By the end of 2017, the Russian government emptied the Reserve Fund, and then formally attached it to the National Wealth Fund. However, it was de facto abolished. Thus, there is only one vault left in the country in case of a sudden patching of holes in the budget.
What is the Reserve Fund and why is it needed
Many countries of the world have a reserve fund. In Russia, it was formed on February 1, 2008. Before him, there was a Stabilization Fund in the country. In 2008, it was decided to divide it into the Reserve and the National Welfare Fund. In fact, this is part of the federal budget for a "rainy day", the so-called "safety cushion". The difference between the funds lies in the nature of the funds through which they are replenished, and the area of responsibility. Thus, the Reserve Fund was designed to protect against fluctuations in prices on the hydrocarbon market. It accumulated a certain percentage of income from the sale of the "national treasure" - gas and oil. The government had the right to use this repository only in the event of an economic crisis in order to fulfill its obligations: to continue financing health care, education, and also to pay salaries to state employees.
The National Welfare Fund is being replenished thanks to the voluntary pension savings of Russians. It aims to balance the budget of the Pension Fund. According to forecasts of financiers, it will also run out of money, approximately in 2031.
Why did you run out of money in the Reserve Fund?
The answer is simple - the funds were simply spent. The government began to actively spend the resources of the Reserve Fund in February 2015. There was a huge hole in the national budget then. Thanks to money from the Reserve Fund, its size has decreased six times. If expressed in monetary terms, then by almost 5 trillion rubles. The fund had enough money for exactly three years. On February 1, 2018, it sank into oblivion due to its complete depletion.
Funds from the National Wealth Fund began to "pull" a little later, in September of the same year. They covered the budget deficit of the Pension Fund. About 160 billion rubles were spent per month, and by the end of 2015, 490 billion rubles had been spent from the fund.
Such an active waste of "money-boxes", of course, could and should have been stopped. For this, it was only necessary to increase the revenue side of the budget.
Why it was decided to abandon the Reserve Fund
The Ministry of Finance of Russia considered it inappropriate to maintain two funds with different management. Since February 1, 2018, the budget and Pension Fund deficits are covered by only one storage facility. At that time, its size was 3, 7 trillion rubles.
The joint fund is replenished with the currency that the Ministry of Finance purchases from the exchange, using only budgetary revenues from oil prices above $ 40 per barrel. If the "black gold" is worth less, the government needs to take money from somewhere else and plug the hole in the budget. For most of 2018, oil was cheaper than $ 40, and the Ministry of Finance had to gobble up the country's gold and foreign exchange reserves.
