Huge amounts of the trade surplus leave Russia through several channels – 2024-03-15 14:57:55

/ world today news/ The main sector of the Russian economy turned out to be a “nanny without an eye” for the state

If we evaluate the importance of industries and sectors of the Russian economy by their share in the gross domestic product, then many will put the oil and gas sector in the first place. In 2017, Rosstat for the first time published such an indicator as the share of the oil and gas sector in the generated GDP. It turned out to be equal to 16.6%. An impressive share, although many thought it was higher. At the end of 2021, Rosstat estimated this share at 17.4%.

However, there is one sector of the Russian economy that surpasses the oil and gas sector in terms of scale of operations. If we evaluate it through the relative GDP indicator. We are talking about foreign trade (exports and imports). Let’s turn to the data of Rosstat, which allows us to estimate the value of exports and imports both in absolute indicators of expenditure (Russian rubles) and in the form of relative indicators (share in GDP).

Section one.

Expenditure volume of exports and imports of goods and services of the Russian Federation in relation to gross domestic product (GDP), %

I would like to draw attention to the fact that throughout the existence of the Russian Federation, its foreign trade has always been characterized by an excess of exports over imports. In other words, surplus or trade surplus. In some years, the surplus was measured in double digits. Thus, in 2000, it amounted to 20.1% of GDP. In some years, the excess of exports over imports is double or even more. For example, in 2016

Frankly, such “records” cause bewilderment and anxiety. Especially when you consider the balance of trade in the context of the balance of payments of the Russian Federation. The latter clearly shows that huge amounts of trade surpluses leave Russia through several channels.

First, from these surpluses they pay the income of the foreign investors withdrawn by them from the country. Second, surpluses are transformed into exports of private capital from the country to the West and offshore jurisdictions. Third, with the help of this currency, the Central Bank accumulates international reserves, which is also a type of capital export that fuels Western economies.

If you call everything by its right name, then chronic trade surpluses are a manifestation of the colonial plundering of Russia by the West. Using data from the Bank of Russia, you can calculate the scale of this robbery. Russia’s balance of payments has been published on the Central Bank’s website from 1994 to the present day.

I will give summary estimates of the total trade surpluses of the Russian Federation for four periods. The first period is from 1994 to 2000; the second – from 2001 to 2010; the third – from 2011 to 2020; the fourth – from 2021 to mid-2022.

So, the value of total surpluses (in billions of dollars) is:

first period – 137.6

second period – 899.7

third period – 1.187.3

fourth period – 328,

Overall, for the period from 1994 to mid-2022, the trade surplus amounted to $2,553.1 billion. This is the approximate scale of Russia’s plunder over twenty-eight and a half years. I say “estimated” which means they are most likely underestimated. Due to the fact that the data of the Central Bank reflect only legal transactions in foreign trade that are registered by the FCS. And there are still illegal operations or smuggling. And the scale of such smuggling, according to experts, has always been very significant.

The problem of imbalances in Russia’s foreign trade came to the fore especially clearly this year, especially after February 24. I have already written about this many times. According to the Bank of Russia, the export of goods and services from Russia in the first half of this year amounted to 319.5 billion dollars, the import – 161.1 billion dollars, and the trade surplus – 158.4 billion dollars.

The Bank of Russia has already published an estimate of the surplus for the first seven months of 2022, it rose to $192.4 billion. For seven months, the surplus amounts to a value that exceeds the record surplus figures for the entire year. And the record surpluses were in the following years (billion dollars): 2018 – 165.9; 2011 – 163.4; 2008 – 157.2. According to most experts, the surplus will continue to grow in the remaining months of 2022. No one doubts that by the end of the year, the excess of exports over imports will be at least 300 billion dollars and will be approximately twice as high.

And if earlier the monetary authorities of Russia (the Central Bank and the Ministry of Finance) rejoiced at the surplus records, today they express concern. After all, most of the surplus now consists of so-called toxic currencies (primarily US dollars and euros), which can be frozen or even confiscated at any time.

The sanctions war against Russia for the first time made many think: why do we need such trade surpluses? Is there any department in the state which is empowered to control and regulate the state of trade balance?

In the USSR, as many people remember, there was a Ministry of Foreign Trade (MFT), which implemented the principle of state monopoly of foreign trade. All foreign trade was in the hands of the state: MВT carried out planning and general management of foreign trade, and practical operations were carried out by specially authorized all-Union foreign trade associations specializing in certain groups of goods (in the 1980s there were about fifty such associations). MBT was also responsible for balancing exports and imports. Any imbalance in trade was treated as an emergency.

There was no longer a state monopoly on foreign trade in the Russian Federation. The department responsible for foreign trade, however, continued to exist by inertia. At first it was called: Ministry of Foreign Economic Relations of the Russian Federation (Ministers: V.N. Yaroshenko, P.O. Aven, S.Yu. Glaziev, O.D. Davidov).

In 1997, the department was reorganized into the Ministry of Foreign Economic Relations and Trade of the Russian Federation (Minister – M. E. Fradkov). In April 1998, however, the ministry was closed. Foreign trade issues were transferred to the newly created Ministry of Industry and Trade of the Russian Federation (Ministers G. V. Gabunia, Yu. D. Maslyukov).

In September of the same year, the Ministry of Trade of the Russian Federation was created, foreign trade issues were transferred to it (Ministers G.V. Gabunina, ME Fradkov). In May 2000, the Ministry of Economic Development and Trade of the Russian Federation was born, in addition to everything entrusted with foreign trade (ministers – G.O. Gref, E.S. Nabiulina).

In 2008, the name of the ministry was changed and became known as the Ministry of Economic Development of the Russian Federation. And all trade matters were transferred simultaneously, in May 2008, to the Ministry of Industry and Trade of the Russian Federation (which was previously called the Ministry of Industry and Energy of the Russian Federation).

And since then, foreign trade matters have been managed by the said department, which is briefly called the Ministry of Industry and Trade. From 2008 to 2012 it was led by V.B. Khristenko, then led by the famous D.V. Manturov.

Every year, the sphere of foreign trade in the Russian Federation becomes more and more private. This most important sector of the Russian economy was transferred from one department to another. Foreign trade seems to have been regarded as a “free appendage” to the main activities.

Thus, the Ministry of Trade dealt mainly with domestic wholesale and retail trade, and with foreign trade – according to the “residual principle”. Foreign trade became an even bigger “stepchild” in those ministries that dealt with economic development and industry.

The Ministry of Industry and Trade in today’s Russia has generally become a super-ministry. The agency deals with almost all industries (except the extractive industry in the oil and gas sector, which is under the Department of Energy).

In the USSR in some years there were up to three dozen ministries and state committees in various fields of industry. And today all this is in the hands of the Ministry of Industry and Trade. Apparently, foreign trade in this ministry is in 101st place. Despite its prominent place in the economy.

It should be noted that the Russian Federation has a law related to foreign trade. It was adopted on December 8, 2003 and is called “On the basics of state regulation of foreign trade activity” (N 164-FZ). For some reason, almost no one remembers him today. It belongs to the category of those that are usually called decorative.

And even as decorative today, in the conditions of the sanctions war of the collective West against Russia, it is unacceptable. Article 4 “Basic principles of state regulation of foreign trade activity” lists 13 principles. The list begins with the following principle: “state protection of the rights and legitimate interests of participants in foreign trade activity, as well as the rights and legitimate interests of Russian producers and consumers of goods and services”.

Simply put, this is the principle of the priority of the interests of the participants in foreign trade activity. Almost like the primacy of human rights over the interests of society. None of the thirteen principles say anything that foreign trade should serve the interests of society and the state (decency only says that they should be taken into account).

And we see that the participants in foreign trade realize, first of all, their interests, which, to put it mildly, do not always coincide with the national ones. Forcing the export of goods and services by private companies is often not intended to provide the country with the necessary currency to purchase vital goods, but to leave the resulting currency abroad. In some England, America or offshore jurisdiction.

Under the new conditions, radical changes must be made to the 2003 law. It is even better to write and pass a new law because of the special importance of foreign trade. We have the concept of “strategically significant enterprise (company)”. It would also be necessary to introduce the concept of “strategically significant sector (industry)”.

The defense industry should take first place in the list of such strategically important sectors of the economy. And second place can be claimed by the foreign trade sector, as here a complete restoration of the state monopoly, similar to the one that existed in the USSR, is necessary.

The proposed new law should be called the Law on the Establishment of a State Monopoly on Foreign Trade. It should provide for the creation of a full-fledged Ministry of Foreign Trade of the Russian Federation, which would include specialized state-owned export and import companies.

First on the list on the principles of foreign trade should be put the priority of state interests in planning and conducting foreign trade operations. And the principle of ensuring balanced foreign trade should also follow from it.

Translation: ES

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