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History of the world economy - Polyak GB

35.3. Factors that have contributed to deepening the crisis

The reforms that began after the collapse of the Soviet Union led to a deepening economic crisis. Firstly, such drastic changes connected with the change of forms of ownership and political institutions can not be painless. Secondly, the reforms were carried out hastily, without thorough methodological and organizational training. Thirdly, the centralized planning and distribution management system was destroyed, and the formation of market relations takes time.

As a result, the reforms carried out did not justify themselves. Instead of efforts to restructure the industry, convert the military-industrial complex, increase output, which is necessary for the national economy and, ultimately, the population of the country, the main emphasis in the reforms was on the implementation of a monetary policy aimed at reducing the money supply in the country. In practice, this has been reduced to implementing measures to reduce the growth rate of the L / 2 unit, i.e., the money supply indicator. Indeed, if in 1996 this indicator grew by 34% for the year, then in 1997 - by 30%. Inflation rates also decreased. In 1996, the inflation index rose by 21.8%, and in 1997 - by 11%.

But at the same time, there was a shortage of money in the country, which caused widespread use of money substitutes, for example, bills of exchange, barter, that is, exchange of goods between producers, and mutual offset between them, as well as between them and the budget.

In turn, this led to a weakening of state financial control, increased opportunities for tax evasion, and ultimately to significant inconsistencies in taxes, unsecured budgetary expenses, and many months of delay in paying wages in the public sector.

With a view to replenishing the retiring taxes, the Government began to issue state short-term obligations (T-bills). For their fastest implementation, high yield rates were set. The budget revenues from the sale of government securities have become a dynamic source of the federal budget. In 1998, the public debt amounted to 500 billion dollars, including 130 billion - external debt and 370 billion - domestic debt. The share of federal budget expenditures on servicing the public debt was 27% of total expenditure.

An important factor that had a negative impact on the country's economy and the psychological climate in Russian society was the criminalization of many aspects of life.

For all the centuries-old history of Russia in the country there was no such level of criminalization of the society. From the late 70's and early 80's, criminal groups, almost eliminated during totalitarianism, united by common economic interests, began to penetrate all spheres of the country's economy. In the 1990s, not only the sphere of circulation was under their control, but also to a large extent the production sphere: industry, construction, transport, etc. Territories of the country, regions, cities are divided into zones of influence and control of criminal groups, and enterprises, organizations are taxed Tribute in their favor. Many enterprises became the property of people who left the environment of criminals. On the basis of corruption and threats, the underworld connected with a part of the bureaucracy, the credit system.

Unbelievably high interest for a loan, payments to criminal elements put a heavy burden on enterprises and organizations that included these costs in prices for their products and services. All this served as one of the reasons for the increase in prices, the decline in the competitiveness of domestic products in the domestic market of the country, the decline of the Russian economy.

Huge amounts of money in the country, according to some calculations, more than 50%, were in the shadow economy, out of state control and, therefore, taxation.

Strengthening the positions of the criminal world in the country's economy was reflected in the strengthening of its influence in the socio-political life of society. The widespread occurrence was the participation of criminal elements or their proteges in political life, in the work of representative and executive authorities. In art, especially in cinema, literature, popular music, the criminal subject became often predominant.

The influence of a number of negative factors was reflected in the reduction of the most important economic, demographic and social indicators in the country.

For the period 1992-1997. In Russia, the volume of GDP fell by 40%, industrial production - two times, agricultural products - by 35%. The average annual number of employed in the national economy decreased from 72.1 million to 67.1 million. Real incomes of the population decreased by 43%, and the proportion of residents with incomes below the subsistence minimum was 25% of the total. The commissioning of residential buildings fell from 29.2 million square meters. M to 9.5 million square meters. M. If in 1992 the natural increase in the population (ie the difference between the number of births and the number of deaths per 1000 inhabitants) was 1.5 ppm, in 1995 it was 5.7 ppm. Despite the fact that 3.8 million people have come to the country for these years, the number of Russians has decreased from 148.3 million to 147.9 million.

Given the increasing budget deficit, lack of financial resources, the war in Chechnya, which began in late 1994, further exacerbated the economic situation. Already at the initial stage, military actions absorbed about 1% of GDP. Despite the costs, death of servicemen, material losses and destruction in Chechnya, the war led to the separation of Chechnya.

In the second half of the 1990s, the economic crisis in Russia deepened. It was based on a significant decline in production, incomparability of taxes, lack of funds in the budget system of the country, increased budget deficit. The federal budget deficit, which received half of all budgetary funds of the state, was covered mainly due to the issuance of internal and external obligations. In order to attract investors, especially foreign investors, the Government has established a high profitability of these securities, amounting to 120-150%.

High interest rates on state securities encouraged commercial banks to invest money not in production, but in buying securities and speculating them on the stock market. At the same time, with the increase in the issuance of securities, the state debt grew, to pay off, an increasing portion of taxes collected to the budget was sent. Thus, an expanding circle was created; When money received in the budget from the issue of securities, together with the collected taxes, was increasingly directed to repayment of the state debt, that is, they became incomes of commercial banks and, therefore, did not enter the production sphere.

To this should be added a significant decline in world markets since 1997, the price of energy. In 1998, exports from the country decreased by 17%, and imports increased by 20%. With such a multidirectional tendency to strengthen the economy, the government needed to timely reduce the ruble's exchange rate against the dollar and thereby avoid panic in the market.

In these circumstances, the Government and the Central Bank take a number of insufficiently justified decisions. On August 17, 1998, the Central Bank announced the expansion of the currency exchange rate corridor, ie, almost the devaluation of the ruble; On a moratorium on payment by banks of foreign currency debts to foreign creditors; On freezing of payment on state short-term obligations.

The consequences of such actions were:

1) the withdrawal of foreign investors from the Russian securities market and the loss of one source of income by the budget;

2) the difficult financial situation of banks that invested significant amounts of their depositors in state securities, which led to the banking crisis. In turn, the banking crisis paralyzed settlements between enterprises, as well as between them and the budget, which further exacerbated the problem of tax collection to the budget;

3) purchase of dollars by the banks to replenish their reduced liquid assets, which caused an increased demand for them and an increase in the price of the currency. The Central Bank stopped in connection with this support for the ruble exchange rate in the currency market, ceasing to sell dollars. For two weeks, the dollar's rate has tripled. With the growth of the dollar, prices in the consumer market grew by three to four times.

All this was the reason for the financial crisis that erupted in August 1998 , the deepening of the general economic and political crisis in the country, which manifested itself in the change of government, the leadership of the Central Bank. The country again found itself in the situation of the first stage of reforms.

Thus, in the third millennium of a new era, Russia is economically weakened, with a heavy load of unresolved social problems, with a huge potential for dissatisfaction with the existing situation in the country.

Questions for repetition

1. Tell us, how was the restructuring of the economic mechanism in 1985-1990?

2. What are the economic and political reasons for the collapse of the USSR?

3. Describe the reforms carried out in 1991-1996.

4. What factors have had a negative impact on the state of the Russian economy?

5. Explain the reasons for the 1998 financial crisis.