Out of the shadows
text: Ilya Polevoy , exclusively for Gazeta.kz
In Russia in the nearest future a war will be declared to "black" and "grey" treasuries, through which the salaries are being paid in cash.
The authority structures analyse the economic figures stubbornly witnessing that along with the legal business the black one is being successfully developed as well with horror.
For us this issues take on an especial acuteness too: lately, the illegal economy becomes a serious and dangerous competitor for all those who work honestly.
The difference between official and real wages is perceived not only in Russia, but in our parts as well. There's no way that a manager of a big firm or a bank employee would be paid only 15-20 thousand tenge!
It seems that our neighbours have found a good way to make employers pay salaries through a usual treasury - for this they introduced a 13 per cent rate for the income tax. But it didn't work! There have not become more people wishing to share with the State. People don't like to pay taxes - even if they are low.
That's exactly why in the sole Leningrad oblast taken separately (they failed to change the situation on the federal level, despite many attempts) they decided "to develop measures of economic pressure on employers". In particular, if a salary below the cost of living is paid, then the employers will lose all benefits, provided by the regional legislation. The legislative assembly of leningrad oblast is ready to submit propositions on amendments to the Tax Code to the State Duma of RF. As per the proposed amendments, the citizens costs must not exceed the incomes. Otherwise taxes on an increased rate will be taken off the difference, as it is practiced in many countries. The point is that in Leningrad oblast with a 5 thousand roubles salary citizens buy commodities and use services for the amount of 8-10 thousand roubles per month, which, naturally, confirms the existence of "grey" treasuries.
As for us, nobody invented any means to fight against "black" salaries. It is considered that the best way - is a tax or financial police inspection. But even these only sometimes manage to find something. But the problem is there and it's not been invented - once even the president mentioned it. He made it clear that it was a double-edged weapon: on the one hand, concealment of real wages today does not allow to realise social programs and tomorrow the non-payers themselves will receive minimum salaries, because the "grey" treasuries" bring payments to the pension funds to a minimum. Therefore, the president urged all employers to start paying "white" wages at last.
It's difficult to say how this appeal was perceived "on the jobs" - there is no concrete informatin on that. But statistics that periodically studies the issue gives out distressing information: in 2001 more than 70 per cent of the population of the Republic concealed their incomes or parts of them. That's why the total income of the population was lower by 1.5 times than the officially registered one.
The notion of "illegal economy" includes not only citizens incomes that are not accounted for, but, actually, the clandestine economy itself (the volume of production and services, concealed from the State), and unofficial economy (the volume of house production that is unregistered). Moreover, the statistic bodies do not take into consideration the illegal business - illegal production and sales of alcoholic beverages, illegal drug traffic, prostitution. Those are, so to say, the headaches of the ministry of the interior and KNB.
In Russia itself the informal shadow sector embraces more than 10 million people, or approximately 15 per cent of the total number of working population. Our picture is a lot worse. If one considers that agriculture and partially trade are virtually not registered officially at all and a big part of the country population work in it - almost its quarter.
Economists assert that almost the whole "grey" economics - is nothing else but the small business. The State shows big care in developing small business - in developing countries this sector yields up to 50 per cent of GNP, as for us - it's sheer tears. And the whole point is that the barriers, constructed by bureaucrats, are very often unsurmountable for small businessmen - it is tedious paperwork, and system of permissions, and open extortion.
In 1999 the volume of shadow or invisible economics was not less than 30 per cent from the size of Gross National Product of the country, that is, more than 600 billion tenge. Moreover, 12 per cent - is the concealed volume of production and 18 per cent - volumes of production and rendered services in private households.
But these results cannot be called disastrous. Lately, on the contrary, an abrupt reduction of shadow sector is observed. One might remember the beginning of the 90-s marked by an abrupt rise of shadow economics. Then it was reaching 50 per cent of GNP. Analysts called an excessive regulation of business activities the main reasons of that rise, as well as complexity and "overtaxing" system. In these conditions a part of businessmen did not see any other exit: it could survive only in shadow.
Analysts assert that it is not difficult to trace the share of the shadow market. For this the industrial production figures must be compared with consumption of electricity and usage of freight transportation.
Before 1996 Kazakhstani economy was wallowing hopelessly on its side. Electric energy production was falling: there was not enough of floating assets, bills payable were rising, the equipment has become obsolete. Also the transportation of cargo by all transport means was decreasing - only the airlines were overfulfilling their plan (shuttle business was developing rapidly).
In 1996 the first hints towards economic success emerged. Not mush, just by 0.1 per cent, but still there was a growth of production. But the illegal business was developing faster than the legal one. It is exactly that period that is responsible for the primitive accumulation of capitals that were subsequently legalised in 2001.
Yet before 1998 there was a significant disbalance between three items: the production growth was much slower, than the consumption of electricity and turnover of goods. A significant part of the market was in shadow. But gradually the situation started to get rectified. If in 1999 the olume of shadow economy was making one third of the GNP with a tendency towards its reduction, in Russia that went through a very hard crisis in 1998, the shadow sector of the market today is at 37 per cent of the GNP.
It conceals a certain danger in itself: the State does not receives large amounts of money because it is lmited in its economic and social opportunities. But, on the other hand, the economists maintain that the recovery of legal economy almost doesn't influence the shadow economy at all. "The shadow" is not an obstacle for the development and sometimes, on the contrary, stipulates the growth of official economy. This is a paradox, but still it's true. The shadow economy, gaining strength, in due time comes out of the shadows and becomes legal.
The question is: how long shall we wait for it?
Also in the "In Depth"
09.01.2013 2012 marked by multiple events in Kazakhstan