Assessment of government debt security of emerging markets: theory and practice

Viktoriia Koilo,Tatiana Kubakh,Jaroslav Halik,Lyudmila Ryabushka

doi:10.21511/imfi.17(1).2020.04

Viktoriia Koilo, Tatiana Kubakh + Show 2 more

Open Access

https://doi.org/10.21511/imfi.17(1).2020.04

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Abstract

This study came to inspect a new approach to the government debt security assessment based on the systematization of indicators in terms of four directions: solvency, liquidity, domestic indebtedness, and external indebtedness. The proposed methodology considers the weaknesses, which negatively affect the level of government debt security. It was established that in 2014−2016 the level of security at emerging markets was the worst. The main reason was insufficient solvency. Also, the obtained results showed that the general assessment of domestic indebtedness in recent years had a more dangerous level than the external one. In addition, it was revealed that similar problems with the level of debt burden are also presented in the EU countries since the value of the analyzed indicator – general government debt to GDP – exceeds 60%. It is recommended to consider the experience of debt management reform of new members of the EU and, at the same time, post-socialist countries by other emerging economies.

Highlights

In contemporary conditions of uncertainty, public debt is constantly burdened with risk, which indicates the existence of a real threat to government debt security
It should be notaccording to the approaches for calculating the lev- ed that the value of the indicator increased from el of economic security, approved by the Ministry 0.9% to 2.83% over the period, i.e., it increased of Economy (2007) and the Ministry of Economic almost three times
There is still no single approach to the mechanism of the assessment of debt security among scientists; discussions are ongoing on the methodology and list of indicators for debt security’s calculation and their thresholds

Summary

INTRODUCTION

In contemporary conditions of uncertainty, public debt is constantly burdened with risk, which indicates the existence of a real threat to government debt security. It should be noted that despite the many negative aspects and the consequences of using the state borrowings, they remain the most effective and popular way of financing the budget deficit. This statement provides real grounds for considering such a problem as “government debt security” and, as a result, economic security and macroeconomic situation of the country in general. There is no single approach to the analysis and assessment of debt security globally, each country uses a certain set of indicators, but their limits are not clearly defined by law, and they vary due to the different economic situation. The above-presented emphasizes the necessity of providing the new methodological bases of estimating the government debt security of the emerging markets within the integrated environment

LITERATURE REVIEW

N n 1 ri N N 1

AND DISCUSSION

Integrated index of Ukraine’s debt security

CONCLUSION