There are many realistic options for fulfilling these obligations
The other day, the State Duma once again suspended the operation of a number of articles of the Law “On the basic cost of the necessary social package.” Behind these not very clear words lies a specific deceit. Namely: the Federal Law of 1995 “On the restoration and protection of savings of citizens of the Russian Federation,” which provides for compensation to citizens for lost Soviet deposits, is still not fully in force. Let's talk about whether it is realistic to return these savings and what needs to be done to achieve this.
As many of us remember, almost every Soviet citizen had a savings book: an account in the USSR Savings Bank, as well as bonds and other securities.
After the collapse of the USSR, Soviet deposits first “stuck” in Sberbank accounts, and later depreciated tens of thousands of times. To be fair, it should be added that by the time the country collapsed, the deposits of Soviet citizens were actually withdrawn from Sberbank by the late Soviet governments and used to finance the current needs of the state. But people earned these savings through honest work, and, as they say, no one canceled their obligations.
In total, at prices at the end of 1991, the “frozen” deposits of Soviet citizens amounted to 345.54 billion rubles, which, in general, corresponds to an amount of more than half a trillion US dollars. For comparison: in mid-2023, there were about 40 trillion rubles in the accounts of Russian citizens in all possible currencies, and the M2 aggregator (all cash and non-cash funds) at that time amounted to about 85 trillion rubles, which, translated into dollars, in principle , comparable to the money remaining in the accounts of Sberbank of the USSR and in other forms of government obligations to people.
In 1995, the Federal Law “On the restoration and protection of savings of citizens of the Russian Federation” was adopted, which at the federal level determined that that lost deposits are current liabilities of the state.
In 1996, the Federal Law “On the procedure for establishing the debt value of a unit of nominal value of a target debt obligation of the Russian Federation” was adopted, according to which the state’s obligations to citizens to repay those same debts should be calculated based on the cost of the necessary social set, based on real prices for goods at this moment. This instrument is used to ensure that citizens' deposits correspond to their real value and are protected from inflation.
Unfortunately, to this day, federal laws providing for the transfer of Soviet deposits into targeted debt obligations of the Russian Federation, as well as the procedure for their implementation, have not been adopted. But this aspect, in fact, does not change anything.
As of the beginning of 2024, this state debt to its people will amount to 61.8 trillion rubles. This amount is a conversion of 1991 obligations into modern rubles, taking into account the cost of the necessary social package, as I mentioned above. Almost 62 trillion rubles is, of course, a gigantic amount, practically equal to two of our federal budgets. And such a load is definitely excessive for modern budget processes.
Under these conditions, the Russian Ministry of Finance and the ruling parliamentary majority recognize these debts, but are not yet going to do anything about paying them to our citizens. Based on this, since 2002, decisions have been made annually to suspend the provisions of the law on the fulfillment of these obligations. This year is no exception: the majority in the State Duma (with the exception of the left-patriotic opposition) has again pushed back real compensation for people for lost deposits in the USSR Sberbank until 2027. By the way, by the end of 2026, the debt will grow to almost 67 trillion rubles.
It is clear that it is impossible to pay off these debts at once, but you will still have to pay – if not to the owners of accounts in the Savings Bank of the USSR, but certainly to their heirs. And something definitely needs to be done about this. There are many possible solutions here. I will indicate only a few of them.
The first and easiest way is to transfer this gigantic amount of debt into budgetary obligations with regular payments for, say, 25 years. In this case, 2.5–3 trillion rubles will have to be paid annually from the federal budget, which, in principle, is no longer an unbearable burden for the budget. You can start with pensioners and the oldest citizens and gradually close obligations to all investors, bondholders and their heirs.
To be fair, it should be noted that the government is inclined to implement this idea, as was recently announced from the rostrum of the State Duma. The disadvantage of this approach is that, of course, the financial and economic bloc of the government will delay the date of payment of debts to depositors as much as possible, and this process may take not even 25 years, but many decades. In any case, we'll see what government financiers offer. Although there are already more interesting and realistic options.
One of them is the conversion of obligations into government bonds with repayment also within tens of years. In fact, the transformation of currently unsupported obligations into real government bonds is a good step towards improving the financial situation of millions of our citizens.
The next approach is to convert debts into digital financial assets (DFAs) with a certain usage limit. Let's say the state issues a package of digital financial instruments for the amount of its debt obligations, which is transferred to citizens. At the same time, DFA can be converted into digital rubles and paid with them, but with certain restrictions. For example, they can only be spent on goods and services on the territory of the Russian Federation, for certain needs (for example, food, medicine and housing and communal services) and with a limit of, say, 50 or 100 thousand per year. A citizen who had 1,000 rubles in his savings book in 1991 will in this case receive an equivalent in DFA in the amount of about 200 thousand rubles, which he will be able to spend over several years.
Another similar option is the issuance of housing certificates on the basis of debt obligations with execution within the same, for example, 25 years. At the same time, financial obligations are transformed into escrow accounts, which allows developers to earn money and citizens to improve their living conditions. Also in this part, the instrument of closed-end mutual investment funds (MIF) that invests in real estate is applicable. In this case, the citizen receives not a housing certificate, but a share in a closed-end mutual fund, and earns not from a specific apartment, but from the property complex in which he has invested and which is managed by a closed-end mutual fund.
Finally, there is the option of targeted emission, which should not be forgotten either. Let me remind you that a targeted emission is the release of funds by the state for the implementation of targeted projects and programs to improve the quality of life of citizens, modernize the economy or develop infrastructure. The targeted emission instrument is described in detail in the KURS program – Concept of strengthening Russian sovereignty. The introduction of the digital ruble as a third (digital) form of money makes it possible not only to easily issue banknotes, but also to make them “colored”. The “color” of money makes it possible to ensure the targeted and targeted nature of their use – without the possibility of abuse, corruption, etc.
If we purposefully issue an amount corresponding to the above-mentioned government debt obligations to citizens, then our economy in 2024 will receive an additional almost 62 trillion digital rubles. Let me remind you that the entire money supply in our country (M2 aggregator) in September 2023 was about 90 trillion rubles. That is, the target emission of 62 trillion will not even double the money supply. Taking into account the digital nature of the issue and the intended purpose of this money, you don’t have to worry about a surge in inflation, since these emission resources simply will not appear on the market at the same time. By the way, it is possible at the technological level to prohibit spending these digital rubles on the purchase of foreign currency, but to stimulate, for example, their investment in domestic industry or infrastructure projects.
There are other options for solving this problem related to ensuring revenue growth to the federal budget: you can stop paying dampers to oil workers; it is possible to restore order in state corporations; it is possible to strengthen the deoffshorization of the economy. But all this needs to be done, and, alas, it is easier for the government to postpone fulfilling its duties.
I repeat once again: the obligations on deposits of Soviet citizens in the Savings Bank of the USSR, as well as on Soviet securities held by the population, are recorded and guaranteed by the Russian state. Many investors, due to objective reasons, have already passed away, and many have reached retirement age. Our common duty is to search and find an option to pay compensation to these people for the labor savings lost in the hard times of the 90s.
We often hear that the state must fulfill its obligations, but the most important obligations are debts to our own by the people. By the way, our state has successfully paid off almost all of its external debt, including Soviet and Tsarist ones. Obligations to service the internal debt are also being properly fulfilled, which, of course, should be welcomed. But in these conditions, I don’t want to believe that the financial and economic bloc of our government respects all obligations, except for obligations to ordinary citizens who have lost their savings…