” Blinov points out.

It’s another matter if the “piggy bank” does run out. According to the expert, in this case, “the government will have to work. It’s not easy to sit and look at the oil and gas pipeline from which investments and currency flowed like a river into the country.”

“A lot of time was spent watching this wonderful spectacle. and during this period of history, it probably should have already dawned on the majority of interested parties that water does not flow under a lying stone. And it seems to me that without carrying out global structural reforms that affect almost all aspects of not only the economic development of the country, but also the political present of the country, we, starting not even on February 1, 2018, but much earlier, will not be saved either with the Reserve Fund, not without him.

Well, if the country’s economy revives and receives incentives for development and normal functioning, then the population will get everything they want: low interest rates, transparent and reliable banks, profitable enterprises and new jobs and, finally, growing incomes,” sums up Blinov.

Alena Katkova

Because it ran out of money. The Insider explains what this means for the country and what it threatens for Russians.

What is the Reserve Fund and where did it come from?

On February 1, 2008, the Russian Stabilization Fund (part of the total gold and foreign exchange reserves) was divided into the Reserve Fund and the National Welfare Fund. The reserve fund is part of the federal budget, which was replenished from revenues from the sale of oil, gas and condensate, and was spent to finance the budget deficit. During the period of high oil prices, the reserve fund grew, but in recent years it has been steadily falling.

What were the resources of the Reserve Fund?

The reserve fund was placed in a highly liquid foreign currency or assets denominated in foreign currency. Therefore, the funds of the fund were part of Russia’s gold and foreign exchange reserves, but unlike other assets of gold and foreign exchange reserves, they were at the disposal of the Ministry of Finance, and not the Central Bank.

Does this mean that the state has gone bankrupt?

No. On the contrary, the Central Bank's total gold and foreign exchange reserves have been growing recently and exceeded $430 billion in December. True, I grew up and external debt(in February last year, the Central Bank announced that the debt had reached a critical level of 42 percent of GDP, a record figure for Russia).

Why is the Reserve Fund exhausted and what does this mean for Russians? Director of the Institute of Strategic Analysis Igor Nikolaev explains on his fingers

“This happened because there is not enough money. Accordingly, budget expenses significantly exceed income. That is, the economy does not generate enough money to satisfy all spending needs, despite the fact that expenses are already tight; over the past few years, we know, there has been a significant indexation of pensions. And yet, there was not enough money. In order to somehow fulfill obligations, this money must be taken from somewhere. The reserve fund was spent. Several trillions of rubles have been spent over the past three years. When they say, “Well, there’s a crisis, but we didn’t feel anything,” they didn’t feel it, because we spent our money.

We ate half of our money from two funds. If the economy continues to be in this state, even if it is not falling, but not growing either, the budget will still be in deficit, and money will still have to be taken from somewhere to cover this deficit. This means that we will have only one fund left, the National Welfare Fund. And if we spend the second fund, and the economy still doesn’t work, then we’ll have to cut spending very sharply, dramatically.”

Why can’t we just spend the Central Bank’s reserves? On the contrary, they have only increased

"Waste of reserves Central Bank means that the country is doing very badly, there are no reserves left, and they have already taken on the most emergency reserve. They will immediately lower our credit and sovereign ratings and immediately lower the ratings of our companies. And investors will have a very definite attitude towards such a country. This is a practically bankrupt country. We already have huge problems with borrowing funds, since sanctions have been introduced.

It is also necessary to take into account that the Central Bank is a body independent from the government. Funds from the Central Bank can, in principle, be spent, but they are not used to finance the budget deficit. We are not yet in a state of bankruptcy, so we are spending money from government funds.”

Reported the depletion of the Reserve Fund. The last trillion was spent last December to cover the federal budget deficit. From this year, Russia has only the National Welfare Fund. At the beginning of the year, it contained 3.753 trillion rubles, but “real money” accounted for about half of this amount. However, high oil prices provide a chance to replenish reserves. But the purchase of foreign currency by the Ministry of Finance may lead to a weakening of the ruble.

The Russian Ministry of Finance spoke about the results of the placement of funds from the Reserve Fund and the National Welfare Fund for the period from January 1 to December 31, 2017.

According to the department, in December 2017, the balances of the Reserve Fund in foreign currency in accounts with the Bank of Russia ($7.62 billion, 6.71 billion euros and 1.10 billion pounds sterling) were sold by the Ministry of Finance for 1 trillion rubles and in full used to cover the federal budget deficit.

According to the results of January-November last year, the deficit amounted to 532.4 billion rubles. But, traditionally, December accounts for the largest amount of spending, so the final deficit figure will increase significantly. According to the forecast of Finance Minister Anton Siluanov, the budget deficit in 2017 amounted to about 1.5 trillion rubles or 1.6% of GDP.

After the December operations, “zero balances were formed in the accounts of the Reserve Fund,” and from February 1, 2018, it will cease to exist, the department said in a statement. According to the decision made in June last year, the Reserve Fund joins the National Welfare Fund (NWF).

According to the Ministry of Finance, as of January 1, 2018, the volume of the National Welfare Fund amounted to 3.753 trillion rubles, which is equivalent to $65.15 billion. But of this amount, only $15.65 billion, 15.14 billion euros and 3 £36 billion. That is, there is about 2 trillion rubles in real money in the National Welfare Fund.

Earlier, Finance Minister Anton Siluanov predicted the depletion of the Reserve Fund.

“This year we will fully use the resources of the Reserve Fund, as provided for by the budget law,” he said.

The volume of the National Welfare Fund as of January 1, 2018, according to the forecast of Finance Minister Anton Siluanov, was supposed to be 3.7 trillion rubles, and its liquid part - 2.3 trillion rubles.

“The depletion of the Reserve Fund is a formality due to the fact that instead of two funds there will now be one - the National Welfare Fund. Although, to be honest, now only one name will remain from the National Welfare Fund. Previously, it was really a fund where money was reserved for structural reforms, for certain projects of the future that were supposed to change the social and economic state of the country through transformations, but now it is just a fund that receives money by exceeding the estimated price of oil and directs it to finance the deficit budget. That is, it can be called a money bag “for a rainy day,” and also for some targeted programs, has nothing to do with reforms,” says Alor Broker analyst Alexey Antonov

Former first deputy chairman of the Central Bank Oleg Vyugin told Gazeta.Ru that there are both pros and cons to depleting the Reserve Fund. The advantage is that this will “discipline” the Ministry of Finance, since it will not have the opportunity to “scavenge” money from the moneybox, and the budget will be adopted quite reliably. Minus - what if there is an attack negative consequences There will be practically no “cushion”.

But as soon as oil begins to fall to the critical level of $40 per barrel, the reserves may be exhausted and a devaluation of the ruble will be necessary.

But this year, thanks to high oil prices, reserves should be replenished. From January 1, 2018, a new budget rule. According to him, base price oil prices are $40 per barrel Russian oil Urals in 2017 prices (every year this value will be indexed by 2%). The excess amount will replenish reserves. The Ministry of Finance will buy foreign currency on the market in the amount of ruble additional income.

Anton Siluanov said that the volume of currency purchases by the Ministry of Finance at domestic market will amount to 2 trillion rubles in 2018. with an average annual oil price of $54-$55.

“At a price of $54-$55 per barrel, it will be about 2 trillion rubles. additional oil and gas revenues. It will even cover the spending of reserves that we have planned for next year,” the minister said.

He also emphasized that if the average annual oil price is $60, the department will purchase foreign currency worth 2.8 trillion rubles.

Georgy Vashchenko, head of the Russian operations department stock market Freedom Finance Investment Company notes that the Ministry of Finance should soon publish a plan and calculations for replenishing reserves; the preliminary estimate is in the range of $38-50 billion in 2018, provided that oil costs $55-60 per barrel of Russian Urals oil.

Last year, the Ministry of Finance bought currencies worth 830 billion rubles. These funds have not yet been credited to the National Welfare Fund.

Analysts foreign exchange market believe that the operations of the Ministry of Finance will put pressure on the ruble, and predict a decline in relation to it American dollar and euro.

“The regulator plans to completely buy out free currency and thereby eliminate the balance of payments surplus, which will actually put an end to further strengthening of the ruble,” says Mikhail Mashchenko, an analyst at the social network for investors eToro in Russia and the CIS.

The depletion of the Reserve Fund in 2017 will not come as a surprise, and financing of the budget deficit may continue from the National Welfare Fund (NWF), experts say. Data from the Ministry of Finance recently published show that in 2016, the Reserve Fund decreased almost fourfold and amounted to 972.1 billion rubles. During this time, the National Welfare Fund “lost weight” by 17% to 4.36 trillion rubles.

The fact that the Reserve Fund is in danger of being exhausted in the coming year was recognized by the Ministry of Finance last year. Deputy Minister of Finance Alexei Lavrov noted last September that the Reserve Fund would become scarce by the end of 2017, but after this, financing of the state budget deficit would begin from the National Welfare Fund. It is this that the financial department considers as a “pension airbag.”

He also does not believe that the National Welfare Fund will necessarily be spent. “This fund will be used only if necessary. There are other sources of financing the budget deficit,” he noted, noting that oil prices are now in the region of $50-55 per barrel. As you know, this year’s budget was drawn up on the basis that oil would cost $40 per barrel.

It must be said that in previous years average price oil prices were above $40. According to the same Ministry of Finance, in 2016 the average annual price of Russian Urals oil was 41.9%, and in 2015 - 51.23%.

The chief analyst of Sberbank, Mikhail Matovnikov, also said that Russia does not have to completely waste the funds of the National Welfare Fund. According to him, sources of financing the budget deficit should be sought through borrowing.

“Russia is now in a fairly comfortable situation where it can choose a source of resources,” Matovnikov suggested. “Actually, the Reserve Fund has not yet been completely spent, and there are other sources of financing. Investors understand that the Ministry of Finance has a choice, this will allow them to borrow for good conditions."

However, not all experts believe that in 2017 financial sector everything will be comfortable. In particular, the head of the Institute of Economics of the Russian Academy of Sciences, Ruslan Grinberg, believes that in 2017 there may be a rapid drop in oil prices. The fact that the low exchange rate of the ruble and the fall in quotes will help make people “move” Russian authorities, former Minister of Economy Sergei Nechaev told Lente.ru.

However, the current situation in the oil market leaves Russian fund hope for the future. Last December, Finance Minister Anton Siluanov argued that part of the additional revenue from rising oil prices in 2018-2019. will be used to cover budget expenses to preserve the Reserve Fund and the National Welfare Fund.