each economy simply must have a certain margin of safety.As for the history of Russian strength, the next cycle is over today.Initially it supported the economy of the great state stabilization fund, created in 2004.In 2008, it was completely restructured and renamed the Reserve Fund and the National Welfare Fund.He acted as a rational continuation of the program "development budget", created in 1998 to finance the large-scale industrial projects that were supposed to serve as an engine in a crisis.
Primary idea of Stabilization Fund
innovative format of the Stabilization Fund is completely contrary to the fundamental idea of the project "development budget".It was based on the formation of the reserve, which was to compensate, if necessary, the budget deficit due to the sudden drop in oil prices, the sterilization of excessive dollar revenues from oil sales.Controlling inflation should be carried out thanks to invest in foreign assets.In the medium term, the Stabilization Fund should act as a reserve for the elimination of problems associated with the financing structure of public pensions.In fact the Reserve Fund and National Welfare Fund act as specialized monetary fund, which is widely used today in order to stabilize the state budget as a result of the reduction of income.It can also be used in the state needs, but in the long run.
Why Russia Fund?
Reserve Fund Russia has developed over many decades due to the fact that the state budget has a strong dependence on the conditions of external factors.The well-being of the world depends on commodity prices.Today, when the country imposed tough sanctions from Europe and critically low oil prices from the sale of which is dominant in the replenishment of the budget, it helps to survive the country collected a reserve.It allows you to keep the rate of the national currency and becomes the basis for implementation of the State's obligations to the population.If Russia had no reserves, the country would have long been faced with the phenomenon of default.
stages of provisioning
first stage of formation of the Reserve Fund was launched in 2003.It was formed by, which received money earned from the export of natural resources.Then we specify that a special account is not directed oil revenues, and profits.That is, the rest of the money from the sale of fuel, which were not provided enough optimistic forecasts.The second stage of the formation of the reserve - is the creation of the Stabilization Fund in 2004, which was in fact a part of the federal budget.Due to the fact that the domestic economy had a strong binding to the commodity market, the formation of "safety cushion" became a prerequisite for the further prosperity of the nation.The last step in the formation of the reserve - a Reserve Fund and the National Welfare Fund.
stabilization of the economy by the Fund
export capacity of the state is significantly affected by the strong binding to the export of oil and gas.The situation puts a negative impact on the status of the state and strikes at the production facilities, which are export-oriented.In the closed economy the source of the funds of natural format by exporting goods and services.All incoming cash flows are blocked by petrodollars.Reserve Fund Russia today is responsible for ensuring a balance in the federal budget, as the price of oil today at several orders of magnitude lower than had been budgeted for the 2014-2017 year.The Foundation is responsible for the binding of excess liquidity, reducing inflationary impact, eliminate the effects of the impact of price hikes on the world market of raw materials on the domestic economy.You can summarize and highlight the main three functions of the fund:
- overlap deficit of the Russian budget.
- prevention of Dutch disease in the economy.
- financing of pension savings and the overlap of the budget deficit of the Pension Fund.
Purpose wealth funds and cash flow
theory - is one thing, but the practice and history suggests a slightly different purpose reserve.Reserve Fund are directed to enforce state obligations while reducing consumables such as revenues from oil and gas sector.The volume of reserves set at 10% of the estimated for the coming fiscal year GDP.Initially, the cash flows are directed to the account of the Treasury.The missing funds from the non-oil sector is covered by redirecting money through oil and gas transfer.This is followed by the filling of the Reserve Fund.After its volume corresponds to 10% of the funds received, the cash flow is redirected to the National Welfare Fund, which will compensate for the deficit of the pension budget.The reserve fund remains intact until such time as the proceeds from oil and gas sector of the economy will be reduced significantly.Most of the savings capital reserve converted into financial assets and currency.This debt of international organizations and securities, deposits in foreign financial institutions.
How is the flow of funds in the reserves of the country?
Reserve Fund and National Welfare Fund is formed not only by the excess profits from oil sales.Replenishment of capital is due to:
- tax on mining;
- export duty on crude oil;
- fees that are charged for the export of products made from crude oil.
Another source of revenue - is the profit from the management of the latter.The size of the reserve fund is controlled by taking into account the funds in separate accounts, which are opened by the Treasury in the Central Bank of the Russian Federation.All credit and debit transactions on the account held by the Ministry of Finance of the Russian Federation in accordance with the law.
Special control mechanisms of the fund
As mentioned above, the National Welfare Fund acts as part of the federal budget.At the same time the management of the reserve is carried slightly different format than the financial assets in the federal budget.The main objectives are to manage money their safety, as well as in stabilizing the income level of their transformation in the assets in the long term.All the assets, which can be transformed by means of clearly defined by the Budget Code of the Russian Federation.Help National Welfare Fund is instantly in the event of shortages.Information on the receipt and expenditure of funds from the reserve each month is published in the media.
Dimensions savings Russian government
Ministry of Finance has informed the public about the fact that over the past two years, the National Welfare Fund increased by about 51.3% and the Reserve Fund increased by 72.9%.The reserve fund has increased by 2.085 trillion rubles, and by 1 January 2015, despite the prevailing crisis was 4.945 billion.In dollar terms, both the reserve is estimated at 165 billion dollars.Positive capital gains overshadowed by a statement of the Accounting Chamber, which was made in October 2014.According to the agency, while maintaining the pace of the fall in oil prices in the international market and the degradation of the country's economy, Russian National Wealth Fund will be exhausted in the next two years.
Recent data from the Ministry of Finance
On April 1, 2015 the size of the Reserve Fund amounted to 4.425 trillion rubles, or 75.7 billion dollars.National Welfare Fund is equal to 4.436 trillion rubles, or 74.35 billion dollars.During the month of March there were reductions SWF 244 billion rubles, and the Reserve Fund - 295 billion rubles.Recall that in late March, the State Duma adopted the budget crisis, where conditions were specified expenditure of funds.According to preliminary calculations, the amount of the reserve by the end of 2015 will be only 4.618 trillion rubles.It is planned to spend about 864.4 billion rubles for the development of infrastructure projects for the reconstruction of the economy of the state.
