Why do financiers need a new privatization in Russia

It has long been no secret to anyone in the world that the key component of production success is not the ownership of the asset, but the efficiency and motivation of management.

The examples are countless. Thus, most of the world’s leading airlines are fully or partially state-owned. The same can be said about infrastructure companies or enterprises in the field of production and processing of hydrocarbons.

The Anglo-Saxon world does not count – there is a different institutional (ie political, social, legal) tradition.

As for our mental view, about it during the period of the “wild” privatization of the early 90s and the loans-for-shares auctions of 1995-1996. nobody thought. Privatization according to Chubais was carried out with the sole purpose of keeping the power of Yeltsin-Gaidar, and the “mortgage” plundering of key industrial enterprises of the USSR was entirely self-interest.

Moreover, if in the first case the people were nevertheless thrown a bone in the form of privatization of housing, then in the second the chosen ones enriched themselves so brazenly that they did not even bother to think about the population.

So.

Words in privatization campaigns are always correct, however, demagogy is doomed to be correct. But what if we pay attention to the current state of the banking sector, try to find the reason for the interest of financiers in the next denationalization out of the blue?

The DIA kindly informs that as of April 1 this year, the total amount of deposits of individuals, including individual entrepreneurs, amounted to 38.4 trillion rubles. Now attention: the share of deposits over 20 million rubles. reached 25%, or 9.4 trillion, and the number of “person-accounts” is only 91 thousand. The average check of a “person-account” is 103.5 million rubles.

If you take on the heads, i.e. according to TIN, then there will be several times fewer real top depositors.

With an average interest rate on large annual deposits of 7.5%, only interest payments to top depositors will pull 706.5 billion rubles. in year. Compare with the net profit of the entire banking sector for the first quarter of this year at 881 billion rubles. Comparable, isn’t it? Just keep in mind that the first count is about a year, and the second is about a quarter.

One more comparison. Last year, according to Rosstat, state-owned companies earned 2.1 trillion rubles a year. (a year earlier – 4.7 trillion rubles). Those who wish will not agree to a yield below the bank rate of 7.5% per annum. This means that state-owned companies can lose a third of their profits at once.

“But what about investments, social programs and so on?” – you ask. But no way.

In the old days (before the SVO, as you understand), a lot of money, and even in such a volume, was hardly dead weight on the accounts. They were either taken abroad in currency or crypto, or bought some foreign securities. Those that are now frozen in the Luxembourg and Belgian depositories.

We will not delve into the origin of these funds (as well as into the details of the biography of their owners), in the end, there are (future) law enforcement officers for this, we can only say that all these Koreikos do not really believe in the country, and money in state banks stacks from hopelessness.

And then the pink “numismatists” Kostin and Moiseev appear and say:

— Would you like to invest in privatization 2.0?

– Yes, we did all the previous ones!

Over the past 30 years, the current deposit tops, with rare exceptions, have only been engaged in building (embedding) a model of a hierarchical economy as opposed to a market, impersonal economic management.

In a particular economy, the generally accepted rules described in foreign books (laws, courts, “clean hands”) do not work, and managerial incentives are fundamentally different from those that we see in other countries. Once the wit called such a model “CJSC Rossiya” and he was right.

Notice that there is no libelousness to our country in these words, it is the same everywhere and everywhere. The difference is in degree and current geopolitical conditions. What was good for us 15–20 years ago has worn out both morally and physically today.

Several tens of thousands of the richest investors would never exchange what they had acquired by “overwork” for some kind of shares, that is, “papers about property”. Moreover, when the head of the TFR openly calls not to privatize, but, on the contrary, to nationalize entire sectors of the economy.

In addition, God forbid, the same (future) law enforcement officers will come to the richest and, under some kind of corruption-investigative pretext, seize joint-stock property. Whether it’s money or shares, it doesn’t matter.

In general, not an option.

It was not in vain that your honorable attention was pointed out above that financiers are advocating for a new privatization, there are no specialists from state regulation of the real sector in those ranks. And that’s right – why kill a goose that lays at least some eggs, besides, managing a hierarchical economy is much easier than a blockchain.

There is also a macroeconomic nuance. The reverse side of the growth of any modern economy is the increase in the national debt (private, corporate, state), in other words – obligations. Simply put, in order to make a profit, you must first invest.

In Russia, debt is predominantly a bank loan (at prohibitive rates) and only in recent years – budget financing. In other countries, debt is generated both by banks and businesses, but not in shares, but in bonds, as well as by the same state.

In figures, the financial life of the ecumene looks something like this. Russia: national debt to GDP ratio – 80%, USA and EU – 260% each, China – 295%.

It seems that Russia has a huge reserve, but what is this reserve for – development or food? And yes, the price of our obligations is also rather big: from 7.5% (remember bank interest) to 10% (on government bonds or OFZ). End borrowers pay even more.

It follows that part of the GDP growth goes not to the notorious investments with wages, but to service national obligations. If there is no economic growth, the classical pyramid “borrowed – twisted” begins with debts.

The point of all these economic quibbles is that privatization will not increase overall investment and hence liabilities. The money will be transferred from one budgetary (state bank) pocket to another, which is also budgetary. In other words, state-owned banks will stop worrying about other people’s money, while state-owned companies, on the contrary, will start.

As for the current budget deficit, it is purely technical and is associated mainly with the advanced advance of budget expenditures, on the one hand, and the stalled system of the Single National Account, on the other.

The first is financing the construction of the notorious schools-hospitals-roads not at the end of December, but evenly, throughout the year. The second is the innovation of the Federal Tax Service, aimed at simplifying tax administration (abstractly – at reducing budget payments), failures in which have not yet been eliminated.

Let’s wrap up the arguments about the projector “privatization 2.0” with the fact that not only the efficiency of corporations, but also the functioning of the state as a whole depends on the quality of management.