The problem of the export of capital is an urgent topic for countries with developing economies. The outflow of funds from a country almost always pursues one goal - obtaining a higher income in another country.
Outflow of capital: reasons
In order to understand how the outflow-inflow of capital works, it is necessary to identify the reasons for the export of funds:
- The lack of a proportionate relationship between capital and its demand, which leads to excessive accumulation of finances. Therefore, it would be more rational to transport it to where there is a demand for it and there is an opportunity to get good dividends.
- Lack of competitors for products from the host country.
- Cheaper resources needed for the manufacture of a product.
- Favorable economic and political climate in the host country.
If several decades ago countries were divided into those who import and export capital, in today's realities one country can immediately be both an exporter and a host.
Types of capital flows
Capital outflows may divided into two types, depending on the source of funds.
State capital
Monetary resources of this type are in the possession of the state. The government or interstate organizations themselves decide when, where and how to invest finance. This can be loans, loans with a subsequent profit in the form of interest for use or international financial assistance.
Private equity
This industry differs from the state one in that any private person or company can import money from its own funds, which are not controlled by the state in the territory of its country. But on the other hand, control of funds is the responsibility of the government abroad, if they were not hidden from the government. This may be, for example, investment in the foreign production of something, opening your own company, interbank relations of an investment nature.
Capital Outflow Statistics
The outflow of capital from the Russian Federation, according to statistics, has decreased since the previous year. This situation is entirely justified, and it would be logical to associate the outflow of capital with the economic situation in the country and the stabilization of the ruble exchange rate.
According to the forecasts of the Central Bank, the outflow of capital from the country in 2015 will amount to an average of $ 118 billion, taking into account plus or minus $ 10 billion.
According to the data, compared with the outflow of capital in the first three months of last year, this year there is a positive trend. It amounted to $ 33 billion, unlike $ 47.7 billion for 2014, which is almost 1.5 times less. And these figures will decrease. So, in 2016 it is planned to take out money from the country in the amount of $ 87 billion, and in 2017 - $ 80 billion.
In early spring of this year, the head of the department, Aleksey Ulyukaev, noted that while sanctions by Western countries will continue, the outflow of capital will continue.
The export of funds in 2014 amounted to a record maximum amount of $ 150 billion, against $ 61 billion in 2013. The Central Bank, focusing on the cost of one barrel of oil, makes a forecast that the import of money this year will be about $ 120 billion. And if the price of the global oil market will drop to critical $ 40 per 159 liters of oil, that is, an option to increase capital outflows to $ 130 billion. If you look at capital outflows, statistics show a direct relationship between the cost of oil and export finance.
Sometimes you can hear that in fact there is no export of funds abroad, but only concealment from taxes and, according to the exporters themselves, finances come back after a certain time.
For countries with developing economies, it is quite typical that both capital outflows and cash inflows occur simultaneously. This is affected by the disproportion of taxation between foreign offshore companies and domestic investors. Another reason may be just banal money laundering.
Is it necessary to deal with the outflow of capital and how?
Most experts rightly believe that the main reason for the outflow of capital is the low attractiveness of investments in domestic producers compared to foreign ones. In order to understand where, in your native country or abroad, it is more profitable to invest money, it is necessary to take into account the level of taxation, the economic condition of the country, the stability of the currency and so on.
It would be advisable to draw a parallel between the export of capital and the evasion of the population from monetary investments in their own business in the country. And while there will be more attractive conditions for investing abroad, it will be impossible to force the investor to invest in the local economy.
As mentioned above, capital outflows may be associated with the laundering of criminally obtained funds or unpaid taxes. All these illegal activities arouse interest in government agencies to combat crime and increase control over the export of capital.
Causes of the effects of capital outflows
The flight of capital from a country suffers serious economic losses for it. First of all, the state is losing its financial resources, which it itself has developed. The money that could be invested in domestic production, raising the economic stability of the country, "float" abroad.
The currency offer on the Moscow Exchange drops to a minimum, which entails the establishment of an unrealistic ruble exchange rate in relation to foreign currency. If the part of the monetary resources exported to neighboring countries were returned back, then this would increase the money supply and stabilize the ruble exchange rate.
The lack of necessary financial resources negatively affects the level of employment in the country.
The lack of a real amount of money undermines the ability to cover the main external debt of Russia and does not allow paying interest on it.
The export of capital seems to be a normal process at the state level, regulated by the government at the level of export of goods and services and job creation. But when this volume exceeds all permissible norms, as it was in 2014, it completely shows the decline in the economic situation in the country, where the opportunity to invest in a domestic producer of goods and services is lost.
The greater the amount of money exported abroad, the more difficult it will be to counter this. And the solution to this problem is not limited to administrative measures. It is necessary to create such conditions for investment in our country that will encourage investors to develop the state economy, create additional jobs, and not enrich foreign countries.