Translated material
The same rake. Side view
State investment funds have already been created in Russia
Yesterday, the government generally approved the concept of creating an investment fund for government investment in specific projects. In Russia, attempts to create effective schemes for public investment support for large projects in priority areas on the basis of co-financing with private business (now it is fashionable to call this a public-private partnership) have been made before. However, they were considered unsuccessful.The main reason for the failures is that no one managed to create effective control over budget money, which led to their ineffective use, and in some cases to outright theft.
Back in 1993, the State Investment Corporation (Gosinkor) was created in Russia, headed by Yuri Petrov, the former head of the administration of President Boris Yeltsin. Three years later, together with Guta-Bank, Gosinkor creates the financial and investment association Gosinkor-Holding. In the late 90s, she had problems with inspection authorities. In 2001, Mr. Petrov was dismissed, and in early 2003, President Vladimir Putin dissolved the corporation by decree. In the spring of the same year, the Prosecutor General's Office initiates a criminal case into the illegal sale of 300 tons of state-owned silver by the corporation. By decree of the president, the corporation's property was supposed to go to the state (when Gosinkor was created, the government contributed hundreds of millions of dollars worth of property to its authorized capital), but it turned out that Gosinkor and Gosinkor Holding are different legal entities. Moreover, after signing the decree, the management of Gosinkor Holding renamed the association to the Guta group. Last summer, one of the group's leading assets, Guta Bank, which found itself in a difficult situation after the banking crisis, was purchased by the state-owned Vneshtorgbank.
Also in 1993, by decree of Boris Yeltsin, the Russian Financial Corporation was formed, headed by ex-Minister of Economy Andrei Nechaev, the purpose of which, according to the government order that followed the decree, was to develop and finance, on a repayable and paid basis, investment projects in priority sectors of the economy. However, there is no information about large-scale investment projects carried out by this structure. True, the financial capabilities of the RFK, with a constantly deficit budget in the 90s, hardly allowed the implementation of large-scale plans. However, she managed to create a number of specialized companies with the participation of public and private capital to serve various aspects of the investment process, as well as implement projects in the banking sector, food industry, etc.
By the way, the funds that RFK was to manage were called in a government decree signed by then Prime Minister Viktor Chernomyrdin an “investment fund,” the formation of which was entrusted to the Ministry of Finance and the Ministry of Economy. Just like now. The only exception is that the current fund, the regulation of which was approved by the government yesterday, will be managed differently, and there is now enough money: there would be worthy projects.
Another attempt to create a mechanism for public investment was the so-called development budget. It all started with the fact that the Communist Party of the Russian Federation and the left factions, which had a majority in the Duma, flatly refused to accept the 1997 budget. Then the government of Viktor Chernomyrdin decided to allocate 50 trillion non-denominated rubles from the expenditure side of the development budget, which was supposed to go towards specific investments in industry. The communists were promised participation in the distribution of this money. The then chief economic ideologist of the Communist Party of the Russian Federation, former head of the USSR State Planning Committee, Yuri Maslyukov, came up with a mechanism for managing this money. He proposed creating a separate Agency for Economic Development, combining the functions of a government agency and a financial institution with the right to conduct credit operations. This idea was formalized in a separate law prepared by the Communist Party of the Russian Federation. The Duma adopted it in the first reading, but then it was blocked by Yeltsin’s Federation Council, in which governors and heads of regional legislative assemblies then sat. Having entered the government of Sergei Kiriyenko, and then Yevgeny Primakov, Yuri Maslyukov continued to defend the idea of a separate development budget, but did not have time to bring it to fruition - Yevgeny Primakov resigned, and Yuri Maslyukov was no longer in the new Russian government.
The chief economist of the Troika Dialog investment company, Evgeny Gavrilenkov, believes that the new investment fund “may well repeat the experience of the previous ones.” “If Russia, in terms of the quality of the state, including the level of corruption, was the same country as Finland or Sweden, then the answers would be different,” he told Vremya Novostei. Mr. Gavrilenkov, however, says that the current investment structure has a chance of becoming “a little more efficient.” “I hope that the established selection criteria will contribute to this, as well as the fact that the projects already selected, including with the participation of international experts, will become controllable and accountable. In addition, these will only be large, significant projects that are under close attention, and not smaller ones, for which funds were scattered somewhere,” the economist noted.
Russia is not a pioneer in creating systems of public investment in projects that are priority from the point of view of the state in partnership with private business. Public investment funds have existed and exist in many countries, including the former republics of the USSR, now the CIS countries.
For example, in Kazakhstan the investment fund has been operating since the summer of 2003. Unlike what the Russian government intended to create, the investment fund of Kazakhstan is a commercial organization in the form of a joint stock company, the sole founder of which is the government of the republic. The purpose of this fund is to provide financial support to private sector initiatives in the non-resource sector (the Russian investment fund is focused on large infrastructure projects). Moreover, this support can only be provided through equity and non-controlling participation in the authorized capital of enterprises. Once the project passes the implementation stage and reaches a stable level of sales and production, the fund exits it by selling its share to strategic partners, other shareholders or portfolio investors. So far, the fund has financed 14 projects totaling $70 million. By the end of this year, it plans to begin co-financing 16 more projects with a total value of over $800 million, and in 2006 another 22 totaling $1.1 billion.