Download Russia's Multilateral Aid Bilateral and multilateral sources of development

Russia's Multilateral Aid
Bilateral and multilateral
sources of development
finance: evidence from Russia
Anna Abalkina
31 October-1 November, Tokyo
Russia is a net exporter of capital
Difference between gross savings
and gross capital formation
Outward stock of Russian
investments, $billion
200.
20
15
10
5
0
-5
150.
100.
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
50.
0.
2005
2006
FDI
Net international investment
position of Russia, $billion
300
200
100
2015
2014
2013
2012
2011
2010
2009
2008
2007
-200
2006
-100
2005
0
2007
2008
2009
Portfolio investments
2010
2011
2012
2013
Other investments
• Paradox: Russia has a relatively
low level of financial
intermediation and significant
export of capital
• Search for additional external
spheres and geographical
diversification of capital
application
Russian ODA
900
0.07
Growing level
of ODA
800
0.06
600
500
0.05
Anti-crisis action
0.04
400
300
0.03
200
0.02
100
0
0.01
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
ODA, $million
ODA (%GNI)
ODA (%GNI)
ODA, $million
700
In 2014 Russian ODA represents 0,049% of GNI, the highest share since
2009
Multilateral aid
• Commitments to implement
international community
initiatives
• Russia designs its own
multilateral aid agenda
• Trust-funds
• Multilateral development
banks
Bilateral aid
• Bilateral aid is more targeted
• Crisis responsive
• Adopted to Russian
development assistance
priorities.
• Direct budget support
• Debt-relief. $140 billion since
1996
• Debt-for-development swap
mechanism
4
Russia as a donor in multilateral
development banks/funds
Bank
Share of Russia
• Eurasian Development Bank
66,67 %
• International Investment Bank
55,60%
• International Bank for Economic Cooperation
• Interstate Bank of Commonwealth of
Independent States
• New Development Bank
51,59%
• Black Sea Trade and Development Bank
16,50%
• Asian Infrastructure Investment Bank
5,92%
• European Bank for Reconstruction and
Development (donor since 2013)
• International Bank for Reconstruction and
Development
• International Development Association
4,05%
50,00%
20,00%
2,28 %
0,31%
Multilateral development banks
• Eurasian development bank is an important source of
investments for development in post-soviet area
• Sub-regional development banks are characterized by
low capitalization, weak performance, lack of rating
(Interstate bank of Commonwealth of Independent
States, International Bank for Economic Cooperation)
• Russian-Kyrgyz development fund (RKDF) creation
• Eurasian Fund for Stabilization and Development
(former EurAsEC Anti-Crisis Fund)
• Proposal to create Bank of Shanghai organisation
cooperation
NDB and AIIB
 Geographical expansion of Russian development finance to Asia, Latin America and Africa
 New instrument of development finance
 Participation of Russian business
New Development Bank
• Effectiveness of NDB would depend
on management and transparency policy
• Rating downgrade of Brazil and
Russia will influence the rating of the
bank
• Development finance network
• Priorities of Russian cooperation
within BRICS are mining, machinery,
manufacturing industries, energy and
innovative technologies sector
Asian Infrastructure Investment Bank
• Sound institution
• Broad membership
• AAA rating
• Good possibilities to attract
capital on international markets
• Ambitious plans of
infrastructure development
7
Regional distribution of development
finance in 2014, $billion
•CIS – 19
Remittances,
68,9
• CEA – 0,36
• Latin America 0,26
• SSA – 0,07
•South and South East
Asia - 0,11
Outward FDI,
22,6
ODA, 0,88
• CIS – 0,5
2014
Debt relief,
32,6
•Cuba – 31,7
•Uzbekistan – 0,87
Other outward
investments,
121,1 (2013)
•CIS – 6,5
• East Asia – 2,8
•Western Europe – 82,7
80
5
70
4.5
60
4
50
3.5
40
3
30
2.5
20
2
10
1.5
0
1
2006
2007
2008
2009
2010
2011
2012
2013
2014
% of GDP
$billion
Remittances from Russia
($billion, % of GDP)
Discussion on the possible role of
private capital
• Private FDI - a financial source to achieve SDG
• Dilemma: 1) strong demand for long-term FDI in
developing countries 2) the lack of high-quality
investment projects
• Global crisis reduced capital offer
• Empirical research shows (Galindo et al. 2003) that
financial capital is more likely to expand to countries
with the same level of institutional development.
• But…. Capital from developing countries also looks for
riskless assets
• Private investors are ready to invest in developing
countries if they receive sovereign guarantee.
Thank you for your attention!
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