Dizziness from reserves

The government has accumulated almost 8 trillion rubles of superpituals, but is in no hurry to spend them

The National Welfare Fund (FNB) over the past month suddenly increased more than doubled - from $ 60 to $ 124 billion (7.9 trillion rubles). In the first seven months of this year, the Ministry of Finance bought currencies for 1.9 trillion rubles. The liquid part of the fund reached 5.7% of GDP (6.2 trillion rubles). The rest is invested in VEB deposits, the capital of the State Banks, the State University of the Ukraine and aimed at financing individual infrastructure projects.

Despite the impressive growth, this is a technical procedure related to the crediting of funds from current government accounts to the FNB accounts. This works as follows. In 2018, the volume of “additional” oil and gas revenues amounted to 4.1 trillion rubles. The Ministry of Finance converted these rubles into dollars through the Central Bank and at the beginning of August credited these funds to the FNB account. Due to this operation, the FNB doubled.

At the same time, the currency purchased by the Ministry of Finance in 2019 will be credited to the FNB accounts only in 2020. Determination of the specific date of enrollment, when the liquid part of the FNB exceeds 7% of GDP (7.5 trillion rubles) and, accordingly, this money can be spent - exclusively the prerogative of the Ministry of Finance.

Let me remind you, according to the budgetary rule in force since 2017, all oil and gas revenues of the federal budget, which exceed the “basic price” of oil ($ 41.6 for Urals in 2019), are sent to the FNB. On the way, within the framework of the same rule, these income is converted into US dollars. The Ministry of Finance first buys currency from the Central Bank, and the Central Bank itself is already buying currency in the open market.

Due to this, two main tasks are achieved. Firstly, for the purposes of budget policy, “superpownstures” from high oil prices are saved. In the future, they can be used to finance the budget deficit with a possible reduction in prices. Secondly, the current budget rule reduces the dependence of the ruble exchange rate on oil prices. At the same time, the ruble is weakened, increasing the competitiveness of internal production. Thus, the domestic economy operates in conditions as if the current oil prices were within $ 40 per barrel.

Applicants for the cube

It is due to the fact that the procedure for using the FNB funds above 7% of GDP has not been determined, an acute struggle has unfolded in recent months. In July, the government agreed and approved the amendments that allow the use of the FNB funds for state export loans. It is about lending to buyers of Russian products abroad.

For example, the FNB may provide a loan to a foreign customer to build a nuclear power plant near Rosatom. In this case, formally, FNB money is spent abroad, but obviously they will affect internal demand. A foreign buyer will have to use the received loan for purchases from Russian suppliers, this is the whole point of providing a preferential loan. Despite the approval of the government, the Bank of Russia and the Accounts Chamber opposed the initiative, blocking its adoption in the Duma. Consideration of this issue and the main battles are postponed until the fall.

At the same time, other initiators of the expenditure of funds were activated. Novatek, which has already received financial support from the FNB for the construction of the Yamal LNG plant, suggested using funds in order to subsidize the interest rates when buying gas carriers for his new Arctic 2 project. Andrei Klepach, the chief economist of VEB ( at the end of July, Klepach left the composition of the VEB board. - Ed. ) , Suggested using the FNB funds to issue cheap loans to defense industry enterprises.

The arguments of supporters of the position of “spending” are that the expenditure of FNB funds will stimulate economic growth. According to the calculations of the Institute of Research and Expertise of the VEB, having spent about 1.9 trillion rubles in 2021, it will be possible to increase the rate of economic growth by 1%, that is, only 1.2 trillion rubles.

The Central Bank acts as the main opponent of spending FNB funds within the country due to fears that this will actually lead to a weakening of the budget rule. Its long -term goal is to reduce the influence of oil prices on the Russian economy.

The FNB is a kind of "nurse", which should be spent only in exceptional circumstances.

From a macroeconomic point of view, these funds should be accumulated in external assets not related to the Russian economy. If the assets of the fund are invested within the country, it is not even so important what exactly, they will lose in value when reducing oil prices, precisely at the moment when they may be needed.

It is also advisable that the fund funds are invested in a wide class of assets not directly related to the oil and gas sector and minimally correlated with oil prices. For the investor, and in this case, they are the country as a whole, diversification according to the classes of assets and the geography of the investment just represents the airbag. Together with the hiring of independent professional managers, this is the “Norwegian experience” of the management of sovereign funds, recognized as the best in the world. The liquid part of the Federal Antimonopoly Service, acting as a liquidated reserve fund, should be invested in the most liquid and reliable papers. In excess of this value, the funds of the sovereign fund can be invested in other financial assets.

Gosravka trap

The active spending of the FNB inside the country nullifies the meaning of the budget rule and actually launches the mechanism for spending oil and gas revenues bypassing the established budget structures. If the government is ready to weaken the budget rule, then it is more logical to do it directly - to change the basic price of oil, and not to do this indirectly through the expenditure of FNB funds.

The discussion about whether or not to spend the FNB within the country is worth it - this is primarily a discussion about whether the budget policy is carried out in Russia at present.

Perhaps to support economic growth, it is really necessary to increase state expenses. But, in addition to the budget rule, there are other factors that impede this. For example, since the beginning of 2019, taxes have been increased to finance national projects, but the active spending of funds has not begun - with negative consequences for economic growth. Money was removed from the economy through additional taxes, but not returned back. At the same time, preferential export lending or financing of infrastructure projects, which are now proposed to allocate money from the FNB, could be carried out within the framework of national projects.

The rigidity of the budget policy is determined, among other things, the inefficiency of the mechanisms of spending funds by the state. In its current form, an active desire to spend funds of the FNB only looks like an attempt to bypass poorly working budget mechanisms and provide support to selected players. So far, the effectiveness of spending state funds remains low, more correctly to maintain the FNB funds in foreign assets, possibly with the expansion of the set of assets in which they can be invested.