The spirit of default is returned


Дух дефолта вернулся

The current regime built on the ruins of the old, swept away in the collapse of 1998. And now he began to behave with the same arrogance.

The twenty year anniversary of “black August” 1998 celebrated quite widely. Many of her suddenly wanted to remember. What, at first glance, strange. After a few years after the default, at the peak of the bold zero, it is almost forgotten.

This forgetfulness had been its meaning. All new groups of citizens were introduced to the then prosperity. And those whom it is not touched, and in 1998, did not hold any dollar bills, no state short-term bonds (GKO).

And now about the old default talking with such interest, like it’s fresh news. Apparently, people are starting to catch in the atmosphere of something vaguely similar to what was worn in it on the eve of those events.

It would seem that any similarity with those hands, no. Twenty years ago, the collapse occurred due to the fact that, firstly, the regime defended the unrealistically high exchange rate (a currency corridor), throwing on his maintaining the last reserves of dollars, and secondly, could no longer keep afloat a system of t-bills, which from the tool to cover the budget deficit turned into a pump, pumping out almost all budget revenues in favor of the group of speculators.

Now, like anything this is not observed. The ruble floats freely. These days had a little panic, and he automatically slightly cheaper. If the panic becomes large, the fall in price already not lightly. External and domestic debt (and not only the state but also borrowing formally private, although close to the regime structures) do not require payment fantastic percent and is comparable to international reserves, the size of which (nearly half a trillion dollars) would have seemed twenty years ago, frankly unattainable.

In the technical sense of the lessons learned from a default. Repeat it on the same schedule made it impossible.

But if it is not to look deeper. After all, the state of the guiding minds in critical preddefoltnom months was similar to what it has now become.

Yeltsin’s regime carried out on its own logical economic policy. He struggled with inflation, which in the first half of the 90s was terrible, and to this end fixed ruble rate and plug the holes in the budget is not the issue, and the sale of t-bills (interest on which has not yet been cannibalistic) and Western loans.

In 1997, it seemed that you got. Inflation has been broken, the economic downturn has stopped.

But by the end of the year, everything changed. I started to panic in the economies of East Asia, which spread to other emerging markets, including Russia. Money ran out of the country. Borrowing has become very expensive. Hardly built the financial system of Russia gave one leak after another.

By the beginning of 1998 overdue cool change of economic policy. I had to let the ruble exchange rate to freely and smoothly go down, to accept a temporary increase in inflation and collapse the system, the bonds, paying for the bonds issued falling ruble. This would be a lightweight version of what then still had to do, but with a softer devaluation without default because of failure to pay debts would not be.

Why not have done? The inexperience of the captains of the economy and the lobbying pressure of speculators GKO explain it only partially. Even more important was overbearing stubbornness and unthinking faith in its own right. Because, and went the same course, not paying any attention to the fact that the external environment has abruptly changed, nor to what is happening in the country. First donated by ordinary people of the economy ceasing to pay pensions and budget salaries. In the end, these people were strangers. Then turn to the part of “their” to magnates. They, too, all the more pressed. And a little later when he spent all, the collapse occurred by itself.

“I gave myself a word… And his word… I respect you Have a whim, but I gave myself a word!” So reasoned a comic character in a popular Soviet play. So reasoned the authorities in preddefoltnom months of 1998. But so says the bosses today. It also gave the word, and not one, and very these words of respect.

First it promised myself to remain at the current levels and, where possible, and to increase spending power, the size of which is such that Russia conducts large-scale war. But three months ago it gave myself another promise — in the form of the “may decree”, which requires to develop the country, build roads and other facilities, sought for this, as immediately calculated, and a half—two trillion plus annually.

It is clear that these initiatives reverse really hard. Because military orders for a long time divided. Funds for the development of the country too, and almost divided. Of course, between the magnates was not to look for others wishing to develop it. Someone is going to build the most expensive in Russia the highway leading into Sochi. And someone asks for money to supermost from the mainland to Sakhalin. Don’t ask, you pay off the object. For whom should you pay off.

To cut all these bounties, I repeat, hard. Although it is possible. Strong even the Kremlin, and the leader of the order weighs a lot.

Moreover, everything began to change.

Again, as twenty years ago, the crisis in emerging markets. The collapse of the Turkish Finance is not the only one of these events, but only geographically the closest.

Added to this is man-made and storm — the new wave of us sanctions. Repeating that will be a mirror response, weird. Mirror response impossible. But the duty and inflexibility of duty balagury the tone that lead the West into an evil frenzy, too, is due to the fact that when it was your word in the slightest them not to give way and for any reason to put them in place. Today it didn’t quite fit the situation. But the word is not a Sparrow. This is not going to get caught.

Same thing on the home front. The deteriorating external and domestic environment seems to be dictated by the need to temper the Treasury’s ambitions and appetites, and at least not break anything that works.

But your word makes the authorities come up with new ways of squeezing money out of the country, despite the timeliness of this activity.

Saving on retirees. Fishing for additional income at all locations and by any means. Emergency “whitewashing” of the economy, leading to mass closures of the gray businesses, that produce socially useful goods and services and fed millions of workers. Even the targets are about the same, which was beaten on the eve of default in a desperate attempt to scrape together enough money in the budget.

Then gradually comes the turn to the magnates. Plan presidential aide Andrei Belousov partially cannibalize some high-yield business (metallurgical and other) interesting by the fact of its appearance, even if will not be executed.

It is clear that it’s not about giving money to the poor, and the withdrawal of surplus from some magnates in favor of the other, closer to the body. Similar things happened in ‘ 98, which killed some billionaires, but raised others. Not to mention the fact that Belousov is considered the person who compiled the text of the may decree, and his career is tied to “this to myself the word” was made that would not have happened.

We do not see a literal repetition of the pre-default scenario, although some common ground is easy to find. Very much is now arranged differently, and to predict close to financial ruin, perhaps, no reason. But the return not only pre-default atmosphere, but many preddefoltnom situations is very impressive.

Our higher power, giving yourself complete freedom in foreign and domestic Affairs, in relation to Economics and Finance for many years acted prudently and carried out its initiatives to busily about the development of the country, but still with an eye on reality. And here stopped to look. Bad luck.


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