The written off debts of Russia: how many are written off to other countries and why

The international credit political structure is organized in such a way that almost every state borrows from some and replenishes with financial resources the budget of other countries that are in the field of mutual interests. At the same time, repaying the debt to the creditor with real money is quite problematic. Large states often forgive debt obligations to countries that are unable to repay the loan and accrued interest on time. However, in world practice, the "non-writing" of debts, even very old ones, is common. The Russian Federation is not an exception.

Monetary debt is not always tangible

Most of the written off debts to other states are debts in the literal sense of the word. Since the financial resources allegedly given in debt, could never even go beyond the country that gives credit, and sometimes even this money did not exist materially. This is explained in the following way: financial credit assistance is mainly given for construction, equipment, food resources that needed to be bought from the creditor country, or to build energy production and infrastructure development that the creditor country's firms had to do. So it turns out that at the expense of others, the creditor country simply increased its GDP.

Why lend to countries that can not pay off?

In most cases, the Russian Federation issued monetary assistance to other states for the purchase of weapons, food resources, or for the construction of various industrial, infrastructure complexes or agricultural facilities on the territory of the states receiving funding. But why does Russia write off debts to other countries? Armament was produced in our country, food resources too, and our masters were also engaged in the creation of industrial, infrastructure complexes or agricultural facilities with the delivery of domestic equipment to these complexes.

The nuclear station as an example of lending

An example can serve several nuclear power plants, which were built on the territory of different countries by Russian specialists. These states took money loans from the Russian Federation for the construction of nuclear power plants, but at the same time the experts of our country were engaged in supplying construction materials and erecting the station, and the enterprise was supplied with domestic equipment. Why does Russia write off debts? After the construction and equipping of the complex, the Russian Federation also received a permanent buyer of domestic fuel. This means that the financial resources of the creditor country did not leave. With arms and food purchases, things are exactly the same.

Non-debt loans for armament

Many countries are in arrears to the Russian Federation precisely for loans received for the acquisition of weapons. Naturally, the money that was allocated for the purchase of weapons for defensive or military purposes, the recipient states did not see the loan. They were sent to the enterprises of the manufacturers of military weapons, which are located on the territory of Russia. The benefit is that: industrial enterprises are functioning, orders for the manufacture and modification of weapons are constantly coming, purchase of consumables in the future.

Russia is still fulfilling orders for the modification of military weapons, which was sold to other countries by the Soviet Union in the post-war years.

Loan scheme for food procurement

Approximately also matters are with loans for the purchase of food resources. Several countries of the African continent occupy a leading position in debt to the Russian Federation in the purchase of food raw materials. The states take money to buy wheat, but they do not finance these countries, as raw materials are grown and bought in Russia or sold from the state reserve of the country. The benefit for Russia is this: there is constant support of own agricultural producers, there is always a demand for goods, and jobs are provided to farmers.

Reflecting non-repayable loans on the domestic life of the country

In fact, all credit benefits are calculated as state aid to their industrial establishments, starting with agricultural producers, ending with enterprises of power and military complexes. This gives additional demand for the production of goods and stimulates the development of the industry. Many believe that it is better to send these huge amounts of money directly to the domestic economy, but they can not understand that these actions really help the enterprises of the domestic market to develop.

Why and why does Russia write off debts to other countries

The debt is written off by mutual agreement of creditor states, debtor states and third countries participating in this process. In this case, each participant has a certain benefit, which can cost significantly more than the total amount of a fully paid loan. Russia is writing off debts for several reasons.

It is almost impossible to completely get rid of debt obligations. For example, the Russian Federation is the assignee of the USSR, and the Union has other debtor states, for which it is beneficial to consider that if the Soviet Union as such is no longer there, then there are no debts on loans either. Also, the debtor country can be affected by changes in the state system, be it the change of power in the revolution, the division into several states, etc.

In this case, the debt can be replaced by a different kind of advantages for the issuing country:

• Profitable construction contracts;
• Extraction of useful natural resources;
• Conclusion of beneficial economic agreements for which financial resources will be spent;
• Contracts for the supply of high-quality Russian weapons both for combat operations and for defensive purposes.

On such procedures, the creditor country can still make good money, and the debtor country provides its state with a permanent market.

They are also inclined to write off debt financial obligations from the states in the zone of interest of the Russian Federation, consolidate bargains beneficial to the two sides, establish political influence on a certain region with the help of constant funding of states. Financial assistance can be given to underdeveloped states in exchange for supporting the political influence of the Russian Federation.

Debts on loans are written off to maintain a stable creditworthiness of Russia on the world stage. Some countries issue loans with a lower interest rate, while other states are forgiven financial debts. It is beneficial to the states, but this can not be touched by the inhabitants of the country.

In normal practice, financial debt is not transferred to other countries, but remains with creditors. This is due to the fact that for poorly developed in the political sense of the debt states, it is difficult to find a country that can pay the debt for it without harming itself. Therefore, to write off at least part of the debt, exchange it for possible beneficial cooperation - a more lucrative option.

Written off debts of Russia to other countries

Over the past twenty years, Russia has written off debts to other countries worth about $ 140 billion. This is if you consider only those loans that exceed $ 1 billion. So, further on what debts Russia wrote off. What countries have received, in fact, gratuitous assistance? And how much did Russia write off the debts?

In 1992, Russia's written-off debt to Nicaragua for the USSR was $ 2.55 billion. The total amount of debt is 3.4 billion, i.е. About 90% of the debt was written off. In 2004, the government fully repaid the debt.

1996. The total debt of Angola to Russia is $ 5 billion. The debt was written off by returning in 2016 a loan in the form of promissory notes worth 3.5 billion.

year 2000. Vietnam's total debt is just over eleven billion. The part is written off for the sum of nine and a half billion. Payment of the remainder is postponed for 2016-2022.

year 2001. Of the $ 6 billion. Ethiopia has forgiven 4.8 billion. In 2005, the country's debt was fully repaid.

2003 year. Mongolia wrote off 11.1 billion from 11.4 billion dollars. The remaining amount of three hundred million country paid immediately after the write-off of the rest of the debt. Thus, the debt was repaid in full.

The same year. Laos. Of the 1.3 billion dollars. Written off 960 million.

2004 year. The debts written off to Iraq amounted to 9.6 billion out of 10.5. The head of state hopes that in the interests of Russian companies there will be cooperation with the country.

2005 Syria's debt to the Russian Federation amounted to thirteen and a half billion dollars. It was written off almost ten billion. The country's leadership assumed the responsibility to purchase weapons from Russia and to carry out the modification of armored vehicles.

2006 Algeria is forgiven for almost five billion dollars.

In 2007, slightly more than eleven billion were written off from Afghanistan's debt.

2008 Iran is almost twelve billion out of almost thirteen billion.

In 2008, Libya has forgiven four and a half billion.

In 2010, Mongolia forgave one hundred eighteen million US dollars.

In 2012, with the DPRK 11 billion dollars. Written off. The balance of the debt of more than one billion will be used in education, health and energy in the implementation of joint projects in the DPRK.

In 2013, Russia wrote off Kyrgyzstan's debt by half a billion. 188.9 million have been forgiven at once, the second part of the debt of three hundred million dollars will be written off in equal parts during the next decade.

Why did Russia write off the debt of Kyrgyzstan

In 2013, a law came into force in Russia, which approved an agreement on writing off the credit debt of Kyrgyzstan, according to which the country was forgiven of debts in the amount of 188.9 million dollars. But this is not the full amount of debt.

Kyrgyzstan owed the Russian Federation another $ 300 million. This debt was decided to be written off in installments, namely, $ 30 million. in a year. At the same time, Kyrgyzstan accrued interest on financial debt, but in March 2016 interest accrual ceased. At the moment of 300 million dollars. Debt forgiven 60 million In April 2017, the authorities regulating debt relations, announced the beginning of negotiations to write off the remaining amount of debt, instead of the annual. The protocol established that after its signing by the parties the country will absolutely nothing to Russia.

Russia has written off the debt from Kyrgyzstan, explaining this by the fact that in this way it will provide assistance in the development of the republic.

Russia's debts for 2017 before other countries

To date, Russia's foreign debt to other countries is a debt to them, only remaining from the USSR. Because of the lack of freely convertible currency, which could be paid for the goods and services provided by other countries, it was necessary to borrow from other countries.

The state foreign debt of Russia

The external debt of the Russian Federation is calculated in a dollar equivalent. He grew up in times of crisis, when the country could not pay off acting debts, took out new loans, and old ones charged interest. Over the previous year, Russia's debt to creditor countries rose by 15.4% to almost six hundred and twenty-four billion dollars. Russia has the greatest debt to the US and the EU. It amounted to 125.3 billion dollars.

Plans for the repayment of external public debt for 2017

For 2017, Russia must pay a smaller amount than already paid before. This can be explained as follows:

• Russia in 2017 was able to save a positive difference between the magnitude and price policy of exports and imports, and for the first half of 2016 this difference was 74.7 billion dollars.
• The state will finance the export of goods through debt repayment.
• There will be a change in commercial debts for bonded loans.

Finally

The written off debts of Russia make up a large sum in dollar equivalent. Experience in Russia's relationship with its major financial debtors in the post-Soviet period shows that not every country in which large amounts of money are invested justifies the trust and usefulness of cooperation. But at the same time, there are a number of other events held in debtor countries with a view to the financial settlement of the state.