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Wednesday, March 14, 2018

“The Central Bank and the Finance Ministry will be forced to become development institutions”

Vladimir Putin has replaced the head of State Corporation “Bank for development and foreign economic Affairs” (VEB). Is Vladimir Dmitriev, who headed the group for 12 years, appointed Vice President of Sberbank and former personnel officer of Yukos Sergey Gorkov. However, nothing surprising in this. Of course, the hole in the budget of VEB, according to media reports, up to 1.3 trillion rubles. But these are consequences of the contracts associated with the Olympics in Sochi and the acquisition of assets in Ukraine. There is another problem. Almost all the so-called development institutions (owned and VEB), which, counting the President, more than two dozen, have become, again in his words, “garbage with bad debts”. And need “cleaning”. That is money on the growth of the state gives, and a lot, and GDP continues to fall.

photo: Gennady Cherkasov

It is no secret that in Russia a successful and effective can be only manual control. This proved literally centuries of existence of our state. Another thing is that not all the rulers have taken the challenges of the time. Otherwise we would not have so many revolutions.

The introduction of a system of governance in “zero”, the development institutions initially took literally with a Bang. After all, a part of the budget money went not to the spending of the officials and the disadvantaged, and to encourage economic growth. Created a lot of them. Together with the regional structures are generally more than 200. It would seem that now would be to clip coupons. But no — GDP is rapidly declining. Why?

Answers quite a lot. But the main structure of the economy. She, under a “manual” to political office, is sverhmalolitrazhnoy government. There is no place for healthy competition, but corruption is flourishing. And separate plantings of governors then nothing will fix it.

According to various estimates, the state assets in Russia are now 50% to 70% of GDP. A bit of overkill. Until 2003, according to OECD, the government owned only 20 percent of the national property.

Glory to God, it’s gotten to the Kremlin. Announced mass privatization of oil companies and state-owned banks. But who in the crisis and Western sanctions will buy?

It’s time to think about the development institutions. But it was not there. Take for example “Rosnano”.

July 1, 2015, the Investigative Committee opened a criminal case on the embezzlement of 220 million roubles from the funds of this Corporation against three former executives of the Corporation Leonid Melamed, his former Deputy Andrei Malyshev and former CFO Svyatoslav Ponurov. The investigators believe that 220 million roubles the state Corporation have illegally paid a private company for actually not rendered services. Actually this money allegedly was the “Golden parachute” retired Melamed.

The “Rosnano” has long demonstrated its inefficiency. In 2014, the net loss of the Corporation amounted of 14.57 billion on revenue of 6.3 billion Data from last year yet. Recently bankrupt was recognized as the plant RUSNANO for the production of lithium-ion batteries. “Liotech” earned in December 2011 as the joint venture “Rosnano” and Chinese Thunder Sky Group. The total investment amounted to 14.8 billion rubles, but the plant never achieved its design capacity. In 2013, left the project the Chinese partner. Now the plant is unable to pay debts. But the head of “RUSNANO” Anatoly Chubais at the new year party boasted that the company “very much money”.

In conditions of deepening crisis, the money squandered is impossible in principle. It’s hard to say, to replace Chubais in a more effective Manager, as Dmitrieva. More importantly. Clearly, the development institutions will thin out, and very seriously. The fact that many of them cost money held on Deposit in commercial banks instead of their real use. The Finance Ministry has already warned that this year that practice will cease. To start with, all their deposits will be transferred to the Federal Treasury, and on July 1 is not used in time the funds returned to the Treasury.

However, there are inspiring examples. So, only set up last year under the Federal budget, the Fund for support of industry, which contributed a total of 20 billion roubles, collected, first, more than 700 billion roubles of applications, and secondly, his funds managed to build the first plant.

Further — more. The Central Bank in the last two years has made preferential 6.5% to 300 billion rubles on a landmark industrial projects.

But still it is a vicious circle. Commercial banks there are no low cost loans. And without that, no growth. The economy is strangling gasmonopolist. Privatization has stalled. Only the financing of individual projects of the Central Bank and Ministry of Finance. But the government of Dmitry Medvedev, prominent assets in the economy does not invest. In response, GDP continues to fall. Clearly need breakthrough solutions. No.


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