Credit Debt Masochism
Today, one of the main topics of all world media is the debt crisis that erupted in Europe. The absolute and relative values of various types of debt (external, state, corporate) of such countries as Greece, Spain, Italy, other countries of the European Union and the euro zone are called. For many of these countries, public debt has exceeded 100 percent of GDP. In the eurozone as a whole, at the end of this year, the level of total public debt is estimated at 88% of GDP. They also began to recall more often the United States, whose state debt reached 100% of GDP this year.
Against the backdrop of these gigantic amounts of debt from Western countries, Russia looks just like an excellent student. For example, according to the Bank of Russia, in the middle of the current year, the state external debt of Russia (including the debts of the former USSR, as well as the debts of the constituent entities of the Russian Federation) amounted to $ 35 billion. This, in particular, is an order of magnitude less than the external public debt of such a small country like Greece. In relation to GDP, our state external debt is less than 3% of GDP. Our authorities are not averse to emphasizing as their personal “achievement” such a low level of the debt burden of the Russian state. At the same time, they like to recall 1998, when the rate of public debt reached a record level of 146% of GDP. In this regard, even “noble impulses” arise from our statesmen to help “poor Europe” get out of the pit of the debt crisis (I just wrote about this in the article “About our help to the West.” At the same time, Russia’s position as a debtor is not so encouraging as it seems at first glance.
Firstly, because for many years now the main part of Russia’s external debt has been falling not on state obligations, but on the debts of private companies (corporate debts). As of mid-2011, according to the same Bank of Russia, external corporate debts were more than an order of magnitude greater than government ones (debts of banking institutions – $ 159.0 billion, debts of other sectors of the economy – 331.7 billion. Doll.). The total external debt of the Russian Federation amounted to 538.6 billion dollars. With respect to GDP, calculated in dollars at the official exchange rate, it turns out somewhere around 1/3. A lot, although really less than in most European countries.
Secondly, it should be borne in mind that the borrowing conditions for Russia (including private companies) are, as a rule, much more difficult than for Western debtors. This is expressed in high interest rates on loans and borrowings, which place a heavy burden on the Russian economy and society as a whole. In order not to be unfounded, I will cite the official data of the Bank of Russia on payments on the external debt of the Russian Federation in recent years.
As you can see, the people of Russia are working very hard to enrich international moneylenders-bankers: about 1/3 of all exports, 1/10 of GDP, 1/3 of gold and foreign exchange reserves leave the country in the form of payments on Western loans and borrowings. Our people are working harder than the Greek, although all the talk today revolves around this small country with its high debt and the threat of state default. According to the national sources of this country, Greece’s expenditures on current expenditures on public debt (and it is almost completely external), about 7% of GDP, i.e. lower than the corresponding indicator of “prosperous” Russia. Note that in the early 80’s. of the last century, many states of Latin America and other countries of the “third world” experienced an acute debt crisis. Then they had to direct up to 40% of all export earnings to pay off their external debts. And if loan commitments exceeded this bar, they simply stopped paying. Russia has come close to this bar, but its leaders solemnly promise Western lenders to repay their obligations on time. What for? They say to raise the “credit rating” of the country. By the way, it’s funny: today, against the backdrop of the debt crisis of the EU countries (and other Western countries), it looks formally “safe”, however, it lags behind in terms of credit ratings and is part of a company of countries like Nigeria or Zimbabwe.