Theories of international capital migration. World investments and savings. Export of capital and its forms. The role of TNCs in the global investment process. Interstate regulation.
International capital migration
The abstract was completed by student gr. 6221 Tsymbal O.G.
Moscow State Industrial University
Department of "Economic Theory"
Moscow 2001
Theories of international capital migration.
International capital migration is one of the characteristic phenomena of the world economy. Capital, as a factor of production, has a physical and monetary form. Physical capital is investment goods used to produce other goods.
International capital migration is the movement of capital between countries, including exports, imports and its functioning abroad.
International capital migration depends on changes in economic conditions, scale, forms, mechanisms. Theories of international capital migration were developed within the framework of the neoclassical theory of international trade, the neo-Keynesian theory of economic growth, the Marxist theory of capital export, and the concepts of the development of an international corporation.
Neoclassical theory was based on the views of J. St. Mill, the famous English economist of the 19th century. He believed that that part of the capital that helps to reduce the rate of profit is exported. According to J.St. Mill, the import of capital improves the production specialization of countries and contributes to the expansion of foreign trade. Finished goods, like capital, are internationally mobile.
A new aspect of the study of international capital movements was that it was associated with international trade. J. Keynes believed that if the reasons preventing the international movement of capital were eliminated, the latter could replace trade in goods. Neoclassicists integrated the process of movement of factors of production, including capital, into the theory of international trade. This can be accepted since foreign trade and international capital movements have the same meaning. Excess or lack of capital is considered by neoclassical scholars as the reason for its international migration. The marginal productivity of capital is expressed in terms of the interest rate. The international integration of capital continues until the marginal productivity of capital in different countries is equalized. The export of capital is an alternative to commodity exports.
K. Iversen distinguished the international movement of capital into real and balanced.
Real capital flows are associated with unequal levels of marginal factor productivity in different countries.
Balancing capital movements are determined by the needs of regulating the balance of payments.
The neo-Keynesian theory of capital movements was developed under the influence of the views of D. Keynes. Keynesian theory states that macroeconomic equilibrium is the equality of investment and saving. Excess savings leads to a recession in the economy and unemployment. In this situation, part of the savings goes beyond national borders, but a more significant reason for the international movement of capital, according to Keynesian theory, is the state of the balance of payments. If exports of goods exceed their imports, then the country can become an exporter of capital. According to Keynes, the process of international capital movement should be regulated by the state.
Another founder of Keynesian theory was F. Mahlum. Machlup's most significant conclusions are as follows.
In countries that import capital, investment is stimulated, which increases consumption and increases national income.
Capital exports may limit domestic investment. This reduces consumption and national income. The export of capital affects the macroeconomic balance of the national economy.
According to the theory of economic growth created by R. Harrod, the export of capital and the formation of savings are linked in his model of “economic dynamics” with growth rates depending on the amount of investment. The rate of economic growth slows down if savings exceed investment, therefore, the tendency to export capital for more profitable use increases. The neo-Keynesian theory of capital export focuses on stimulating business activity in countries that export and import capital, it follows that foreign investment from developed countries accelerates the economic development of developing countries.
Marxist theory of capital movement. Marx believed that capital is exported from the country not because it cannot find application within the country, but because higher profits can be obtained from it abroad. According to Marxist theory, the reason for the export of capital is considered to be the increased internationalization of production, increased competition between monopolies and increased rates of economic growth. Internationalization theory studies the problem of intra-company relations of international corporations. To work with the concepts of global corporations, models of monopolistic advantages, product life cycle models and an eclectic model are being developed. The monopolistic advantages of foreign investors provide them with higher incomes than the income of a local firm in its host country.
The theory of capital flight. The outflow of business capital abroad is called capital flight (removal of assets). This problem is considered the subject of international research. Capital outflow occurs through legal and illegal channels. The reasons for capital flight are considered to be instability of the economy, national currency, politics, investment climate and criminal activity. Capital flight has a strong negative impact on economic growth; it can not only destabilize the economy, but also cause shocks in other countries.
International capital movement is an important generator of economic growth, an effective means of increasing export competitiveness, strengthening the country’s position in the world market and in the world economy as a whole.
World Investments and Savings
The demand for capital exists in the form of global investment. Demand arises from countries that lack their own capabilities to cover domestic investment consumption. The source of global investment is savings. World Savings – Offer financial resources on the part of countries that have them in abundance. Such countries are called exporters or investors. The amount of world savings is determined by the difference between domestic savings and domestic investments of capital exporting countries. The amount of global investment is determined by the difference between domestic investment and domestic savings of capital importing countries, and the amount of foreign investment also depends on the savings of businesses, households and governments.
The difference between savings and national investment is called capital flow. The movement of capital is closely related to the movement of goods and services; they are mutually opposed, and ideally they balance each other. The intensity of capital flow is determined by the degree of openness of the country's economy and the value of the existing interest rate.
International financial flows and international flows of goods and services are two interrelated processes. In a closed economy, capital inflows are zero at any domestic interest rate. In a country with a small open economy, the influx of investment can be anything at the world interest rate. In a country with a large open economy, the higher its domestic interest rate, the more attractive these assets become to foreign investors, the greater the flow of capital, in general. In fact, the existence of large developed countries has a huge impact on the global capital market. The size of the world interest rate will be largely determined by the economic policies pursued in such countries. The more funds are attracted from abroad, the higher the percentage you have to pay for their use, but the higher the interest rate, the more attractive the investment conditions become, therefore, more funds come from abroad. The fiscal policies of governments in developed countries determine whether global savings are sufficient for investment. Expansionary fiscal policy reduces saving and reduces the supply of capital. The policies of developed countries largely determine the equilibrium of the world capital market by influencing the value of the world real interest rate. It is the interest rate that determines the price at which investment resources are bought and sold on the world capital market. The country's net gain from capital imports will be determined by the difference between business gains and investors' losses.
International capital migration, balancing global savings and investments, provides benefits to both exporters and importers of capital. The total income from global investment is determined by the total gain of the exporting country and the capital importing country.
Export of capital and its forms.
The export of capital is carried out not only by industrialized countries, but also by moderately developed and developing countries. Each country is both an exporter and an importer of capital. This can be called cross-flow of capital.
The money market determines the relationship between supply and demand for short-term means of payment (international commercial credit). Medium-term and long-term loans, being part of the global credit market, at the same time constitute an integral element of the global capital market.
The global capital market regulates the movement of long-term assets in the form of investments. The main entities involved in investing funds are private business and the government. Flows of investment resources move both at the macro level and at the micro level. At the macro level, interstate, or official, capital flows take place. The micro level is the movement of private capital.
Institutional investors provide connections between the main subjects of the global capital market, acting as exporters and importers of capital or performing other intermediary functions. Institutional intermediaries include:
interstate banks and currency funds providing short-term lending (IMF). World Bank, engaged in long-term lending.
Private national and international financial and credit institutions (national and transnational banks and companies)
state; central and local authorities, treasury and other authorized organizations. The state acts as a guarantor and surety for the external obligations of private legal entities. A special function of the state is to regulate the international movement of capital by creating certain economic, legal and social conditions for investment.
The export of loan capital involves the implementation of medium- and long-term lending, which brings the capital exporter income in the form of loan interest.
Export of entrepreneurial capital means investment in the economy of a country with the aim of making a profit.
Entrepreneurial investment is an investment in the creation of productive capital abroad. Such investors are individuals, banks, and insurance investment companies. Investments are made in two ways: portfolio and direct investments.
Portfolio investments are represented by securities (stocks and bonds). The main goal is to generate income. The size and dynamics of portfolio investments are influenced by differences in interest rates paid on bonds in individual countries. All portfolio investments can be divided into stakes in enterprises of less than 10% and securities. Portfolio investments are an important source of attracting foreign capital to finance bond issues.
Direct investment is an investment in production. An investor who has invested his money in an enterprise has the right to manage and control this enterprise. In world practice, such investments are called foreign investments. The International Monetary Fund also deals with these types of investments. With direct investment you can not only make a profit, but also develop new production and strengthen your position in the market. There are many positive aspects to private equity. The movement of private direct investment is characterized by movement in the following aspects;
a) in countries that already have significant industrial potential (in such a country, direct investment is more significant than portfolio investment);
b) between countries with highly developed industry (where the movements of portfolio investments are profiled);
c) to countries with underdeveloped economies, but with rich raw material resources, where only direct capital investments are directed. Thus, the relationship between portfolio and direct investments depends on the degree of economic development of the country in which they are sent.
International credit promotes the continuity of production processes, the redistribution of capital between countries and industries, the movement of funds to more efficient and profitable areas of the economy, increases the size of capital accumulation, etc. There are long-term and medium-term loans.
Long-term lending means banks providing loans to buyers of machinery and equipment, as well as loans to the state.
Medium-term loans are used to replenish fixed capital.
The role of TNCs in the global investment process.
TNK is a transnational corporation. TNCs belong to the category of international monopolies. The main goal of TNCs, like any other business structure, is to make a profit. Such companies are created by merging independent national companies from different countries. National monopolies of individual countries enter into agreements and jointly agree on the division of world markets. Previously, such companies were called syndicates and cartels. Among the most famous international monopolies at that time was the international oil cartel, which included American, British and French monopolies.
After World War II, most cartels collapsed. Then companies appeared that bought and created enterprises in other countries. Before the 60s, there were few such concerns.
TNC is a form of international association of capital when the parent company has its branches in many countries, coordinating and integrating their activities.
The country in which the parent company is located is called the home country. TNCs include those companies with an annual turnover exceeding $100 million and branches in at least six countries, but these criteria are not complete. Currently, the UN has added the following criteria for MNCs; shares of assets located abroad, percentage of sales, specific gravity foreign personnel.
The reasons for the emergence of companies are the following aspects:
internationalization of production and capital, providing the opportunity to export capital abroad;
acquiring additional advantages in international trade by overcoming trade and political barriers;
The desire to resist competition.
All transnational companies have a flexible organizational structure and make proper use of scientific and technological progress, which allows these companies to develop and earn large profits. New technology makes it possible to unite into one corporation enterprises specializing in the production of various types of products. A high level of information support makes it possible to manage enterprises located in different countries from one center.
TNCs can be divided into three types; multinational, international and global.
Multinational TNCs are international corporations that unite national companies of a number of countries on a production and scientific-technical basis.
International TNCs are national companies with foreign assets.
Global TNCs are companies based on the integration of economic activities carried out in different countries.
The activities of TNCs are monitored and verified by the UN. The bulk of TNCs are concentrated in the USA (45%), EU countries (29%) and Japan (14%).
With the advent of TNCs, a new form of international capital emerged - transnational capital. This capital has a tighter framework. Which go towards improving and increasing the cost, profitability, potential of the company, etc. Transnational capital serves only for the development of the company to which it belongs.
Interstate regulation.
Financial regulation of flows is determined by international rules and authorities. An important practical document on the regulation of foreign investment is the Voluntary Code of Direct Investment developed within the framework of the Asia-Pacific Cooperation Organization (1994). This document contains the following principles;
investment incentives should not preclude relaxation of health, safety and environmental requirements;
There should be no policy of discrimination against donor countries;
national investment treatment should be provided for foreign investors in the host country;
it is necessary to provide legal support for resolving disputes through consultations and negotiations between the parties or through arbitration;
investment regulations that limit trade and investment growth should be minimized;
Barriers to the export of capital must be removed;
the host country should create conditions to ensure the registration and convertibility of foreign investments.
Conclusion.
In my opinion, everything depends on the economic situation of the country and the priority of national goals and objectives. To attract free capital, the government should provide international organizations with extremely clear and reliable information about the state of the national economy. To do this, it is necessary to introduce uniform standards for budget reporting for all countries on the state of foreign exchange reserves of central banks, balances of payments, etc. For Russia at the moment, in order to improve the economic situation, direct investment is needed. The positive effect of direct investment is that it provides:
growth in employment and income due to the personnel of direct investment enterprises;
expanding the host country's tax base;
certain social and economic stability;
intensification of competition and development of small businesses in national production;
development of related national industries;
mutually beneficial volume of advanced technologies and know-how;
transfer of practical skills and management skills of a direct investor to a direct investment enterprise, etc.
Bibliography
""Money"" Economic weekly of the publishing house "" Kommersant "".
"World Economy" edited by Professor Nikolaeva. Yunti - Dana. M. 2000
"World Economy" course of lectures by S.D. Schlichter, S.D. Lebedev.M., 1998
"International economic relations" Semyonova K.A. M.1997
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Introduction
1.International capital migration: essence, stages and development factors
2. The influence of capital migration on reproductive processes in the Russian economy
3.Trends in international migration at the turn of the 20th and 21st centuries and the status of Russia in this process
Conclusion
List of used literature
Introduction
The purpose of my course work is to study the processes of international capital migration at all its stages.
The massive export of capital from the country continues and has been attracting the attention of economists for several years. Based on the foundations of economic theory and common sense, capital must move from countries with a surplus to countries with a shortage of capital.
By exporting funds abroad in the form of loans to foreign partners or through organizing his own business abroad, leaving his money there in bank and other accounts, or buying foreign securities and real estate - in all these cases, a domestic entrepreneur exports capital from Russia. The Russian state also exports capital, for example, by providing loans to other countries. Capital is imported into Russia along these same lines.
Among the main reasons for the export of capital from Russia are the unstable political situation, macroeconomic instability, the confiscatory nature of taxation, the insolvency of the banking system and unreliable security of property rights. The bad news is that the export of capital entails the loss of productive potential, the tax base and control over monetary aggregates - all of which adversely affects society as a whole and makes it difficult to implement government policies. At the same time, capital flight can be a means of illegal activity. Newspapers and television talk about this, indicating that part of the funds provided by international financial institutions is sent outside the country and remains in individual accounts in foreign banks.
Also, the international movement of capital is of great importance for the development of the world economy, as it leads to the strengthening of foreign economic and political relations of countries, increases their foreign trade turnover, accelerates economic development and contributes to the growth of production volumes, exceeds the competitiveness of manufactured goods on the world market, increases the technical potential of countries. importers, increases employment in the country.
My work is devoted to studying the problems of leakage of state capital and its reflection in the development of the country’s economy as a whole. The subject of the study is the export of capital, its scale and its dynamics.
The purpose of the work is to study the main trends in the export of state capital, their causes, features and consequences.
Research objectives:
1. Consider the concept of “export of capital” on the scale of the global economy;
2. Study the main factors and causes of capital outflow
3. Analyze capital flight from Russia: scale, trends and impact on the economy;
4. Consider the prospects for the development of capital export from Russia.
The topic under consideration is relevant, since the analysis of the “flight” of capital in a difficult economic situation allows us to identify new economic patterns and provide a detailed analysis of the reasons for the current situation. In addition, this topic is of interest due to the dependence of socio-political phenomena on the exchange rate economic reforms and transformations.
1.International capital migration: essence, stages and development factors
1.1 Economic content of capital migration: stages and forms of development
Capital as a factor of production is, first of all, a stock material goods durable goods needed for the production of other goods. Capital, like labor, can move between countries. Moreover, it is characterized by a much higher degree of international stability compared to the labor force. This is explained by the fact that the international movement of capital is a financial transaction, and not the physical movement of people from country to country, as is the case with labor migration.
The movement of financial flows between lenders and borrowers in different countries, between owners and their companies that they own abroad, constitutes international capital flows. Capital migration does not usually involve the physical movement from country to country of industrial buildings and structures, machinery, equipment and other investment goods. When a businessman purchases equipment or any other investment product abroad, such a transaction, as a rule, relates to foreign trade, and not to the international movement of capital. However, if machinery and equipment are transported to another country as a contribution to the authorized capital of a company being created or acquired there, then in this case the transaction will be considered as an export of capital.
On modern stage In the development of the world economy, one of the main factors in the development of international economic relations is the export of capital and its international movements. Such forms of international economic relations as international trade in goods, services, and technologies affect monetary and financial aspects: when carrying out export-import transactions, international payments are carried out, or international loans are required, and during international labor migration, wage transfers are transferred. Thus, international monetary and credit financial relations are a prerequisite for the development of international economic relations and its consequence.
The current growth rate of capital exports in all its forms is faster than the growth rate of commodity exports and the growth rate of GDP in industrialized countries. The largest volume of investments received in the Russian Federation in the first quarter of 2009 was directed from the Netherlands, Luxembourg and Germany, which accounted for 35.9% of all foreign investments in the Russian economy. The volume of foreign investments received in the first quarter of 2009 in the non-financial sector of the Russian economy, excluding monetary authorities, commercial and savings banks, including ruble investments converted into US dollars, amounted to $12.0 billion, which is 30. 3% below the figure for the first quarter of 2008. In the first quarter of 2009, in the form of foreign investors’ income transferred abroad, as well as interest payments for the use of loans and loan repayments, $12.07 billion was withdrawn from the Russian economy, which is an increase 15.3% is less than the same figure for 2008. At the same time, if in the first quarter of 2008 82.6% of the volume of foreign investments received during this period was withdrawn, in the current year this figure was 100.3%. In addition, for the first time in the last three years, investments from Russia abroad exceeded the volume of foreign investments in the Russian economy (the excess is estimated at 63.7%).
Foreign investments in the Russian Federation and investments from the Russian Federation abroad in the first quarter of 1999-2009.
The formation and development of capital migration began much later than such forms of international economic relations as international trade in goods and international labor migration. For the possibility of exporting capital to arise, significant accumulations in the country were required.
This opportunity appears on first stage the evolution of international capital migration, which begins after the completion of the processes of initial accumulation of capital and with the development of capitalist production relations - at the turn of the XVII - XVIII centuries. and lasted until the end of the 19th century. This stage is called the “stage of the emergence of capital export.” Capital migrated exclusively in one direction (from metropolises to colonies) and was of a limited and random nature.
Second phase The evolution of international capital migration begins from the end of the 19th – beginning of the 20th centuries. and until the middle of the twentieth century, that is, as capitalist production relations were established and spread in the world economy. The process of capital export takes place both between industrial countries and between industrial and developing countries. At this stage, the export of capital became a typical, recurring and characteristic phenomenon.
Thus, the export of capital is the process of removing part of the capital from the national circulation of a given country and moving it in commodity or monetary form into the production process and circulation of another country in order to extract higher profits. But at the current level of development of the world economy, it is no longer enough to talk only about the export of capital.
From the mid-50s-60s of the twentieth century. comes third stage evolution of international capital movements, continuing to the present day, in which the ongoing processes are more objectively reflected by the term “international capital migration”. There are several reasons for this:
1. The export of capital is carried out not only by industrialized countries, but also by many developing countries and former socialist countries. Thus, in 2009, foreign investment in the group of developing countries amounted to $152 billion, and they, in turn, exported capital in the amount of $74 billion.
2. Countries simultaneously become both exporters and importers of capital. Thus, capital investments from EU countries to the USA in 2009 amounted to 279 billion dollars, and at the same time capital worth 263 billion dollars was exported from the United States to the EU countries.
3. The export of capital causes significant reverse movements of capital in the form of interest on loans, business profits, and dividends on shares. For example, in 2009 US interest payments on foreign loans amounted to about $87 billion.
Based on the foregoing, international capital migration is a process of counter movement of capital between different countries of the world economy, regardless of the level of their socio-economic development, bringing additional income to their owners.
The classification of forms of international capital movement reflects the various aspects of this process. Capital is exported, imported and functions abroad in the following forms.
First of all, a distinction is made between the migration of loan and entrepreneurial capital. The movement of loan capital is carried out in the form of an international loan, and entrepreneurial capital - through foreign investments.
Based on their intended purpose, a distinction is made between direct and portfolio investments. Direct foreign investment occurs when a branch of a national firm is established abroad or a controlling stake in a foreign company is acquired. In contrast, portfolio investments represent a purely financial transaction for the acquisition of foreign securities in foreign currency. Portfolio investments lead to diversification of an economic agent’s portfolio and reduce investment risk.
According to ownership, private and public capital are distinguished. Private capital is represented by the assets of private firms, commercial banks and other non-governmental organizations that move between countries by decision of the governing bodies of these organizations. This could be investments in the creation of foreign production of a private company, the provision of an interbank loan, an export loan, etc. State capital represents funds from the state budget transferred abroad by government decision. It makes movements in the form of loans, advances, foreign aid, etc.
A specific type of state capital is the capital of international economic organizations (IMF, World Bank, UN, etc.). It is formed from contributions from the member countries of these organizations, and is used not simply at the request of a particular country, but by decision of the bodies of international organizations.
And finally, according to the investment period, short-term and long-term capital are distinguished. Short-term capital is considered to be capital provided for a period of up to one year. Typically these are trade credits to stimulate exports or imports. Long-term capital, represented for a period of more than a year, most often appears in the form of direct and portfolio investments, government loans. Specific forms of capital movement are regulated by the national legislation of individual countries and the charters of international organizations.
The majority of international capital flows are portfolio investment, with the main flows of both direct and portfolio investment flowing between developed countries. This is explained, first of all, by structural changes in the world economy under the influence of scientific and technological revolution, the introduction of knowledge-intensive and capital-intensive technologies, growing requirements for the qualifications of the workforce, increased international specialization and production cooperation.
Each of the forms indicated below can characterize the same migrating capital according to a certain characteristic. For example, in international practice, state capital is often exported in loan form, and private and long-term capital is exported in entrepreneurial form.
Forms of international capital migration
In 2009, more than 53.2% of migrating capital in the world economy belongs to private entities - these are corporations, transnational corporations, banks, mutual funds, insurance, investment and pension funds, etc. In recent decades, in international capital migration there has been a tendency for the share of banks to decrease from 50 % up to 25% and a simultaneous increase in the share of capital of transnational corporations. Almost 75% of migrating capital is private capital, and its volumes are growing. The share of state capital among capital migrating in the world economy in 2009 is estimated at 34%. Among the total volume of capital exported to developing countries, 90% is state capital, and to countries of Eastern Europe and the CIS - about 30% (in the form of preferential loans - 35%, interest-free loans - 65%). According to the IMF, in 2009, the world allocated $128 billion for official development assistance to industrially lagging countries. The leaders in providing such assistance are Japan and the United States. The main recipients of official assistance are Israel and Egypt.
The share of international monetary and credit financial organizations in international capital migration in 2002 is 17%, and it is this that has the highest growth rates. The remaining share of migrating capital comes from mixed entities.
The main forms of international capital migration are the import and export of entrepreneurial and loan capital
| Loans and credits |
| Bank deposits and funds in accounts with other financial institutions |
1.2 Factors in the development of international capital migration. Reasons for international capital migration
The development of the process of international capital migration is influenced by two groups of factors:
economic factors:
Development of production and maintaining economic growth rates;
Deep structural changes both in the global economy and in the economies of individual countries (especially with the impact of the scientific and technological revolution and the development of the global services market);
Deepening international specializations of production cooperation;
The growth of transnationalization of the world economy (the volume of production by foreign branches of US transnational corporations is 4 times higher than the volume of exports from the US itself);
Increased internationalization of production and integration processes;
Active development of all forms of IEO;
political factors:
Liberalization of exports, capital imports;
The Politics of Industrialism in the Third World Countries;
Carrying out economic reforms (privatization of state-owned enterprises, support for the private sector, small businesses);
Employment support policy.
All these factors predetermine international capital migration at the macroeconomic level. Along with this, there is economic feasibility, which directly stimulates subjects to export and import capital. When exporting capital, subjects are guided by economic feasibility, which consists of the following:
Receiving additional profits;
Establishing control over other entities;
Bypassing protectionist barriers put forward on the way of goods flows;
Bringing production closer to new markets (for example, about 200 joint ventures with Italian capital should be created in the CIS for the production of pasta);
Gaining access to the latest technologies(for example, through the acquisition of a controlling stake);
Preserving trade secrets by creating foreign branches. (For example, the Japanese automobile concern Toyota, having penetrated the American market, instead of merging with General Motors, decided to organize its own branch, although the merger would have been more profitable);
Savings on tax payments, especially when creating or registering enterprises in offshore zones and free economic zones;
Reducing environmental costs.
The economic feasibility of importing capital is:
Opportunities for the development of certain new and old industries;
Attracting additional foreign exchange resources;
Expanding scientific and technical potential;
Creation of additional jobs.
Distinctive features modern capital migration are:
1. Increasing the role of the state in the export of capital (it not only facilitates the export, but also acts as an exporter). The export of state capital is carried out mainly to developing and former socialist countries, mainly in the form of loans. Public funds flow to these countries not only on a bilateral, but also on a multilateral basis: through international and regional financial organizations.
2. Strengthening the migration of private capital between developed countries.
3. Increasing the share of foreign direct investment.
The main reasons for the export of capital are:
1. Profit.
The richest countries in the world have an “excess” of capital, which does not find profitable application within the country and seeks profit outside its borders. That is, if the domestic market is saturated with goods and services, then investing capital in further expansion of the production of these goods and services within the country is pointless; it does not bring the desired profit. Therefore, capital is exported abroad, where there are cheap raw materials, cheap work force, profitable terms sales of products, which means the rate of profit is much higher than in one’s own country.
2. International division of labor.
In the conditions of the modern scientific and technological revolution, the international division of labor takes on the character of technological and detail specialization. This means that it is more profitable to produce components and parts for technically complex products in those countries that have comparative advantages over other countries. Moreover, in conditions modern production The production of some types of knowledge-intensive and technically complex products is pre-designed not for a narrow national or regional framework, but for the global economic space. (For example, production of cars, computers, etc.)
3. Customs barriers.
In a situation where many states limit the import of goods by imposing high customs duties on imported goods, the export of capital is one of the ways to bypass these barriers. The construction of enterprises abroad and the sale of manufactured products there gives capital exporters such an opportunity.
4. Ecology.
Many developed countries today, paying great attention to their own environmental safety, build environmentally harmful enterprises abroad, importing into their own country finished products manufactured at these enterprises (medicines, chemical industry, etc.).
5. Politics.
The export of capital in the form of government loans often pursues political rather than economic goals. Therefore, state capital can also be exported to countries with high degree investment risk. In addition, changes in the political situation in the country can greatly influence the import of capital, since a foreign investor is very sensitive to changes in the political situation in the country where capital is invested.
1.3 Indicators of country participation in the process of capital migration
A country's participation in the process of international capital migration is reflected in a number of indicators. Absolute indicators are identified, for example, the volume of capital exports, the volume of capital imports, the balance of export-import of capital, the number of enterprises with foreign capital in the country, the number of employees employed in them, etc. Based on the balance, the countries of the world economy are classified as countries predominantly exporting capital (Japan , Switzerland), predominantly importing countries (USA, UK) and countries with an approximate equilibrium (Germany, France).
Another group of indicators are relative ones, which more realistically reflect the current balance of power in international capital migration and the country’s dependence on the export-import of capital. Among them:
1. Capital import coefficient (KIK), reflecting the share of foreign capital (FC) in the country’s GDP:
(among European countries the highest level is in Belgium and Luxembourg; in the Republic of Belarus it is 0.04)
2. Capital export coefficient (KEK), reflecting the share of exported capital (EC) in relation to the country’s GDP (or GNP):
(among European countries the maximum level is in the Netherlands, in the Republic of Belarus - 0.05);
3. Coefficient reflecting the share of foreign capital to domestic investment needs in the country:
where Kp is the demand coefficient, IC is foreign capital, D(K) is the demand for capital in the country. (For example, in the USA, about 33% of all domestic needs are satisfied by foreign capital, in the Republic of Belarus - 54%.);
4. Other relative indicators - the share of foreign or mixed companies in national production, the growth rate of exports, capital imports in relation to the previous period, the amount of foreign investment per capita of the country.
Analysis of the characteristics and indicators of the investment situation of individual countries, taking into account current trends in international capital flows, made it possible to determine the main indicators characterizing the country’s participation in the IBC, which are presented in the diagram
The main models of countries' participation in the IBC - American-European, Asian, Chinese, Russian (Eastern European) - differ in the following indicators: the ratio of the current account balance and operations related to capital flows, the structure of investments, shares in the international capital market, investment politics, institutional environment. The analysis of these models, taking into account the positive results of economic development of a number of countries, made it possible to identify signs or indicators of a country’s effective participation in the IBC.
The degree of efficiency is characterized by the following groups of indicators: economic efficiency, structural (qualitative) efficiency, institutional efficiency, degree of risks and imbalances in the movement of capital.
To determine the economic efficiency of a particular country’s participation in international capital flows, it is proposed to identify a number of evaluation criteria (indicators) showing how much one or another aspect of a country’s participation in international capital flows meets the national interests of the country and the private investor. The criteria are formed on the basis of balance of payments data: capital account balance (ISK), investment transaction balance (ISI), direct investment transaction balance (ISPI), portfolio investment transaction balance (ISPRI), balance of other investment transactions ( ISPOI), loan balance (ISK), investment income ratio (ISD), investment comparative rate indicator (ISR), capital flight indicator (IKF), external debt indicator (IED). To assess the economic efficiency of a country's participation in the global capital market, the actual values of the given indicators are compared with the basic or “ideal” values. For example, for the balance of transactions related to the movement of capital, the balance of transactions for all types of investments, investment income, the base is the positive value of the corresponding indicators.
Structural or qualitative analysis the effectiveness of a country’s participation in the world market includes an analysis of the structure of capital flows into and out of the country by type of investment, economic sector, country, and economic sector. Structural analysis of investment and income flows by type of investment and income from the corresponding investments (direct, portfolio and others) allows us to determine a set of relevant indicators of the effective structure of international investment flows. The sectoral structure of incoming and outgoing investments is also important. Its analysis allows us to determine a set of indicators of the structural (sectoral) efficiency of investment flows.
According to the authors of an interdisciplinary approach to analyzing the export of capital from Russia, the following main groups of countries of origin of foreign investments are distinguished: neighboring dynamically developing countries, offshore zones and developed Western countries with a high standard of living, which determine the main interests of investors.
It can be assumed that the export of capital is carried out:
– to offshore zones – to minimize taxes;
– to neighboring countries with dynamically developing economies – for business development;
– to countries with a high standard of living – for savings in case of crisis/persecution.
Indicators of structural country efficiency reflect the degree to which the actual country structure of international investment flows approaches the optimal, from the point of view of national interests, ratio of investments coming from offshore zones, neighboring dynamically developing and developed countries and exported to similar groups of countries.
When analyzing the structural efficiency of a country’s participation in the IBC in the context of economic sectors (public, private, banking), the balance of investment income and expenses for the operations of each sector is assessed, taking into account the degree to which the ratio of the shares of each sector in the IBC approaches its optimal structure.
The institutional effectiveness of a country's participation in the IBC reflects the effectiveness of the interaction of national government institutions with private investors and international institutions. The role of the state in increasing the efficiency of the IBC is not only to create a favorable investment climate for attracting foreign investment, but also to develop effective investment of national capital abroad. Indicators of the institutional effectiveness of a country’s participation in the IBC include the following: indicator of interaction with international financial and investment institutions, the degree of support for the export of national capital, investment climate, the effectiveness of national export agencies, export risk insurance systems, information support for national and foreign investors, the degree of liberalization of the system currency regulation. An important indicator of a country’s effective participation in the IBC is the degree of risks and imbalances characteristic of capital flows entering the country and sent out of it.
It is believed that too large a deficit or surplus of the country’s current or capital account, both as a whole and in relation to individual regions, is an indicator of the country’s weak protection from the influence of the international financial crisis, or even its possible source. Countries with imbalances draw up and submit to the IMF a program to reduce imbalances, and the IMF, in turn, provides appropriate advice on the submitted programs.
According to a number of studies of the causes and indicators of currency crises, indicators of such crises also include a fixed or managed exchange rate, a weak national currency, too rapid liberalization or, conversely, too many restrictions on operations related to the movement of capital, too high a share of exports to GDP, large external debt.
To the above disproportions we can add the uneven distribution of foreign investment across regions and sectors of the economy, the share of short-term obligations to foreign investors or the volume of speculative capital flows, the share of capital flight in total volume capital exported from the country.
Based on the stated economic, structural and institutional criteria and risk indicators, it is possible to construct a model for a comprehensive assessment of the effectiveness of a country’s participation in the IBC, which boils down to the following formula:
where EK is an indicator of the comprehensive effectiveness of the country’s participation in the IBC, EM is an indicator of the economic efficiency of the country’s participation in the IBC, ES is an indicator of the structural efficiency of the country’s participation in the IBC, EI is an indicator of the institutional effectiveness of the country’s participation in the IBC, ER is an indicator of the level of risks and imbalances in capital flows .
Methodological features of assessing a country’s participation in international capital movements are based, firstly, on components of this process, mainly, its multi-criteria, and secondly, the ability to evaluate such effectiveness at various levels: the effectiveness of a country’s participation in the international movement of capital relative to the rest of the world, relative to a union of countries, and, finally, relative to a single country. Assessing the efficiency of international capital flows at various levels will allow us to identify weaknesses, identify and take specific steps and measures to improve it at the appropriate levels (global, intercountry).
As a prospect for developing this problem, we can determine the anti-crisis potential of a set of given economic and structural indicators, which, at certain values, together with other indicators characterizing the state of the national economy, can serve as signals of an approaching financial crisis.
2. The influence of capital migration on reproduction processes in the Russian economy
2.1 Prerequisites for the emergence of capital flight from Russia
If we analyze most of the arguments on this topic, it turns out that capital is fleeing from a bad investment climate to a good one. Indeed, during a period of permanent political and macroeconomic instability, high taxation, underdeveloped banking system and financial markets, citizens and enterprises are forced to purchase foreign currency to preserve capital, and sometimes simply to survive.
Many owners of large fortunes in Russia are unsure of its legal origin; they see the only way out for themselves in exporting their earnings abroad. Others do not strive or are unable to earn money legally; managing capital effectively is more difficult than receiving tax-free profits through offshore companies. And such citizens and enterprises will engage in unofficial capital export in any investment climate. The socio-psychological series of prerequisites for the increased outflow of capital from Russia should be supplemented by the extremely short “credit history” of the renewed Russia. Moreover, in this story there was a default. Unfortunately, only time can correct this shortcoming.
However, the most difficult in terms of weight and understanding of the factors that determine the dynamics of the movement of capital lie in a completely different plane - these are the factors of capital formation: saving and accumulation (or investment).
Saving is the part of personal or business income that is not spent on current consumption.
Based on gross national savings, that is, the savings of all economic entities, capital is accumulated and then used, including for export abroad.
The whole point is that the scale of capital export depends not only on the conditions for its use in Russia, but primarily on the dynamics and correlation of the first two factors - savings and accumulation. An increase in capital exports can come from excess saving. Strange, but this is exactly what has been observed in recent years in far from rich Russia. The volume of savings exceeds investment opportunities in the country, so the excess capital flows abroad. This is evidenced by the fantastically high values of Russia's foreign trade balance in 1999 - $42 billion, in 2009 - $82.9 billion.
And in general, a positive balance has always been characteristic of Russia; its minimum value - “plus” 1 billion dollars - was obtained in the most unfortunate of recent years - 1998. In the United States, the trade balance in 2000 was about minus $250 billion. It was for this amount that Americans bought more goods than they sold. A similar situation has been going on there for more than one year, and some experts, based on the impressive figures of the negative trade balance, predict a collapse financial system USA and dollar devaluation. In fact, so far everything is moving in the completely opposite direction. The United States is a net importer of capital due to its enormous investment opportunities, so the flow of capital from abroad is only increasing.
And in general, in developed countries (except Japan), investments exceed savings; in developing countries and Russia, savings exceed investments. Therefore, the favorable economic environment of the last two years has led to a significant increase in capital exports from Russia and a slight increase in investment within Russia itself.
Another serious reason for increasing capital outflow is external loans from the Russian government. Loan servicing payments can also be included in the amount of inefficiently exported capital.
We can sum it up as follows: Russia has enough of its own savings to avoid borrowing from the International Monetary Fund, the World Bank, etc. Instead of drawing up all kinds of programs that are written for the IMF, the government should seriously begin to create investment and financial instruments that would allow savings to remain in the country.
The problem of capital flight cannot be solved overnight - neither by the amnesty proposed by many for those who took capital out illegally, nor by the liberalization of currency legislation. This problem is too complicated and complex. Therefore, we can say for sure that capital outflow will continue in the coming years.
2.2 The influence of external capital migration on the efficiency of the reproduction process
With the help of global reproductive processes, the vital activity of the planet's population is supported. From the consideration of the reproduction cycle, it is known that it distinguishes a stage of production associated with distribution, exchange, consumption, and accumulation.
People's needs have the property of continuous increase and qualitative change. People always want to have more and better. But in order to have, you must produce, and as you consume, reproduce again and again in greater and more at its best products, goods, services. That is, consumption stimulates production and turns simple reproduction into expanded, changing the qualitative and quantitative appearance of production itself. However, not only consumption affects production, but also production affects consumption. The development of science, technology, technology gives rise to fundamentally new possibilities for production, creation of goods and services. Every twenty years, the number of types of goods produced in the world doubles. Emerging new types of goods are generated by the improvement and development of production itself. In addition, along with the final consumption of products, goods, and services by the population, there is also internal, industrial consumption. Production uses raw materials, materials, energy, machines, and technological equipment, which, together with final consumer products, must be continuously produced again, that is, reproduced. Therefore, the production of means of production (objects and means of labor) is the basis of social production. Expanding the reproduction of means of production is required condition socio-economic progress. The production of means of production is concentrated in industries that together constitute the so-called heavy industry. Expanded reproduction of the means of production is a prerequisite for human progress.
Means of production
Industry structure
heavy industry
Branches of the mechanical engineering complex
Branches of the fuel and energy complex
Ferrous and non-ferrous metallurgy
Chemical and petrochemical industry
Forestry, wood processing and pulp and paper industries
Construction materials industry
The material basis of any product is raw materials directly extracted from surrounding nature(oil, ores, coal, timber, etc.), and processed semi-finished products, which are raw materials for the production of finished products (metals, wood, etc.).
All the diverse types of raw materials consumed by modern industry are usually divided into two large groups:
Industrial raw materials;
Agricultural raw materials.
In turn, industrial raw materials are divided into:
1. Raw materials of mineral origin (ores, coal, oil);
2. Raw materials obtained artificially (synthetic rubber, plastics, artificial fiber, etc.).
It should be noted that in the balance of consumed in modern conditions natural resources, the share of fuel and raw materials of mineral origin is estimated at almost 80%. The importance of raw materials and fuel for the national economy of any state is extremely high, their share ranges from 10-15% in mechanical engineering products to 80-90% in chemical products. The dynamics of production and consumption of certain types of mineral raw materials shows that the most rapid growth in production and consumption of the so-called new types of raw materials and fuel is occurring.
Instruments of labor and, above all, machinery and equipment tend to grow at a higher rate in their international trade compared to production. The leaders in the production and export of machinery and equipment are the USA, Japan, and Germany, which account for more than 60% of the total production of machinery and equipment in industrialized countries.
From the standpoint of social production, man is not only its subject, but also its ultimate goal. The social product, having gone through distribution and exchange, completes its journey in consumption. Without personal consumption, any production is meaningless. Satisfying needs and its development is the natural final purpose of social production, regardless of its socio-economic form. And this leads to the need for expanded reproduction of personal consumption items and services.
Manufacturing related industries
personal consumption items and services
Industries related to
production of items
and personal consumption services
The central problem of modern economics is determining the needs of national economies for means of production, consumer goods and services.
If these needs in countries with a market economy are determined by coordinating supply and demand, then in countries with a centralized economy by developing material balances. Since in the world there is neither a market nor a centralized economy in its pure form, the methodology for determining the needs for means of production and consumer goods organically combines both methods. For countries with economies in transition, it is characteristic that the need for the most important types of means of production is determined by developing material balances using progressive technical and economic standards. The development of program and forecast documents on socio-economic development begins with calculating the need for the main types means of production. At the same time, the circle of consumers of this product and the needs of each of them are determined.
Scheme of material balance of means of production (type of product)
In current practice, the need for means of production is determined by various methods, which depend on the type of product, its purpose and a number of factors.
The market fund includes products intended for sale through the state and cooperative trading networks. In the balance of means of production, the market fund is an insignificant amount. The need for it is determined based on requests from trading organizations or based on sales volumes in past periods.
Exports are products intended for sale to foreign countries. The need for products for export is determined in accordance with foreign trade agreements.
The state reserve is intended for the event of various kinds of unexpected events (natural disaster, war, etc.). The need for the state reserve consists of two parts:
1. Of the increase in government reserves, this part depends on many factors, including the international situation, etc.;
2. From updating reserves, since the shelf life of products has a limit: after a certain period, the means of production previously put into the reserve must be replaced with newly produced products.
The size of the exchange fund depends on the storage of products in previous years and their shelf life. The current reserve is intended to prevent and eliminate imbalances in socio-economic development. It is spent by order of the government in the same year in which it is created. The size of these reserves is determined based on the experience of past years. Suppliers' balances at the end of the forecast period are formed from products that were manufactured in the last days of the calendar period and were not shipped to the consumer. The amount of balances with suppliers is determined based on data from the previous period, adjusted for changes in the volume of product production and the timing of shipment of products. The total need of the national economy for means of production is established by summing up all balance sheet items. Satisfaction of needs is the final purpose of social production, regardless of its socio-economic form. This leads to the need for expanded reproduction of food, housing, furniture, scientific services, medicine, etc. Currently, the share of industrialized countries in world food exports tends to increase: for dairy products it exceeds 95%, for grains - 80%, for vegetables - 60%. Food exports in developing countries exceed 90% (sugar over 50%, fish, fruits - 35%, grain, meat - 25%).
Balances of consumer goods are compiled for the most important types of food and non-food products (balances of flour, meat, sugar, fabrics, shoes, furniture, etc.). The most important task in developing balances of consumer goods is to most fully satisfy the needs of the population, taking into account scientifically based nutritional standards and rational standards of consumption of non-food products.
In the balance sheets of consumer goods, the main item of needs is the market fund. Need in individual subjects consumption for sale through the distribution network is currently determined for different goods using different methods. The main method is to determine, based on scientifically based consumption standards, the number of people buying a given product in a retail chain.
The industrial processing fund takes into account goods that are the main raw materials for various industries industry. As a result of industrial processing, another consumer item is obtained. For example, the industrial processing fund includes flour, sugar for the confectionery industry, fabrics for the clothing industry, etc. The need for goods for industrial processing is determined by the direct counting method.
The non-market fund includes goods that are consumed without going through the trading network. It includes: a) an industrial consumption fund, which takes into account goods that are auxiliary materials for industries (for example, fabrics that are used in the automotive, furniture, footwear and other industries). The need for goods for industrial consumption is determined based on the planned volume of production and consumption rates per unit by direct calculation; b) a special clothing fund allocated to supply special types of clothing and footwear to workers in certain sectors of the national economy, who enjoy the right to receive it free of charge according to established standards. The need for workwear by industry sector is determined based on the number of workers, wearing periods and current issuance standards, which are established separately for different professions taking into account their working conditions; c) a fund of state budgetary organizations, including goods for medical, health, children's and other institutions. The need for non-food products (linen, dishes, furniture, etc.) according to the fund of state budgetary organizations is determined in approximately the same way as the workwear fund. The supply of state budgetary organizations with food products occurs at the expense of the market fund.
Simultaneously with calculations of the need for material balances, the size and sources of resource receipt in the forecast period are determined. These include:
Product balances at the beginning of the forecast period, which are determined as expected based on data on the possible production program;
Production is the main item, accounting for 90-95% of all resources; the required production volume should be calculated;
Imports, which are determined on the basis of long-term foreign trade agreements;
Other income generated by reuse metal, fuel, forest materials, etc.
The total demand for products serves as the basis for determining the required volume of production in the forecast period.
3.Trends in international migration at the turn of the 20th and 21st centuries and the status of Russia in this process
Among the new trends in the process of international capital migration are the following:
1. The export of private capital is growing at a faster rate compared to the growth of the export of state capital.
2. The United States has become a major importer of capital. Approximately 5 million Americans now work in enterprises owned by foreign investors.
3. The trend of cross-migration of capital within industrialized countries is clearly visible.
Industrialized countries as a whole account for more than 70% of all foreign investment. This situation is explained by the fact that the growing industries are the automotive industry, the electronic and electrical industry, telecommunications and communications, information Technology, the development of which requires a qualified workforce and high solvency of the population.
4. A number of developing countries act as capital exporters (Singapore, Hong Kong (Hong Kong), the Republic of Korea, Saudi Arabia, Brazil and a number of other countries). It is impossible not to notice that the leading OPEC countries mainly export loan capital (mainly to the USA). Moreover, the volumes of export of loan capital from these countries depend on world oil prices and
petroleum products.
5. Former socialist countries, especially Poland, Hungary, the Czech Republic, and the PRC, are increasingly involved in the process of capital migration. Russia and other CIS countries have joined this process.
The active participation of countries with economies in transition in the international investment process should help improve the efficiency of their economies.
Russia does not stand aside from the processes of international capital migration. It is strange, but Russia, resorting to foreign loans, is one of the world's largest exporters of capital. According to " Round table business of Russia" in the mid-90s, the total volume of resources located abroad, including exported and invested capital, foreign debts amounted to a huge amount - from 500 to 600 billion dollars. At the same time, the export of capital, which began in the late 80s, continues .
Thousands of companies with Russian capital operate abroad. Some of them were founded there back in Soviet times, but most of them were founded in recent years. According to some estimates, the volume of investments of these Russian enterprises abroad amounts to 9-10 billion dollars. For comparison, for example, similar investments in the United States are approaching 1 trillion. dollars, and in Japan and Great Britain they amount to several hundred billion dollars.
The majority of Russian foreign business investment is in the West, including in offshore centers and tax havens. Foreign capital investments of Russian individuals and legal entities in loan form are also predominantly located there (i.e., bank deposits, funds in the accounts of other financial institutions, etc.). Some of them are placed for a short period of time to carry out current foreign economic operations. Their value is estimated at 25-35 billion dollars.
The export of capital from Russia is carried out in two ways: legally and illegally, taking the form of “capital flight”.
The legal route for the export of capital is based on Resolution of the Council of Ministers of the USSR dated May 18, 1989 No. 412 “On the development of economic activities of Soviet organizations abroad.” In this regard, the legal export of capital includes all state and non-state enterprises created in accordance with this resolution and included in State Register foreign enterprises created with Russian participation.
The bulk of private capital is exported from Russia as part of the so-called “capital flight”. It began in 1989, when the USSR government decided to grant enterprises, associations and organizations the right to directly enter foreign markets. The process of capital outflow from Russia has intensified since 1990. In order to imagine what losses Russia is suffering as a result of this process, we can cite the following figures: the annual capital flight is estimated at 12-24 billion dollars (according to some estimates, up to 50 billion. Doll.). For comparison: the entire export of petroleum products in 2009 amounted to $29.3 billion.
Currently, capital flight has begun to take on sophisticated forms that are not always amenable to legislative control. This process, in particular, includes:
Export proceeds not transferred to Russia. In 1999 alone, its volume amounted to about 4.6 billion dollars. In 2009, this figure amounted to 2 billion dollars. The largest shortfalls in the federal budget were noted for such types of goods as oil, petroleum products and non-ferrous metals.
Understatement of export and overestimation of import prices, especially actively used in barter transactions;
Making advance payments under import contracts without subsequent delivery of goods and crediting currency to foreign accounts of Russian residents. Experts estimate currency leakage during import operations at $3-4 billion per year.
As a result of unfair barter transactions, about $1 billion leaks out of Russia every year.
Smuggling of hard currency and other tricks.
Some economists propose to include in the concept of “capital flight” also lost profits for the Russian economy in the framework of foreign trade operations, as well as foreign currency in the internal turnover of the Russian economy.
Capital flight is typical for countries with galloping inflation, high taxes and political instability. All this is typical for Russia. To these reasons we can add factors of distrust in the state, lack of benefits and incentives for storing and investing capital within the country.
“Fleeing” from Russia, private capital is exported abroad not so much for classical reasons, but because of the desire of its owners to place it in a more stable economy. At the same time, remembering crime in the 90s, it should be noted that a considerable part consists of funds acquired illegally, the export of which abroad is one of the ways to “launder” them. This process is typical not only for Russia, but also for many countries where there are significant criminal structures.
The Russian government is trying to limit and take control of the process of capital flight abroad, turning it into a canalized, controlled export of capital.
Control over the movement of foreign currency funds is, first of all, control over banking institutions that carry out transactions for their transfer. Such movement outside Russia can be carried out in two forms: cash and non-cash. The first form is the competence of the customs authorities, the second - mainly the Central Bank of Russia. It is also important that the funds of Russian enterprises and organizations are in the accounts of Russian banks. If they go to the accounts of foreign banks (and this is exactly what is happening now), they will be beyond the reach of Russian regulatory authorities.
It must be borne in mind that any system of control and regulation must be comprehensive and implemented entirely so as not to create new holes for capital flight.
As part of the creation of a comprehensive system to prevent or significantly reduce capital flight, the following measures are proposed. First of all, strengthening state regulation of Russian foreign investments, directing them to the most profitable, investment-friendly countries, zones, and regions. For example, to the CIS countries, free economic zones, the Asia-Pacific region. The feasibility of investments by Russian companies abroad should be determined by national interests. Priority should be given to the development of domestic Russian production.
Limiting the process of "capital flight" can be carried out by applying the following specific measures:
1. Unified customs and currency control over the repatriation of proceeds from the export and import of goods and services;
2. Special control over barter transactions;
3. Licensing of capital export;
4. Inventory of Russian investments abroad, ascertaining the actual number of enterprises and volumes of capital investments.
The importance of administrative measures cannot be exaggerated, since the driving force behind the activities of enterprises abroad is economic interest, and it is this that determines the direction and nature of the movement of capital. A strategic measure to reduce “capital flight” abroad should be the creation of an investment climate in Russia that would be attractive both for domestic Russian capital and for foreign investments seeking profitable use.
Conclusion
In the course of the work, the processes of international capital migration at all its stages were studied, as a result of which the following conclusions can be drawn:
1. By exporting funds abroad in the form of loans to foreign partners or through organizing his own business abroad, leaving his money there in bank and other accounts, or buying foreign securities and real estate - in all these cases, a domestic entrepreneur exports capital from Russia. The Russian state also exports capital, for example, by providing loans to other countries. Capital is imported into Russia along these same lines.
2. Comparing the situation in Russia and other countries, while in other countries with economies in transition capital outflow has slowed down or stopped, in Russia it has reached unprecedented levels. The ineffectiveness of capital controls in stemming the outflow of funds from the country over the past few years is obvious. The export of capital can only be finally overcome through a strategy aimed at improving management principles and macroeconomic performance, as well as strengthening the banking system.
3. One of the main conditions for the survival of the Russian economy in the coming years is a sharp reduction in the export of capital, and efforts to return at least part of the exported, in principle, stolen funds to Russia. Russia has the right to count on the assistance of governments and law enforcement Western states. Of course, the first and effective steps in this direction should be taken by the Russian government, which is most interested in the return of these funds. It is necessary to ensure favorable conditions for investment within the country, and the conditions are even more favorable than investment in any other country in the world community.
4. The main reasons for capital outflow are:
a) unstable political situation, macroeconomic instability, confiscatory nature of taxation, insolvency of the banking system and inadequate enforcement of property rights. What's worse is that when capital is removed, productive potential, the tax base and control over money are lost - all of which adversely affect society as a whole and make it difficult to implement government policies. At the same time, capital flight can be a means of illegal activity - part of the funds provided by international financial institutions is sent outside the country and remains in individual accounts in foreign banks.
b) inconsistency of reforms, weakness of the institutional framework, including that expressed in corruption. Capital controls, while providing some short-term benefits by mitigating the volatility of capital flows, are still ineffective in terms of medium-term objectives of preventing capital outflows, and are very costly because they lead to increased corruption. Thus, the medium-term strategy should include a timetable for the gradual removal of controls while simultaneously implementing comprehensive measures to improve governance and macroeconomic indicators, as well as to strengthen the banking system.
List of used literature
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2. Gurova I.P. World economy: Textbook / I. P. Gurova. - M.: Omega-L, 2008. - 394 p.
3. International economic relations: Textbook / ed. V. E. Rybalkin. - 6th ed., revised. and additional - M.: UNITY-DANA, 2007. - 591 p.
4. International economic relations: Textbook / ed. B. M. Smitienko. - M.: INFRA-M, 2007. - 512 p.
5. World Economy: Textbook / edited by Prof. A.S. Bulatov. - 2nd ed., revisions and additions. - M.: Economist, 2007, Ch. 27.
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10. Data from Rosstat www.gks.ru
National economy to others. Internal migration of capital leads to equalization of the rate of return on invested capital at enterprises in various sectors of the national economy.
Reasons internal movement capital can be:
- discovery and development of new types of resources on the territory of the country, in particular mineral deposits;
- creation by the state of certain benefits in order to implement national programs for the economic and social development of individual territories;
- other reasons.
International capital migration
International capital migration (IMC) is one of the forms of international economic relations that has received accelerated development since the second half of the twentieth century, and is currently a determining element in the functioning of the world economy and the development of other forms of international economic relations.
Reasons for international capital migration
Within the framework of international capital migration, a distinction is made between export, or export of capital, and import, or import of capital. Each party in international capital migration tries to extract its benefits from the export or import of capital.
The exporter of capital tries to obtain a higher rate of return on invested capital in another country or to obtain other economic or political benefits. The reasons for the export of capital can also be:
- The unevenness of capital accumulation in different countries and the emergence of a relative surplus of capital in some national markets;
- Inability to effectively invest capital or invest it at a high rate of return;
- The presence of customs barriers that prevent the export of goods, which leads to the replacement of the export of goods with the export of capital to penetrate commodity markets;
- Bringing producers closer to sources of raw materials;
- Other reasons
The importer of capital may also pursue economic (raising capital for the development of certain industries and production, development of natural resources, increasing employment, creating preconditions for further economic growth) or political benefits. In particular, the reasons for importing capital may be:
- The import of capital from abroad opens up opportunities for the development of new industries, modernization and expansion of production of products that are in significant demand;
- Introduction of world scientific and technical achievements;
- Expansion or increase in the number of jobs;
- Other reasons
Forms of international capital migration
As part of international capital migration, a portion of capital is withdrawn from the national circulation of one country and moved into production and circulation in another country. The transfer of capital can be carried out in commodity or monetary form. The commodity form of capital movement is represented by export credits, as well as contributions to the authorized capital of an enterprise or firm being created or purchased abroad in the form of various assets: machinery, equipment, vehicles, buildings.
From another point of view, MMK is carried out in the form of the movement of entrepreneurial and loan capital. Entrepreneurial capital can be realized through the organization (creation or purchase) of subsidiaries, branches or mixed companies, joint ventures.
Entrepreneurial capital comes in the form of direct or portfolio investments.
Loan capital can be state (official) and non-state (private). Loan capital can also be represented by the capital of: the World Bank, the International Monetary Fund, and other regional international financial organizations.
Loan capital raised from official and private sources can be used to replenish foreign exchange reserves, cover the budget deficit, service external and internal debt, implement macroeconomic stabilization measures and structural changes, for social payments, purchase goods in conditions of commodity shortages and other needs. Loan capital in the form of short-term and long-term syndicated loans provided by a syndicate of lending banks is also used by private borrowers.
This kind of movement of loan capital is often very mobile, often associated with changes or upcoming changes in exchange rates, changes in interest rates and other economic conditions and is therefore called “hot money”. Significant movement of "hot money" in search of better conditions application can sharply worsen the balance of payments and cause a crisis in the currency of a given country.
Thus, international capital migration can have an important impact on a country's balance of payments.
Regulation of capital migration
Due to the fact that capital migration has a significant impact on the economic development of the country, it is regulated by the state. Methods of such regulation are currency restrictions and currency control.
In recent years, in most developed countries, the prevailing trend has been the abolition and lifting of restrictions on the international movement of capital thanks to agreements within the World Trade Organization (WTO), the adoption of the Code of Liberalization by the Organization for Economic Co-operation and Development (OECD), and the European Energy Charter.
Notes
- Raizberg B.A., Lozovsky L.Sh., Starodubtseva E.B..(Russian) . Modern economic dictionary. - 2nd ed., rev. M.: INFRA-M. 479 pp.. 1999.. Archived
- Migration of capital (Russian). Modern economic dictionary. Archived from the original on June 7, 2012. Retrieved May 10, 2012.
- Migration of capital (Russian). Great Soviet Encyclopedia. Archived from the original on June 7, 2012. Retrieved May 10, 2012.
- Loskutov V.A. International capital migration (Russian). Fundamentals of modern economic theory. Archived from the original on June 7, 2012. Retrieved April 10, 2012.
- Ermishin P.G. International capital migration and its modern features (Russian). Basics of economic theory. Administrative and management portal. Archived from the original on June 7, 2012. Retrieved May 10, 2012.
- The essence and forms of international capital movement (Russian). Economy. Federal Fund for training courses in the humanities and socio-economic disciplines. Archived from the original on June 7, 2012. Retrieved May 10, 2012.
Literature
Foreign Economic Explanatory Dictionary / Ed. I.P. Faminsky.-M., 2000
See also
Wikimedia Foundation. 2010.
See what “Capital Migration” is in other dictionaries:
The movement of capital from one industry to another industry or from one country to another country. In English: Flou of capital See also: Money capital Financial Dictionary Finam ... Financial Dictionary
See CAPITAL MIGRATION. Antinazi. Encyclopedia of Sociology, 2009 ... Encyclopedia of Sociology
The movement of capital within one state, as well as from one state to another for the purpose of more profitable use or preservation. M.k. can occur together with its owner or without moving its owner.... ... Dictionary of business terms
The movement of capital from one industry to another or from one country to another. Raizberg B.A., Lozovsky L.Sh., Starodubtseva E.B.. Modern economic dictionary. 2nd ed., rev. M.: INFRA M. 479 p.. 1999 ... Economic dictionary
CAPITAL MIGRATION- movement of capital from one industry to another or from one state to another... Legal encyclopedia
CAPITAL MIGRATION- movement of capital within the territory of one country, as well as from one country to another (international capital) in search of areas of more profitable application. Internal migration is associated with the discovery of new mineral deposits,... ... Foreign economic explanatory dictionary
As a phenomenon, it began to actively develop during the formation of the world economy.
Transfer of capital abroad (export of capital)- this is a process during which a part of capital is withdrawn from the national circulation of one country and placed in various forms (commodity, money) in the production process and circulation of another, host country.
International capital movement means the migration of capital between countries, generating income for their owners.
Foreign investments can be different in nature and form.
Thus, according to their sources of origin, they are usually divided into public and private capital.
Government investment is also called official; they represent funds from the state budget that are sent abroad or received from there by decision either directly from governments or from intergovernmental organizations. This government loans, loans, grants (gifts), assistance, the international movement of which is determined by intergovernmental agreements. This also includes loans and other funds from international organizations.
Private capital– these are funds from non-state sources placed abroad or received from abroad by private individuals (legal entities or individuals). This includes investments, trade loans, interbank lending; They are not directly linked to the state budget, but the government keeps their movements under review and can, within its powers, control and regulate them.
Economic transnationalization is characterized by the following functions:
- gives business entities wider access to resources;
- allows you to produce products for a capacious market of integration groups;
- protects firms that are part of a transnational corporation from competition from firms in third countries;
- allows participants to jointly solve pressing social problems.
The emergence of transnational corporations and the active internationalization of the economy lead to processes of globalization of economic life, when the economies of different countries not only intertwine, but also merge and interpenetrate. These processes affect not only the economy, but also politics, ecology, social and demographic environment. These processes also give rise to global issues, which are classified into 3 groups:
- issues related to the relationship between various socio-economic systems (war and peace, disarmament, etc.);
- issues arising in the system of relations “person - society” (fight against poverty, disease, etc.);
- issues arising in the system of relations “society - nature” (environmental protection, resource protection, etc.).
The processes of internationalization, transnationalization and globalization occurring in the world economy open up new opportunities for deepening international specialization, increasing the scale of production, reducing costs and increasing the competitiveness of goods.
