According to the results of last year, the level of Russia’s external debt per capita fell below two thousand dollars – for the first time since 2005, it follows from RIA Novosti calculations based on data from the Central Bank. Invest-Foresight asked Igor Nikolaev, chief researcher at the Institute of Economics of the Russian Academy of Sciences, how positive this trend can be for the economy.
– Last year, external liabilities continued to decline, reaching $1,987 per capita. Decrease over the year amounted by 8.7%. Is that good?
– It’s certainly good. But at the same time you should take into account a number of other indicators. And staying in the “everything is great” paradigm is a bad idea.
– What indicators?
– Public debt per capita is decreasing. First, we must take into account that it is decreasing in dollar terms. But the most important thing is that even the national debt, which is decreasing in such terms, may require higher interest costs for its maintenance. What is the cost of servicing this debt?
If you have a smaller amount per capita, and costs of this kind, on the contrary, are growing, then the observed tendency to reduce the size of this debt per capita should no longer be treated as a good sign.
– All countries take loans in the foreign market, no one lives on their internal funds?
– Yes, sure. Almost no country lives on its own funds only.
– The habit of borrowing cannot turn into a habit of not looking for internal reserves?
– A lot depends on the price of the issue. If borrowing in the domestic market will be cheaper, then why not pay attention to it? In this case, the motivation to take loans in the domestic market remains.
Moreover, risks must be taken into account. You can borrow in the foreign market and in the domestic one. What are these risks? After all, it is one thing to take into account the cost of servicing a loan, and even in the future. And another, for example, how much such a loan is a risky event in general?
– What risk could it be?
– For example, you chose the strategy where you determined the three-year budget, it was prescribed that you would borrow a certain amount in the foreign market. And the risks were not taken into account. What? For example, a risk that taking a loan will not be realizable at all? Or the risk that the interest will increase to such an extent that it will be very, very difficult to service the loan.
– Is it better not to borrow money in foreign markets for Russia in the existing economic realities?
– It seems to me that just the opposite – it is necessary to borrow, especially if they lend. We now have such realities that foreign financial markets have been cut off for Russia. Few actors lend money to us as a state. And if suddenly someone expresses such a desire, and even the conditions will be quite acceptable, then it is imperative to borrow!
– What other argument can be considered in favor of borrowing on the foreign market?
– In the domestic market, do you borrow because those who have funds think where to invest them? Choosing between buying government bonds, that is, lending to the state, or implementing their own investment program. And if the state really needs money from the domestic market and is ready to borrow it at a high interest rate, then investments can be postponed.
And withdrawing investment resources from the domestic market is not always good.
This cannot happen on the foreign market. Moreover, it is huge in scale. So the conclusion: if the money is given and the conditions are acceptable, then we must take it!