The crisis will drive Russia to spend less on its participation in international organizations

Russia's withdrawal fr om G8 and the suspension of Russia's credentials in the Assembly of the Council of Europe (PACE) makes one think about how valuable international organizations are for Russia's economy and policy at present.

Russia's status in political international institutions remains most vulnerable, in which Russia's negotiating capacity has recently been seriously faltered due to the situation in Ukraine.

Russia's nonparticipation in international economic organizations makes this country be exposed to not only financial but also political risks of dishonored commitments. For example, Russia's participation in international financial institutions such as the World Bank and IMF is an extremely delicate issue amid internal economic and external political crises. On the one hand, financial institutions require resources, but on the other hand, it is these very institutions that help the Russian Federation as part of international projects to experience the economies of scale effect.

For instance, implementation of projects of cooperation in international development through trust funds of international economic organizations allows Russia to operate in the states wh ere Russia has no permanent mission or its presence is limited, raise extra funds in order to enhance the efficiency, as well as curtail its costs by using organizations' resources and infrastructure available at the local level. As calculated, Russia contributed a total of $351,81m to such organizations in 2013.

For example, Russia is a partner to the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD). At present, Russia is participating in 18 trust funds managed by the IDA/IBRD on behalf of the Russian government (in seven individual trust funds and 11 multi-donor trust funds). Russia financed a total of more than $248m. This raises a question of the need to spend budget resources abroad in times of crisis. The answer is simple: without having such mechanisms at hand, it would be even more costly and challenging for Russia to be able to protect its geopolitical interests in poorest countries. At present, Russia's budget cannot solve the task of direct bilateral cooperation with countries in different regions of the world. However, Russia's non-presence in a few countries will cost it much more in the future from the prospective of geopolitics.

To compare: Russia spends ten times the foregoing costs on "charity" within the Eurasian zone. For instance, Russia appropriated $7,5bn from its budget on the anti-crisis aid alone to the EurAsEC countries in the crisis-hit 2009, while Russia holds $1bn in the charter capital of the Eurasian Development Bank (EDB).

More expensive are bilateral projects which include direct loans and aid to foreign states such as Afghanistan, Kirgizstan, Tajikistan, Vietnam, Zambia, Guinea, the Republic of Cuba. For example, the volume of Russia's bilateral concession loans and grants exceeded $361m in 2013. This figure doesn't include the "business-related" and humanitarian support which Moscow offers in accordance with developments in various countries worldwide (predominantly to African countries and CIS countries). The cost of responding to commercial opportunities can be very high. For instance, Russia provided a total of $32m of humanitarian aid in 2013 alone.

The cooperation with IMF implies impracticable amount of commitments on Russia. Moscow has ceased to borrow from the IMF after the full repayment as early as 2005. However, the donor status in the organization implies that Russia should participate in the mechanisms of financing stipulated under the agreement with the IMF.

Russia was quite successful in playing a new role when the federal budget ran surplus. In the period between 2005 and 2008, the Russian government transferred $1,2bn to the IMF. Moreover, in 2013, Russia transferred $10bn in compliance with the G20 decision to replenish the IMF resources. It is hard to tell whether it is a lot or not. It should be kept in mind that за during the transition period Russia raised some $15,6bn from the IMF to support its financial system. The key costs was that the loans were conditioned by undertaking the recommended economic and financial reforms.

With high probability, the current crisis helps Russian government to curtail costs of its participation in international economic organizations. Nonetheless, Russia reserves the right to use the mechanisms of international economic organizations for serving its own interests in various regions of the world while taking the opportunity to save money through the economies of scale effect which may occur with the assistance of institutions. This will allow the Russian Federation not to lose the opportunity to influence the countries supported by Russia through international institutions.

Yury Zaitsev, a researcher at the Gaidar Institute for Economic Policy