Overdue Arrears and Non-Monetary Transactions of Russia’s Enterprises
Overdue Arrears and Non-Monetary Transactions of Russia’s Enterprises

Summary/Abstract: This paper surveys several studies focusing on the mechanism of overdue arrears, barter and other non-monetary methods of payment in order to understand the status quo in the Russian economy. A major conclusion of the paper is that it is essential to analyze non-monetary transactions which bring about overdue arrears. Through a general analysis this paper will show that non-monetary transactions occur due to a shortage of liquidity which ignites the “survival” principle of enterprises through previous experiences of quasi-barter during the Soviet era in an early stage of non-monetary transactions. The “survival” principle encourages the utilization of non-monetary transactions and is complimented by the “evasion of taxes” principle. During this developing stage of non-monetary transactions, when financial repression is over, the “evasion of taxes” principle plays an important role in avoiding the heavy burdens of paying taxes. In a more detailed analysis, it is argued that non-monetary transactions of the largest gas company in the world, Gazprom, are one of the most important sources in the chain of non-monetary transactions. In Section 1 the mutual relationship between overdue arrears and nonmonetary transactions are analyzed. Section 2 concentrates on the problems of non-monetary transactions. In Section 3 transactions between enterprises, between enterprises and governments, and between enterprises and households are analyzed. The analysis of the transactions between enterprises and banks is omitted and will be publicized in a subsequent study.

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