Foreign economic activity is the activity of the state in the field of economics outside of domestic trade. It has many different aspects, but all of them are somehow related to the market, the promotion of various kinds of services on it: transportation, sale of goods. In fact, it is a complex system consisting of many interdependent links.
Ultimately, foreign economic activity has a goal - making a profit as a result of the implementation of certain transactions on the international market.
Since the study of market conditions, demand for various types of goods or services, the presence of competitors, the study of companies that are potential consumers is considered an important component of successful trading, a huge team of managers, economists and marketers is faced with the crucial task of ensuring and maintaining the functioning of the above mechanism.
Features of state activity in the field of foreign economy
Foreign economic activity of Russia has its own characteristic specifics. The coordination of the relevant processes of market relations consists of several fundamental points.
The fundamental ones are:
1) state regulation of foreign economic activity by the laws of several countries. The conclusion of foreign economic transactions is impossible without knowledge of the legal framework for the regulation of a particular activity;
2) relations in the sphere of foreign economy are market, therefore, activity should be regulated by markets.
Commercial relations will not work if partners from different countries are not interested in mutual cooperation. Foreign economic activity, manifested by any transactions of an international level, is simply impossible without negotiating, concluding commercial transactions between partners. These are important, inalienable auxiliary functions of foreign economic activity;
3) an equally important component of any transaction is the provision of transport, insurance of enterprises for modal and multimodal transportation. Activities outside one country are not feasible without establishing links between customs, foreign exchange and credit exchanges, since clearance and settlement are important for any type of activity. All established and adopted standards are recorded in the protocol, recorded and observed, therefore, special skills and knowledge are simply necessary for interested parties.
Managerial link in the foreign economic policy of the state
In our country, the Ministry of Trade is responsible for managing the state’s foreign economic activity. In recent years, many forms of activity in Russia have undergone major changes. Functions of the Ministry of Commerce:
- regulates and coordinates foreign trade relations;
- makes proposals for combining foreign trade policy between partner countries;
- ensures the implementation of the adopted proposals and laws.
In addition, the responsibilities of the Ministry of Finance of Russia include:
- regulation of taxation issues;
- establishing rules for international settlements;
- determination of the order on issues related to financing, lending to various operations in the foreign economy;
- conducting various operations abroad;
- representing the interests of their country in international currency and credit organizations, as well as in the Central banks of other states. It is the Central Bank of Russia that is the main authorized body that exercises control over foreign exchange operations on foreign exchanges, as well as the regulator of relations between them.
Customs - the subject of foreign economic relations
Customs affairs are also foreign economic activity. The Customs State Committee of the Russian Federation, which develops and implements fiscal policy in the state, is one of the indispensable links in the tax-accountable system of the country.
In addition, the state structure controls all operations in this industry, regulates economic activity by various means on the basis of the
customs policy developed in Russia.
Passing the procedure of customs inspection and identification, each unit of production receives its own code. In addition, the commodity nomenclature of foreign economic activity is carried out in the framework of the existing Russian legislation. Thanks to this procedure, specialists have the opportunity and access to study the structure of international trade.
The development of foreign economic activity consists in establishing high-quality mutually beneficial relations. For their formation, it is important to expand business contacts between foreign partners - exporters and manufacturers, to provide them with assistance and assistance. At this stage, local governments in the regions are responsible, as well as representatives of the administration and the Chamber of Commerce and Industry of the Russian Federation.
Today, Russia has established market relations with many countries of the Near and Far Abroad.
Advantages and disadvantages of reforming
The many reforms that have been carried out over a long period of time have contributed to the creation of a unified base on which foreign economic activity is carried out. This, first of all, plays a significant role in the standardization of processes in the foreign market.
Although all the long-lived reforms have not led to radical changes, there are still many questions and problems in the international market. The state foreign economic activity of Russia is still not fully prepared, as it was launched prematurely. Hasty liberalization ultimately led to:
- dependence on imports of many consumer goods;
- worsening export relations between countries;
- the collapse of many markets within the country, which affected domestic producers;
- export of our weapons, some scientific products.
The sphere of foreign economic activity of Russia has repeatedly undergone reforms, but at this stage the mechanism of its regulation remains imperfect.
The main directions in the field of foreign economy
State regulation of foreign economic activity needs an effective system, which means that the fitness of each individual subject to new modern trends in market economy is in demand:
- internationalization of production;
- the development of the international division of labor;
- reconstruction of old and creation of new industries in the economy;
- renewal of capital associated with the inflow of funds in a particular activity;
- development of vigorous activity between transnational corporations;
- liberalization of trade between countries. It is important to reduce customs duties, to remove restrictions on imported and exported goods for export, to create more free economic zones.
If we remove regional barriers, form common markets and increase the number of free trade zones, then the impact on foreign economic relations in the aggregate of all of the above factors will be significant.
Changes in the sphere of foreign trade relations: tariffs and rates
Customs tariffs have been repeatedly changed. The tariff was crushed, set separately for each type of product, differentiated duties, thereby encouraging the export of goods abroad, or vice versa, they kept the product if its production brought the country substantial profit. The sphere of customs regulation in the coming years is waiting for serious changes. The government intends to reduce the number of duties, their purpose is only for large goods in batches, and not for small goods separately.
Unification of tariff rates, reduction of duties after the forthcoming entry of Russia into the WTO members are also supposed. Already in many developed countries, the level of customs tariffs is average, but not overstated. It is important to develop a whole range of measures for non-tariff regulation of relations between powers, because duties can be reduced only by applying various non-tariff barriers. The international foreign economic activity of some states in this matter can serve as a model for domestic policy.
Changes in taxation and entrepreneurship
In Russia, taxation on some profitable industries is still humane. Exporters are not interested in investing in the economy of our country if they have excess profits from the supply of their raw materials to the world market in other countries.
It is necessary to pay attention to innovative entrepreneurship, knowledge-based exports. To improve the structure of exports from Russia, it is important to form state support for exported industrial goods. If regional export programs are regulated, then there will be less competition between Russian firms producing similar products.
It is possible to increase the effectiveness of foreign economic relations by diversifying the markets for domestic goods, as well as the sources of produced raw materials for export, maintaining relations with many countries, and expanding their circle constantly.
Features of recent foreign economic relations in the USSR
It is important to regulate the export and import of captals and radically change the situation. The export of capital began from Russia to the countries of Asia in the early 20th century. Under the USSR, mixed joint-stock companies were created that carried out mainly only trading operations for the export of capital in the form of loans from the state. Further, some countries of Western Europe adopted this idea and began to create such structures at home.
Most loans went to Turkey, Iran, Mongolia, and Afghanistan. Some developing countries received economic assistance from the Soviet Union. But with its collapse, the issuance of loans and assistance to countries abroad was significantly reduced. The export of capital has increased, but in other forms:
- investment contribution to large domestic enterprises;
- issuing loans for the import of private capital.
The specifics of investing in the Russian economy
Today, a concept has not been developed for the import of capital in our country; a system for regulating the export of capital has not been developed, with the exception of its individual minor elements. The export of capital from Russia is controlled by the law “On liberalization of activities outside the economy on the territory of the RSFSR” adopted in 1991.
Monitoring the implementation of foreign exchange transactions is carried out on the basis of the law “On Currency Regulation and Control”. Private capital for export is not supported by the state in any way, no measures have been taken. We only know the agreement on the protection of investments with other countries, the prevention of double taxation.
Placement of various kinds of investments abroad in no way passes the analysis of foreign economic activity. Nevertheless, there are no restrictions on the export of capital abroad in Russia.
Problems of illegal export of capital abroad
Many illegal immigrants have appeared who send capital for export by dishonest means. There are much fewer foreign enterprises registered in the state register than those companies in which Russian funds have been invested. For the formation of national interests and tasks in the field of export, Russia needs to create a detailed concept for the export of private capital beyond its borders. This is necessary not only for executive authorities, but also for private investors. The fundamentals of the policy of the state of Russia on the export of capital abroad for them should be clearly indicated and understood.
It is difficult to regulate the entire process of capital export, because restrictive and prohibitive measures are not always effective in real life. Improving the investment climate means:
- reduce the tax burden;
- stabilize the political situation in the country;
- prevent inflation;
- comply with legal regulations;
- reduce criminal phenomena in the economy.
With such a change in the situation, the investment climate in the country would improve, and therefore, changes for the better in the issue of import and export of capital.
Overcoming the barriers to the import and export of foreign investment is the task of our government. It is a favorable investment climate that will have its impact on customs control mechanisms, foreign exchange transactions, and will contribute to the effective development of international trade.
Foreign economic activity is precisely that sphere of the economic and political life of the state, in order to strengthen the position of which at a high level one cannot do without foreign investment deposits. All measures aimed at improving the environment associated with investments, of course, should be carried out in conjunction. The state needs to pay attention to the following areas for regulating relations outside the country's economy:
- To restore and expand all areas of activity with the countries of the Near and Far Abroad, as well as the European Union.
- To accelerate the integration processes existing in the CIS countries.
- To make foreign economic relations more effective in all regions of Russia;
- Clearly distribute the functions and responsibilities between the regions and the center for the fulfillment of the obligations and requirements that are determined by foreign economic activity. This provision allows us to carry out work in a decentralized way, without interfering in the current processes of trade and at the same time keep the situation under the full control of the state.