Vasily Yakimkin: "Agriculture, military industrial sector and petrochemicals will remove Russia from oil dependence"

In August, the Ministry of Finance spent 390 billion rubles from the Reserve Fund (almost 20% of its total funds) to cover the deficit of the Russian budget. Will these funds be enough for the elimination of deficiencies in the budget? How does the government intend to replenish them in order to come out of the crisis? Assistant professor of stock markets and financial engineering at RANEPA, Vasily Yakimkin, told Vestnik Kavkaza about these issues.

- Why was it necessary to spend the funds right now? How long will this amount be enough?

- It was a planned transfer. In principle, all experts said that by the year's end the reserve fund will significantly reduce, and next year it may run out in case of an unfavorable situation with the fiscal revenues. In my opinion, the fund will remain. Moreover, new proceeds may be received because, as a rule, the budget money is poorly spent. About a trillion rubles remains unspent by December that should be urgently distributed. However, now the Ministry of Finance has tightened control over these processes. If the money remains unspent it will return to the fund. In addition, it tax revenues are expected  to contribute to the reserve fund. In my estimation, funds will remain next year. Taking into account the current changes in oil prices, these funds may run out in 2018-2019, respectively. But until that time our economy has time for changes – to completely overcome oil dependence and receive fiscal revenues from processing.

- Is it possible to solve the budget deficit problem with the help of the money before the end of the fiscal year?

- In principle, the tranche principle closes all the gaps at the moment. Furthermore, the next planned withdrawal is expected in winter, but it will be less than now. In my opinion, spending will continue in 2016. They all will be planned without any emergencies. In any case, the budget is initially in deficit due to low oil prices, so we need additional funds. There are two ways out of the situation: issue uncovered paper money, which leads to inflation, or quietly take money from the funds. The Ministry of Finance sticks to the second way, as it is more reasonable.

- In the end, the Reserve Fund was reduced to 2.090 trillion rubles. How critical is this sum?

- According to my estimates, there is 2.2 trillion in the fund now. In my opinion, this will be enough for the next two years. We will see it in 2018-2019. The minimum revenues are expected. Therefore, it is necessary to go through 2019. Then improvements will begin.

- Is it possible to return to the previous amount of funds at the expense of coming out of the crisis?

- From time to time funds are replenished with the help of a variety of sources. For example, agriculture: we have gathered a record harvest of grain, the proceeds are $15 billion. Some of them will be transferred to funds. A record number of contracts for the supply of arms, and the military industrial sector must fulfill them. It is developing very well. In addition to these powerful industries, we have agriculture and the military industrial complex, the petrochemical industry, a number of sectors that can also replenish the budget. If we overcome oil dependence, making income from agriculture comparable with oil income, we will be able to achieve diversification of fiscal receipts. It will be a significant breakthrough.