Ideas and Ideals

The authors have attempted to promote the conceptual views of Wang Yongli, a Chinese academic economist with extensive and authoritative practical experience, to the Russian audience of experts in the international monetary and financial sphere. The theoretical summary of the successful practice of China’s financial industry and the justification of the importance of urgent reform of the international monetary and financial system, presented in Wang Yongli’s book “China’s Choice in the Global Financial Turbulence” became the basis for this article. An informative translation of the book’s fragments dedicated to the reforms of the international monetary system highlights two areas, i.e. social positioning of monetary finance and reform of the international monetary system. The article analyzes the main issues identified as a result of China’s rapid financial development and determines possible ways to solve them. The purpose of financial development is to serve the real economy, and promote economic development for creating greater economic and social value through the examination of the relationship between the real economy and the virtual economy, the relationship between currency finance and real economy. The authors introduce a model of interaction of aggregate power and international influence of the country: the international influence of the country’s currency finances and its status in the international monetary and financial system. An appeal to various concepts explaining the global expansion of the US dollar leads to the conclusion that the International Monetary Fund (IMF) needs a deep reconstruction. A detailed analysis of the history of the formation, management and reform of the IMF is given, revealing its inconsistency with global development trends. The article shows the role of China after the 2008 financial crisis and the significance of the yuan in the currency basket. The study represents the author’s position on the transformation of special drawing rights (SDRs) into a super-sovereign world currency. By highlighting the issues Wang Yongli has foreseen many situations and events that are now taking place in the global monetary and financial system.

Attracting household finances to the country’s economy and competent management of personal finances are among the tasks of the state. The issues of rational financial planning and minimizing the risks of loss of personal wealth are acute for private investors. Independent Wealth Management Advisory is an intermediary activity between financial institutions and households. Independent advice to private investors is one of the tools in solving the problems of the state and investors’ issues. As a result of the analysis of the activities of an investment adviser in Russia and abroad, using the example of the United States and Great Britain, it was revealed that experience is adopted from other countries, but in Russia it is not fully implemented. In Russia, the main part of independent advisers is in the ‘gray zone’, their activities are not regulated at the level of law and self-regulatory organizations in the financial sector. Therefore, the author’s approach is to propose to separate the activities of investment advisers, which are enshrined in law and independent financial advisers, who currently operate without any regulation. The regulatory and training function for independent financial advisers should be entrusted to SROs. Firstly, separating the activities of independent financial advisors allows them to provide educational services to a wide range of people and the provision of consulting services in private without providing investment recommendations, but with the definition of the risk profile of the investor. Introduce licensing for various types of activities. Secondly, it is key to determine the principles for charging the services of independent financial advisors. The proposed steps will make the provision of independent household financial advisory services transparent and understandable to regulators, investors and those who operate or plan to choose as a future profession. This will serve to attract private capital to the financial market, reduce the risk of loss of wealth, move the existing advisers out of the ‘gray zone’, and make personal finance advisers an integral part of the financial market infrastructure.

The article considers the short-term, mid-term and long-term economic consequences of the special military operation by the Russian Federation in Ukraine and the impact of Western economic sanctions on the economic development of the Russian Federation from March till June 2022. Despite a short time passed since the beginning of the special operation and the introduction of economic sanctions against Russia, they have already made a serious impact on the Russian economy. There has been a rapid deterioration of many general and sectoral indicators. The slow-down in the investment sector is particularly dangerous in terms of mid-term consequences. The secrecy of much statistical and accounting data, imposed for the first time in the post-Soviet period, can be considered an indirect indicator of the severity of the economic crisis. While assessing the mid-term consequences of the current economic crisis, attention is drawn to the structural weaknesses of the Russian economy that have developed over the past 30 years and to the degradation of material and human capital during this period. The development of the country is compared to the movement of a ship. It is shown that with the current defects, the ship called ‘Russia’ in its current state is not able to withstand the storm caused by the military operation and economic sanctions. The economic, scientific and technical development of the USSR and the Russian Federation over the last 60 years is analyzed in detail. The analysis has shown that during this period almost all most important economic, scientific and technical indicators together with the intellectual potential demonstrated a continuous degradation. Thus, the Russian society and the state are facing the consequences of the mistakes and missed opportunities of the past 60 years. A lot of effort and time are required to overcome the consequences of these mistakes.