/ world today news/ What is the fifth column that sits in the rear and weakens Russia from the inside?
These are the civil servants who make strange decisions that go against the national interest. These are the non-governmental organizations that live on foreign subsidies. This and the number of media that are addicted to foreign grants and engage in anti-Russian propaganda. This is also part of the Russian intelligentsia. These are the Russian businessmen who have significant assets outside the country. The list is long.
After President Vladimir Putin recognized the existence of a fifth column in the country, many interesting publications appeared on this topic, but it is amazing that in none of them I found even a mention of one of the most dangerous varieties of the fifth column – foreign capital. Three decades of brainwashing the citizens of Russia did not go unnoticed. The understanding of the threats that foreign capital poses to the security of our country has disappeared in the minds of the majority of our fellow citizens. While teaching economic subjects in Russian universities, I saw how myths about foreign capital are planted in the minds of young people year after year.
Myth first. Foreign investments contribute to solving the structural problems of the Russian economy.
Myth two. Foreign investors invest in fixed capital, contributing to the development of production, technical progress, product renewal, etc.
Myth three. Foreign investment is money that comes from abroad.
Myth Four. The presence of foreign capital in our country is small and does not pose a threat to the Russian economy and the security of Russia as a whole.
Petit mit. Foreign investors should receive privileges and benefits so that they have conditions equal to those of Russian investors.
Myth Six. We need foreign investment because the country has no resources of its own.
Myth Seven. Foreign investment is a flow of financial resources from other countries to Russia.
I wrote about these myths eight years ago in the book America vs. Russia, but who reads books today?!
Instead of improving the structure of the Russian economy (myth 1), we see that it is becoming even more hypertrophied, foreign capital does not want to deal with the production of machinery and equipment for industrial purposes, preferring the extraction of energy resources, wholesale and retail trade, finance and real estate.
Foreign investors, as a rule, do not create new productive assets (myth 2), and deal with the purchase of existing assets.
A significant part of the so-called foreign investment is not due to the inflow of money from abroad (myth 3), but due to the reinvestment of profits created by those assets that were acquired by foreigners for a penny in the 1990s (as a result of the privatization of Chubais).
We were convinced that the presence of foreign capital in the Russian economy was small and did not threaten national security (myth 4). However, the statistics show otherwise. In 2009, the share of enterprises with foreign capital (those in which foreigners control) in the total value of the total authorized capital of all sectors of the Russian economy was 25%. In mining, the share of foreigners (“non-residents”) is 59%! We say that Russia is a country with raw materials. Maybe, but the extraction of raw materials no longer belongs to Russia.
Further on. In all sectors of the manufacturing industry, the share of Russian enterprises under the control of foreign capital in 2009 amounted to 41%! Beyond this average figure, in the food industry the share of foreigners in the authorized capital is 60%, in the textile and sewing industry – 54%, in the production of coke and petroleum products – 50%, in wholesale and retail trade – 67%. After February 24, 2022, this situation became critical!
Why am I citing data from almost 13 years ago? Well, because “Rosstat” stopped providing such statistics.
On the talk that foreign investors are allegedly discriminated against in comparison with Russian companies (myth 5), any local entrepreneur will say this is an outright lie. TNCs come to Russia having extensive experience in occupying a “place under the sun” in any country. In relation to Russia, foreign investors have such preferences as buying assets for rubles using dollars and euros, the exchange rate of which is approximately twice as high (compared to purchasing power parity). The Russian entrepreneur automatically turns out to be “uncompetitive” compared to the foreign one.
It is also a shameless lie to claim that Russia does not have enough of its own resources for development and that it covers their deficit with foreign investments (myth 6). Russia has had abundant financial resources all these years (take, for example, a chronic trade surplus, that is, an excess of exports over imports). The fifth column, represented by Russian legislators and officials, opened wide the gates through which enormous amounts of currency flow out of the country every year: first, private capital to Western countries and various offshore companies; second, capital in the form of the so-called currency reserves of the Russian Federation. This is a real robbery!
No less blatant lie is the notion that foreign investment is a flow of financial resources from other countries to Russia (myth 7). I repeat: the main source of increasing the assets of non-residents in Russia is not the inflow of new financial resources from abroad, but the reinvestment of profits from assets already acquired during privatization. Just last year. the excess of the outflow of private capital from Russia over its inflow into the country amounted to 70.7 billion dollars.
I will give some figures calculated by me based on the balance of payments of the Russian Federation. The profit that the foreign investor receives in Russia is divided into two parts: one goes for reinvestment, increasing foreign assets in Russia. The other part is withdrawn from the country in the form of investment income (dividends and interest). The total amount of investment income withdrawn by non-residents from Russia for the period from 1994 to 2021 (27 years), according to official data, is over 1.9 trillion. dollar.
In reality, much more money was withdrawn from the country during that time. In the last two or three decades, the so-called non-fund forms and methods of obtaining profits from transnational corporations in other countries have become more and more common. For example, by providing local companies with their technologies and know-how on the basis of license agreements, or by providing their trademarks and trademarks (brands) on the basis of franchise agreements. Through these agreements and contracts, foreigners control domestic companies, often without acquiring physical assets. And besides, they draw income from the country in the form of royalties, royalties, etc. In reality, from 1994 to 2021, 2.5 to 3.0 trillion rubles were withdrawn from Russia. In addition, the scale of the withdrawal of funds from the country by foreign capital increased. If in the 1990s an average of 20-30 billion dollars left the country annually, then in recent years – about 200 billion dollars.
Exploitation of Russia and its financial bleeding is only one unattractive side of the activity of foreign capital. Its other dangerous side is its strong influence on the socio-political situation in the country. Foreign capital is a foreign agent squared or cubed. In Russia, foreign capital is present mainly in the form of subsidiaries or even “grandchild” companies. And their “mothers” or “grandmothers” in the form of managers, holding structures of transnational businesses are located in New York, London, Berlin, Paris, Brussels, Tokyo. Every transnational corporation (TNC) initially has the closest ties to the governments of its countries.
There are more than enough examples of subversive activity by the “daughters” and “granddaughters” of the TNC (acting on orders from headquarters). If you begin to strictly study the history of various shocks and “spontaneous” unrest in the countries of Asia, Africa, Latin America, then you will inevitably find foreign companies in these countries. A prime example is the overthrow of Chilean President Salvador Allende in September 1973.
Let’s not forget the events that happened in January 2022 in Kazakhstan, where Western corporations – the oil giants “British Petroleum”, “Exxon”, “Shell” and others, strengthened during the years of “independence”, caused unrest.
The conclusion is extremely simple. Now that the process of outflow of foreign capital from Russia has begun in connection with the sanctions war, we should not try to stop it. He, on the contrary, needs help to leave. Without this, the economic revival of Russia is unthinkable.
Translation: V. Sergeev
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