In many oil countries have the anti-crisis Fund, replenished by windfall revenues from energy sales. In the period of high quotations of cumulative structure functioned with varying degrees of success. Now is the time to spend accumulated during the fat years of the oil money. “Ribbon.<url>” I studied the examples of the most successful and failed funds.
For the first time in history, Norway will print its enormous Oil Fund, which accumulates funds for the retirement security of future generations. In 2016 to support the economy of the Scandinavian country will spend $ 25 billion earned from exporting black gold.
Countries dependent on oil sales, are constantly faced with several challenges. They suffer from “Dutch disease” — this state of the economy in which the export of raw materials dampens the development of industrial production and puts the welfare of the state dependent on unpredictable fluctuations in world prices. In the end, oil is a limited resource and non-renewable, and the issue of sustainable use derived from its sales revenue is very important for exporting countries.
To reduce the economy’s dependence on these factors, the surplus obtained in the fat years of high quotations, deposited in the accounts of Central banks or accumulated in special funds. Such structures arose in the 70-ies of the last century. Their common principle of operation — planning income and expenditure budget based on a conservative forecast of oil prices and the accumulation of excess receipts under favorable conditions.
Treasures of the Vikings and the Eskimos
Norway, a quarter of GDP is generated by the oil and gas sector, has the largest national wealth Fund on the planet with assets of $ 870 billion. He owns nine shares in thousands of companies around the world. The largest volume of purchased Fund shares are securities of Nestle and Apple. In addition, the Fund holds US government bonds, Germany and Japan. A lot of experts say information openness, clarity and transparency of rules of filling, investment and use of funds of the Norwegians.
The oil Fund is and state of Alaska
Photo: Lucas Jackson / Reuters
In the first quarter of 2016, the Norwegian government pension Fund recorded a loss of $ 10 billion dollars (minus 0.6 percent) due to falling stock markets. In the third quarter of 2015 Oil Fund suffered the biggest loss in four years, but fourth quarter ended with a profit of 3.6 percent.
Norway’s economy suffered greatly from the collapse in oil prices — last year, revenues from hydrocarbon exports fell by 27 percent compared to 2014 (from 62 billion to $ 45 billion). And now Norway is pouring $ 25 billion from the emergency reserve into the economy to revive her. It is expected that growth of GDP in 2016, the year will not exceed percent.
Your Foundation is even in the us state of Alaska. This so-called Permanent Fund, founded in 1976. There’s also piling up the funds from the sale of oil. Now their volume exceeds $ 53 billion. To the Fund are deducted 25 percent of the funds received by the state government from the oil companies (taxes, licenses for drilling, fee for use of the pipeline), and part of the money goes to the residents of Alaska. In 2014 they received a 1884 dollar. In the composition of the portfolio of the Fund consists of U.S. stocks, U.S. bonds, securities of other countries, real estate and other assets.
Gold Sands
One of the largest suppliers of oil to world markets — Kuwait — used the accumulated money after the first Gulf war. By established in the 1960s and 1970s Budget reserve Fund and the Reserve Fund for future generations has funded the reconstruction of the country. In the future generations Fund, lists 10 percent of state revenues (regardless of their origin and oil prices). Money is invested in the securities of developed countries.
It is noteworthy that the world’s largest oil producer — Saudi Arabia — has a separate Fund (not taking into account SAMA Foreign Holdings, which, in essence, is the Central Bank). 90 to 95 percent of the revenue to the Treasury of the Kingdom brings energy exports. But the global decline of prices for raw materials forced the ruling family to change their approach. In April, Prince Mohammed bin Salman said that the Kingdom is preparing for “the twilight of the oil century” and plans to create a sovereign Fund with a volume of two trillion dollars later for getting rid of oil dependence.
Oman established the State General reserve Fund in 1980, and in 1993 — the Oil Fund, but their activity is hard to call successful. Fill them and failed: funds are constantly left to cover the budget deficit.
And everything, everything, everything
A very similar situation in Venezuela. There are a macroeconomic stabilization Fund and the Venezuelan investment Fund. The rules of money transfer in the funds is constantly changing, and the state budget was regularly a shortfall. Under Hugo Chavez savings have been spent, and funds from now remained only signs.
When President Hugo Chavez of Venezuela has exhausted its reserve funds
Photo: Miraflores Palace / Reuters
And unsuccessful experience of Nigeria, which in 2004 was concentrated in its stabilization Fund 50 percent of the oil profits for 2003. However, in November of the same year of these funds was taken $ 280 million in compensation to citizens of their expenditures on gasoline. The Fund has not started to function.
In the post-Soviet space also have commodity-dependent countries that are trying to save their economies from shocks. Thus, Azerbaijan established the State oil Fund in 1999. On April 1, 2016, its assets totaled 34,24 billion dollars. Kazakhstan since 2001, develops its own national oil Fund by contributions from mining companies. In 2012 it printed, and in 2014 Kazakhstan national Fund spent $ 10 billion on anti-crisis measures.
And how at us?
The dependence of the economy and financial system and the economy from external economic factors has pushed the government to the establishment in 2004 of a Stabilization Fund. There were accumulated funds of the customs duties on oil and the tax on extraction of mineral resources, in other words — the surplus from the sale of hydrocarbons. Money invested in foreign currency and debt obligations of foreign States. The accumulation of the stabilization Fund was used for repayment of external debt.
In the two thousandth by the growing oil prices, the stabilization Fund is replenished quickly, and by 2008 it had accumulated more than $ 157 billion. Adequate size of the Fund has determined then in 7 percent of the country’s GDP: this would be enough to hold in a falling economy 2-3 years. During this time, the government will adopt new budgets with reduced spending (including social), and the Foundation will fulfill its mission — ensure a soft landing of the economy in a crisis.
Alexei Kudrin (right) created the Russian stabilization Fund. When the Minister of Finance Anton Siluanov (left) he actively spent on budget needs
Photo: Sergey Bobylev / TASS
1 Feb 2008 the Fund was divided into two parts: the Reserve Fund with $ 125 billion and the national welfare Fund (NWF) to 32 billions. FNB became the pension airbag — collecting there money on the well-being of future generations.
The funds are managed in different ways. Reserve holds funds in the currency or the most liquid liabilities of developed countries, that is, that can quickly turn into cash. The Fund, in addition to the above instruments, may invest in infrastructure projects in the country.
To date, the Reserve Fund has been used for more than a year, the money being spent to cover the Federal budget deficit.
On may 1, the Reserve Fund 44,96 billion dollars (nearly three trillion rubles, NWF — 73,86 billion (about five trillion). In 2016, the Finance Ministry plans to come out with the sale of currency from Reserve Fund for financing budget deficits approximately once in two months. It is expected that this year the lack of money in Treasury will not exceed 2.36 trillion rubles.
Finance Minister Anton Siluanov warned that without the introduction of measures to optimize budget Reserve Fund and part of the national welfare Fund can be spent this year.
