WWW.DISSERS.RU


...
    !


Pages:     | 1 |   ...   | 3 | 4 || 6 | 7 |   ...   | 26 |

Fig. 19. RF trade balance and oil price index in 1995 through III quarter of The increase in foreign holdings was offset by the changes in balances on the following accounts: net import of nonfactor services (US $ 8.7 billion), investment income paid on direct and portfolio investment in Russia (US $ 4.7 billion), repayment of debt securities and repurchase thereof on the secondary market by federal authorities (US $ 16.7 billion), direct and portfolio investment abroad, other investment in foreign holdings (about US $ 16.5 billion representing the increase in balances on foreign accounts and deposits, extended trade credits and advances, the increase in non-residents overdue indebtedness and non-residents mln $ INSTITUTE FOR THE ECONOMY IN TRNSITION http://www.iet.ru indebtedness relating to non-repatriated export proceeds and non-repatriated import advances), as well as accumulated reserve assets (US $ 14.4 billion). Besides, the negative balance on net errors and omissions made US $ 8.7 billion.

Therefore, in 2002 there was observed the same ratio between assets and liabilities as in preceding years: a growth in foreign holdings determined by the large amounts of the trade balance not offset by considerable borrowings was the source of repayment of accumulated over preceding years indebtedness to non-residents, replenishment of Russian foreign holdings, and other forms of capital outflow.

Among the operations primarily financed at the expense of the surplus of the balance of trade there shall be pointed out not only changes in liabilities to non-residents, but also an increase in foreign holdings of Russias residents, what has for a number of years remained an important way to utilize residents holdings obtained as a result of the active balance of current account. While net liabilities to non-residents by end-year remained at the practically same level, net foreign holdings of Russian residents had increased by US $ 5.5 billion over the year (at the same time official assets declined by US $ 14.4 billion, while foreign holdings of banks and non-financial enterprises increased by US 16.8 billion). The major types of Russian foreign holdings, which grew most significantly in 2002, were balances on current accounts and deposits, increase in non-residents indebtedness relating to non-repatriated export proceeds and non-repatriated import advances (totaling US $ 10.6 billion), as well as direct and portfolio investment (US $ 2.8 billion).

As concerns the increase in the Russian foreign holdings, it is necessary to note the problem of capital flight. It is well known that some foreign holdings of residents in the form of overdue indebtedness and indebtedness relating to non-repatriated export proceeds and non-repatriated import advances, as well as a portion of resources on the Net errors and omissions account of the balance of payments may characterize unregistered outflow of capital from the country. It may be assumed that in the case the balances of these accounts have been negative over a long period of time, the dynamics of this indicator may characterize the dynamics of unregistered outflow of capital from Russia. In 2002, basing on the aforesaid indicators, the unregistered outflow of capital remained practically at the same level. While in 2001 the balance of the Net errors and omissions account made US $ -8.5 billion, in this indicator was at US $ -8.7 billion. A slightly different pattern may be observed in the course of analysis of the sum of net errors and omissions, overdue indebtedness, and indebtedness relating to non-repatriated export proceeds and non-repatriated import advances: this indicator was at US $ -19.1 billion in 2002, while in the preceding year this amount made US $ -9.9 billion. In other words, basing on the latter indicator it may be suggested that unregistered outflow of capital from the country somewhat increased. However, concerning these estimates it shall be stressed that, first, the analyzed indicators may be regarded only as indirect indicators of the dynamics and not of absolute amounts of illegal outflow of capitals, and, second, the increase in both overdue indebtedness, and net errors and omissions might result from the growing value of exports, what in turn might bring about a proportional increase in indebtedness relating to non-repatriated export proceeds and non-repatriated import advances, and account for statistical discrepancies encountered in the process of estimation of the base indicators of the balance of payments.

In the course of the analysis of the Russias balance of payments it is necessary to point out that, similarly to the preceding year, the amount of the favorable balance of trade proved so significant that in spite of considerable amounts of payments aimed to diminish RUSSIAN ECONOMY in trends and outlooks Russian liabilities to non-residents and the growth in Russian foreign holdings the reserve assets also grew: in 12 months of 2002 this indicator increased by US $ 11.4 billion (the most considerable increase - US $ 6 billion was registered in the 2nd quarter). However, the actual increase in reserve assets was below the respective indicator registered in 2000, when gold and forex reserves grew by US $ 16 billion the maximal increase observed over the years of monitoring.



As concerns possible future changes in the indicators of the Russian balance of payments, the prospects for 2003 remain rather vague, first, due to the mentioned above dependence of the balance of trade on world oil prices, it may be presumed that changes in foreign holdings of residents resulting from this type of exports depend on the business situation on world markets of raw materials, for instance, on the developments in Iraq.

Second, it is necessary to take into account the foreign creditors demands to repay the Russian debt. According to the law on the federal budget for year 2002, the expenditures of the Russian Federation for repayment and servicing of the external debt shall make US $ 17.billion. This amount exceeds the actual payments made in 2002, when the federal government assigned about US $ 15.2 billion for repayment and servicing of the public debt (not including US $ 1.5 billion for repurchase of Russian debt securities on the secondary market). In this situation it may be presumed that in the case high oil prices persist in 2003, the Russian authorities will be able, similarly to the preceding years, repay and service the debt at the expense of high values of the favorable balance of trade. In conclusion, it shall be pointed out that the trend towards an increase in the rates of real Ruble appreciation, noticeable over the last few months, may negatively affect the Russian balance of payments. In the case the developments on the world oil markets are unfavorable, Russia, in contradistinction to the last year situation, would not be able to anticipate the payments related to the repayment and servicing of the public external debt.

INSTITUTE FOR THE ECONOMY IN TRNSITION http://www.iet.ru 2.3. Public Finances 2.3.1. State Budget General Description of the Budgetary Situation in According to the Finance Ministry, the revenues of the federal budget in 2002 made Rub. 2202.1 billion, or 20.1 per cent of GDP, what by 2.5 p.p. exceeds the figures registered in 2001. The revenues primarily grew due to increasing tax revenues, which made 18.6 per cent of GDP in 2002 and grew by 2.3 p.p. as compared with the preceding period. However, it shall be taken into account that in 2002 the single social tax (SST) was included in the composition of federal budget revenues. Therefore, the level of tax revenues of the federal budget minus SST not only failed to grow in 2002 in comparison with the figures registered in 2001, but significantly declined (by 0.7 p.p. of GDP in comparison with the level registered in the last year). Accordingly, budgetary revenues (without SST) also fell and made Rub. 1862.billion (17.0 per cent of GDP), what is by 0.6 p.p. of GDP below the level of 2001.

The share of tax revenues in the structure of revenues of the federal budget for remained at the level registered in the preceding year 77 per cent (without SST, or 92 per cent with SST), while non-tax revenues (taking into account revenues of budget targeted funs, primarily the Targeted Fund of the RF Ministry of Atomic Energy) made 7.6 per cent of the total revenues, declining somewhat in comparison with the figures observed in the preceding year (8.1 per cent of the total revenues).

It shall be pointed out that in 2002 there was observed a certain increase in tax revenues of territorial budgets (by 0.6 per cent of GDP). As concerns the total revenues of territorial budgets, they also grew by 0.6 per cent of GDP. On the whole, it may be noted that in the level of revenues of territorial budgets was at its record high over the last five years.

At the same time, budgetary expenditures increased to 18.7 per cent of GDP in 2002, what is by 4 p.p. above the indicator registered in the preceding year. Even without transfers to the Pension Fund for financing of the base component of the labor pension at the expense of SST, the level of expenditures was by 1 p.p. above the level of 2001. Accordingly, in 2002 the level of budgetary surplus declined to 1.4 per cent of GDP (as compared with 2.9 per cent registered in 2001). In this situation, the financing of the financial reserve of the federal budget was possible at the expense of privatization of state owned blocs of shares in Lukoil and Slavneft (about 0.7 per cent of GDP) and at the expense of unutilized balances on accounts of recipients of budgetary funds (about 0.5 per cent of GDP).

Expenditures of territorial budgets also grew in 2002 by 1 p.p. of GDP in comparison with the figures registered in 2001 (from 14.3 to 15.3 per cent of GDP). For the first time since 1998 the aggregate budget of RF subjects has been balanced with a deficit, which made of 0.4 per cent of GDP.

In 2002, the consolidated budget was administered with a proficit (1 per cent of GDP).

The level of budgetary revenues was somewhat below the level registered in the preceding year (29.0 % in 2002 (without SST) as compared with 29.3 per cent in 2001), however, it exceeded the figures observed in 2000 and earlier. At the same time, the expenditures of the consolidated budget were noticeably higher than over last four years, even without SST transferred to the Pension Fund from the federal budget (28 per cent of GDP).

RUSSIAN ECONOMY in trends and outlooks A few major factors, which are discussed below, has been behind a decline in tax revenues. On the whole, such dynamics of revenues of the budgetary system, primarily as concerns the federal budget, may be explained by the following developments. First, world oil prices were volatile over the year and significantly below the level estimated for the budget.

Second, changes in taxation of profits of organizations and VAT negatively affected the amount of tax revenues.

Table Administration of revenues and expenditures of the federal and territorial budgets (in % of GDP) 1998 1999 2000 2001 Federal Budget Tax revenues* 9,3 11,6 14,3 16,2 18,Including SST 3,Revenues 11,0 12,8 15,5 17,6 20,Expenditures 13,8 13,9 14,1 14,7 18,Including transfers to Pension 3,Fund at expense of SST Deficit -3,2 -1,1 1,4 2,9 1,Territorial Budgets Tax revenues* 11,9 11,2 11,8 10,8 11,Revenues 14,5 13,6 14,1 14,3 14,Expenditures 14,7 13,6 13,7 14,3 15,Deficit -0,3 0,0 0,5 0,0 -0,Consolidated Budget** Tax revenues* 21,2 22,8 26,0 27,0 29,Revenues 24,0 26,8 28,3 29,3 32,Expenditures 27,5 28,0 26,4 26,4 31,Deficit -3,5 -1,1 1,9 2,9 1,* Before 2001 there were included revenues of Federal Road Fund, Fund of Reproduction of the Mineral and Raw Materials Base, Fund of Management, Study, and Repro-duction of Water Biological Resources, Federal Fund of Rehabilitation and Protection of Water Resources, Federal Ecological Fund.

** Excluding interbudgetary transfers.

Source: RF Finance Ministry, authors calculations.

At the same time, the budgetary situation was positively affected by non-tax revenues.

For instance, share dividends, proceeds from state owned property and privatization, and proceeds of external economic activities exceeded targets. However, it shall be taken into account that these revenues make only a small share in the total amount of revenues (below per cent of the total amount of federal budget revenues).

In 2002, the amount of indebtedness to the budgetary system increased in comparison with the figures registered in 2001, what may be explained by the inclusion of the SST related indebtedness relating to the share of SST, which prior to 2002 had been due to the budget of the Pension Fund and since 2002 to the federal budget. Without taking into account this share of indebtedness, the deflated increase would have made 8 per cent over the first months of 2002 (0.3 per cent of GDP).

It shall be pointed out that the dynamics of arrears in the indebtedness composition were positive. In real terms, tax arrears related to the consolidated budget have diminished more than 1.5 times since 2000. These developments may be explained, on the one hand, by the implementation of measures aimed to restructure the arrears, and, on the other hand, coercive INSTITUTE FOR THE ECONOMY IN TRNSITION http://www.iet.ru measures undertaken to exact the indebtedness due to the budgets of all levels, the latter resulting in Rub. 174.8 billion (2.2 per cent of GDP) of repaid indebtedness in 2002.

Table Tax indebtedness to the consolidated and federal budgets 1999 2000 2001 Indebtedness to consolidated budget (Rub. billion) 378 464 475 Including arrears 343 365 245 Share of arrears in indebtedness 91% 79% 52% 40% Annual increase in indebtedness (in real prices) in % of the amount of 25% 3% 9% indebtedness by the beginning of the year Annual increase in indebtedness in % of GDP 1,2% 0,1% 0,4% Source: RF Tax Ministry, authors calculations.

In spite of the fact that in 2002 oil prices were below the estimates used to calculate budget targets, they were above the average price of long standing US $ 19 per barrel14, what affected execution of budgets of all levels. According to our estimates, in tax revenues of the enlarged government budget (including revenues of targeted budgetary funds formed at the expense of taxes), the share of tax revenues presented in Table 6 may be explained by the oil prices being out of line with the average price of long standing (US $ 19 per barrel):

Pages:     | 1 |   ...   | 3 | 4 || 6 | 7 |   ...   | 26 |





2011 www.dissers.ru -

, .
, , , , 1-2 .