General Director of the BusinessDrom Analytical Agency, Chairman of the OPORA RUSSIA Committee on Financial Markets
The expert community is unanimous: the capital accumulated by the population and business is the foundation for large-scale privatization and an increase in the rate of domestic borrowing. However, the critical question is how to implement the project, what to focus on and how to avoid the sad mistakes of the past.
Recall that at the beginning of April Andrey Kostin, the head of the largest state – an important nuance – bank made a policy article about restarting the economy through a large-scale build-up of public debt and privatization. The professional community took the idea, not surprisingly, positively. Probably, the most important thing here is that the project is being seriously discussed by our authorities, which means that we can talk in detail not about the declaration, but also calculate the nuances on which, as you know, the success of the entire enterprise depends.
Let’s start with the Russian public debt, which is indeed very low – just over 15%, despite the fact that it is above 84% on average across countries, and has been a serious problem for developed economies for decades. Konstantin Vorobyov, an economist and member of the Fund of Directors of the IDA, calculated that even doubling the rate of OFZ placement by the end of the decade would not be a headache: only about 30%. The nuance here is that the acceleration of the pace of borrowing will inevitably lead to an increase in the premium for investors, which, in turn, will affect the cost of capital throughout the economy. This is a major revision of the current monetary policy. Are the Bank of Russia and the Ministry of Finance ready for this? After all, in this case, pro-inflationary risks, as well as risks of slowing down business activity, will declare themselves. Thus, it is a double-edged sword.
“Our government has been filling the pockets for many years, squeezing liquidity, but it seems that the time has come to spend it – for the good of the country. Isn’t the current geopolitical challenge faced by our country a sufficient condition? By the way, and Anton Siluanovthe finance minister, recently acknowledged that the low level of public debt is “room for maneuver and an opportunity for borrowing in the future,” concludes Arseny PoyarkovPresident of “BusinessDrom” and head of the working group “OPORA RUSSIA” on the problems of blocking accounts.
The main issue for the new wave of privatization is to avoid the sad stories of the 90s. Therefore, the goal of privatization should be stated not so much in replenishing the budget, but in normalizing the relationship between the population and the authorities. That is, we need to reanimate that same lost trust.
– It is possible to overcome distrust between the population and business, – I am sure Sergei GrishuninManaging Director of the National Rating Agency (NRA).
For example, you can actively promote preference shares with a guaranteed dividend. In addition, the company may provide a discount or special conditions for the purchase of goods and services to citizens who have bought shares. Other proposals from the NRA include tax incentives for shareholders who actually invest for a long time, for example, for a period of more than 3 years.
Another common practice abroad is the involvement of employees of privatized companies in the management – moreover, the financial literacy of the population has grown significantly in recent years, which means that new shareholders will be responsible for their investments.
If our authorities, together with the professional community, manage to create conditions for the mass entry of domestic businesses to the stock exchange, we will be able to create not only an analogue of bank funding for the economy, but also create conditions for a fair assessment of shares.
Now a few words about Andrei Kostin’s thesis that “there is money in the country.”
The NRA calculated that only the population has about 40 trillion rubles in their hands, this is not counting the free funds of banks, which are estimated at about 20 trillion rubles:
– This is a huge amount of money that can be invested in the rapid development of the country – confirms Sergei Grishunin.
However Yuri Belikov, managing director of Expert RA, suggests not to rush. According to him, this money is a necessary cushion of liquidity in case of unplanned expenses that arise more and more often:
– Resources can be released only when the economy stabilizes and until the accuracy of at least medium-term forecasting of the state of the operating environment is restored.
In addition, our economy has a large share of quasi-state companies – the line between public and private capital has blurred. And in this sense, it will not be easy to distinguish real privatization from the redistribution of money between various state and near-state structures, reminds Expert RA.
The NRA is confident that the state should go beyond privatization and create conditions for the resumption of primary and secondary placements of shares and private companies. Moreover, the infrastructure for this is available – this is the Moscow Exchange.
In this regard, it is important that the stock exchange does not become a place for speculation, but a tool for improving our citizens’ well-being. This is an ambitious but achievable goal.