The traditional way of "defeat" sovereignty was of a military nature. In the classical form, it was a conquest by one state of another. However, over time, the interstate struggle technologies become more complex. Changing the type of warfare. To "defeat" sovereignty, there is no longer any need for the use of military force. There are and improved other methods of desovereignization. Consider, in particular, the mechanisms of Russia's economic and financial de-sovereignty.
The degree of financial sovereignty of modern Russia is illustrated by a number of articles of the Federal Law on the Central Bank. The legislation on the Central Bank of the Russian Federation is clearly pursuing the idea of its independence in relation to its own national state. One of the articles emphasizes the right of the Central Bank to challenge decisions by appealing to international courts. The central bank may, according to the current legislation, sue in international courts with the Russian state. The main financial institution of the state is outside the sphere of direct government. The ability of the state to implement financial policies is legislatively blocked. The following are typical article-by-article excerpts from federal law:
“The functions and powers provided for by the Constitution of the Russian Federation and this Federal Law are exercised by the Bank of Russia independently of other federal bodies of state power, bodies of state power of subjects of the Russian Federation and bodies of local self-government”.
“The authorized capital and other assets of the Bank of Russia are federal property. In accordance with the objectives and procedures established by this Federal Law, the Bank of Russia exercises authority to own, use and dispose of the assets of the Bank of Russia, including the gold and foreign currency reserves of the Bank of Russia. Withdrawal and encumbrance of the said property without the consent of the Bank of Russia are not allowed, unless otherwise provided by Federal law.
“The Bank of Russia has the right to apply for the protection of its interests in international courts, foreign courts and arbitration courts.” Being independent in relation to its own state, the Central Bank turns out to be in a rather definite relationship with respect to external financial actors.
The system is currency board. To release rubles, the Russian Federation must make the appropriate purchases of dollars.
And the dollar today, as is known, in accordance with the principles of the Kingston system, does not correlate with gold and does not have economic commodity-service provision. Russia sells real goods, non-renewable natural resources, and in return receives no more than “paper”. In the medieval period, this kind of relationship was defined by the concept of "tribute".
What is the result of using the currency board mechanism? The figures below provide a comparison of the structure of the gold and foreign exchange reserves of Russia and Western countries. In terms of reserve currency, Russia is confidently ahead. But the picture with the existing gold reserves is the opposite. Russia under the existing system of world financial relations is forced into such a system of gold and currency distribution. And not only she alone. All however significant geo-economic entities that do not represent the Western world, have a predominance of currency in the structure of gold reserves (Fig. 1,2).
Figure 1. The volume of foreign exchange reserves of Russia and Western countries
Figure 2. The share of gold in the national currency reserves of Russia and Western countries
The nature of the global financial relations is even more vividly illustrated by the correlation of the amount of money in circulation (М0) and reserve assets of monetary and credit regulation in Russia and the USA. In Russia, reserves are significantly higher than the money supply circulating in the economy. The United States has the exact opposite relationship. Judging by the quantitative data, the Russian economy could be monetized at the American level. But the monetization of Russia is artificially restrained. Super-high reserve assets are money withdrawn from the Russian economy (Fig. 3).
Figure 3. Amount of money in circulation and reserve assets of monetary regulation in Russia and the United States, in billions of dollars (2008)
Another mechanism of financial de-sovereignty of the country is a low refinancing rate.
And the point here is not only that in the Russian Federation it is the highest among the most important geoeconomics of the world. More illustrative in the topic of determining the degree of sovereignty of the Russian government is a policy review during the financial crisis. When all large geo-economic entities lowered the refinancing rate in crisis conditions, it rose asynchronously in the Russian Federation (Fig. 4). And this “strange” course Russia is no longer different not only from the countries of the West, but also from the rest of the world. But maybe this is some kind of accident, an error of individuals in a particular situation?
Figure 4. Refinancing rate in leading geo-economies of the world and the global financial crisis
Just as during the new global financial crisis, the government acted in the “default” 1998. The refinancing rate was increased, exacerbating the depth of the crisis consequences for the Russian economy. At the maximum point, the size of the rate increased in relation to the level of 1997 in 7 times (Fig. 5). Therefore, the crisis response formula through raising the refinancing rate is at least not accidental. The fact that such a course of the Central Bank contradicts the national interests of Russia is obvious. But the state under the existing system does not have adequate sovereignty to ensure nationally oriented financial policies.
Figure 5. The refinancing rate of the Central Bank of Russia in the conditions of the 1998 crisis,%
An indirect indicator of the sovereignty of government in the financial sector is the direction of investment. Capital in the capitalist system is always in a dynamic state. If there is no investment of capital in its own economy, then the economy of other countries is invested. Under the “investment hunger” experienced by contemporary Russia, there is a steady increase in the investment of the outside world (Fig. 6). This process is traditionally defined as the “flight” of Russian capital.
Fig.6.Foreign investment from Russia abroad, in% (2000 g. - 100%)
Indicative of this is the country structure of foreign investment. About 60% in it occupy specific countries of the "resort type" (offshore) - Cyprus, the Virgin Islands, Bermuda, Gibraltar, the Bahamas. This kind of investment structure indicates that its main goal for domestic business is not to invest in promising areas of economic development, but to withdraw funds from the reach of the Russian state (Fig. 7).
Figure 7. Investments from Russia abroad by countries of the world (countries of the "offshore zone")
As a success story, the fact that Russia succeeded at the start of the 2000s was once presented. pay off government foreign debt. This, of course, increased the sovereignty of the state. However, the debt of the state as an institution was repaid, while the total external debt of the country continued to grow. Russia owes the outside world much more today than at the beginning of the 2000s. (fig. 8). The independence of economic entities in relation to external financial actors continues to decline. Among the geo-economics of large semi-peripheral countries, Russia has one of the highest foreign debt indicators in relation to GDP in the world. Only Indonesia is more desovereigned by this parameter (fig. 9).
Fig.8.Governmental external debt and total foreign debt of Russia
Fig.9.External debt from GDP of the largest semi-peripheral states
One of the key questions in determining the degree of economic sovereignty is the question of ownership structure. The importance of the sector of foreign ownership objectively reduces the sovereignty of the state in the country's economy. In Russia, its share steadily increases. At present, the share of organizations of foreign and joint Russian-foreign ownership in total industrial output is more than a quarter. If current trends continue, this indicator will exceed one-third by 2020 (Fig. 10).
Fig. 10. The share of industrial production of organizations of foreign and joint Russian-foreign property
The share of foreign capital in various sectors of the Russian economy already exceeds the conditional threshold in 20 – 25%. In ferrous metallurgy, this figure has now exceeded 75%. More than half is foreign capital in the food industry. How will this capital behave in the event of a significant aggravation of Russian relations with the West? The coordination of his actions in such a situation can easily lead to the collapse of the entire Russian economy.
The attitude of the Russian population to the spread of foreign capital in Russia is indicative. The nation as a whole is aware of the threats that are being produced and negatively relates to this.
The low degree of sovereignty of the Russian economy is largely determined by its dependence on foreign trade.
In this respect, a comparison of the degree of foreign trade dependence of Russia and the USA is indicative. The economy of the Russian Federation today depends on foreign trade by almost 20%. The United States is traditionally defined as a trade civilization. It would seem that its indicator of dependence on foreign trade should be higher than in Russia. However, in the United States of America it is at a level of less than 10%. The dependence on foreign trade of the USSR in the late Soviet period of maximum openness was 8,5%. The economy of Russia, which is traditionally opposed to the economies of trade-oriented countries, even if only because of the specific climatic conditions predetermining it, turns out to be overly open. De-autarching, deviation from the optimum of openness, correlates with de-sovereignty (Fig. 11).
Figure 11. The degree of dependence of the Russian and US economies on foreign trade
The economic dependence of Russia on its trade relations with the outside world is evident in the analysis of import and export indicators.
There are different expert estimates for determining the critical threshold values for the share of imports in the structure of national consumption.
Most often, the indicator in 20% is called the internationally accepted standard. If you exceed this threshold, there are threats to national security. In modern Russia, by many parameters, these allowable 20% are significantly exceeded. Food imports per capita increased during the 2000-ies. five times. During periods of crisis — both in 1998 and in 2008 — imports shrank dramatically. This decline itself demonstrated the likelihood of an external food dictate scenario (Fig. 12).
Figure 12. Food imports per capita
The share of imports in food products on the Russian market is 35%. Particularly dangerous is the dependence on foreign supplies of meat and meat products. In the beef trade, the share of imports exceeds 60%. The most dependent on imported food are megacities led by Moscow.
Even more difficult situation - in the trade in goods of heavy industry. For many types of commodities that are key to the economy, imports do not just exceed the threshold value, but dominate. Domestic commodity producers in the sphere of heavy industry in Russia either ceased their activities or minimized production. The share of national market actors was also minimized in supplying the population with consumer goods. On 80%, Russians wear clothes of foreign tailoring. The share of imports for individual consumer goods today exceeds 90%. Close to the absolute dependence of Russia on the supply of computer equipment.
The most catastrophic consequences, expressed by the millions of Russian lives, can be caused by Russia's dependence on the import of medicines.
According to official data, almost 73% of consumed drugs are of imported origin. According to unofficial - more than 90%. What will happen to the Russian population in the event of external isolation of the country, when the supply of foreign drugs will be stopped?
The displacement of domestically produced goods by imported goods cannot be explained solely by the action of free-market mechanisms. According to the VTsIOM survey, the majority of Russians assess the quality of Russian goods in relation to the price higher than foreign ones. It turns out that goods of lower quality and higher prices get an advantage under the prevailing conditions. Absurd situation for the market! So the reason for import dominance is not in the product itself, but in the higher additional costs of all sorts of domestic producers. Consequently, national economic actors are put in a more difficult position compared to foreign ones. It is not even about the absence of protectionism, but about protection in relation to foreign trade agents.
In the process of considering the establishment of Russia's import dependence, a certain strategic line is found. In 1990-s. the price of foreign goods in Russia, as a rule, decreased. When the domestic commodity producer left the market or ceased to exist as a subject, and the state designated a different rhetoric in the dialogue with the West, the market situation fundamentally changed. In 2000-s. prices for imported goods went up sharply. It is becoming more and more obvious that prices in world trade are set politically, and are not the result of free competition, as liberal textbooks assert (Fig. 13).
Figure 13. Import-dependence strategy. Dynamics of average import prices, (1995 g. - 100%)
The modern Russian economy today depends substantially on exports, and exports, in turn, are determined by the sale of oil and gas. Today, exports account for 28% of Russia's gross domestic product. For comparison, in the USA its share is 11% of GDP. In the late period of the USSR, it was about 10% of GDP. And even at ten percent, the reinforcing monospecificity of the Soviet Union in the hydrocarbon trade was used by geopolitical opponents as a factor in the destabilization of its economy (Fig. 14).
Figure 14. Export share in GDP structure in the Russian Federation, the USA and the USSR
Export share in the structure of GDP in the Russian Federation, the USA and the USSR Dependence of the economy of modern Russia on the raw material component of exports in the 2000-s. significantly increased. The existence of such a connection is evidenced, in particular, by an increase in the correlation coefficient of oil prices and investments in the Russian economy.
The increase in the share of raw materials in the export structure is correlated with the decline in the share of machinery and equipment. On the contrary, in the import structure, the share of machinery and equipment increases synchronously. The diagnosis is obvious: raw materialsization and deindustrialization of Russia undermine the foundations of its state sovereignty.
The article is based on the report of Vardan Baghdasaryan, presented at the conference "Modern Problems of Public Policy and Management", held on October 17, 2012, in Moscow State University. Mv Lomonosov.