External Public Debt Research Articles

Бюджетні дефіцити і державний борг України під впливом шоків пандемії та повномасштабної агресії

Introduction. The extraordinary conditions for the government’s functioning during the pandemic and warfare provoked a strong respose of the state institutions, as a result of which the size of budget deficit in Ukraine over 2022-2023 exceeded a lot the historical values and averages for the different country groups as most indicators of the debt burden worsened, generating the danger of debt unsustainability. Problem Statement. Identification of the nature of Ukraine’s fiscal policy through the lens of past and contemporary global phenomenon, identification of macro-financial factors impacting he state of debt sustainability under the extreme conditions, analysis of debt burden indicators and fiscal risks in order to outline the ways of solving the fiscal and debt problems in Ukraine. Purpose. To reveal the global patterns and national features of the expansive fiscal policy conduct and public debt accumulation in emergency conditions which are connected with the pandemic and military actions , to investigate the factors of Ukrainian government’s solvency deterioration and to assess the relevant risks, as well as to define the tools of public debt management in the medium run. Methods. General scientific and special methods are applied: analysis and synthesis, description and comparison, historical method, method of theoretical generalization and abstract-logical method. Results. It has been found that the impact of operations of the general government on aggregate demand in Ukraine was positive in 2020, 2021 and 2022, and this situation was in sharp contrast to the period of 2015-2019, when fiscal policy produced restrictive effects. Fiscal policy in Ukraine was of pro-cyclical nature in 2014-2018 and turned to countercyclical stance only in 2020 with sustaining this course until 2023. It has been proven that in Ukraine the debt sustainability criteria are violated across major part of debt burden indicators , that signal the high solvency risks and liquidity risks for general government; moreover, relative to 2019, the dynamics of most indicators in 2020 and 2022-2023 were unfavorable. Computations conducted indicate that refinancing risks, foreign exchange and interest rate risks inherent to the structure of public debt have increased significantly with the start of hostilities in Ukraine. Conclusions. In the post-war period, contraction of budget deficit and well-balanced restructuring of the external public debt should become the main levers for debt reduction. Effective management of public debt with consideration of existing risks are important for securing macro-financial stability and active government’s involvement in the post-war reconstruction of the country.

La relation entre la dette extérieure et la croissance économique au Maroc : Investigation empirique

The relationship between the external public debt and the economic growth of countries has always been controversial. The purpose of this article is to analyze empirically the impact of the external public debt and the economic growth of Morocco in the period 1984 to 2021. In order to achieve that, a methodology based on a proposal of an empirical and theoretical literature review that treats this problem has been used on the first hand. On the other hand, an econometric analysis has been utilized to detect if there is a long-term growing relationship between the external debt and the Moroccan economic growth.

ОЦІНКА ФАКТОРІВ ВПЛИВУ ЗОВНІШНЬОГО БОРГУ НА МАКРОЕКОНОМІЧНИЙ РОЗВИТОК КРАЇНИ

The article evaluates the factors influencing the external debt on the macroeconomic development of the country. Management of the external debt of the state involves a certain process of creation and implementation of a number of specific mechanisms of influence on such debt. It was established that the size of the external state debt depends on many factors, including the main economic indicators. It was determined that the external debt is not a static indicator of changes and can change its size under the influence of many factors: changes in taxation, changes in regulatory policy, changes in the foreign economic situation (for example, changes in the volume of external demand for export goods), changes in the economic situation, etc. When identifying cause-and-effect relationships between macroeconomic indicators, we will consider the ratio of the debt of the general public administration sector to GDP as a key indicator characterizing external public debt. The following indicators were used to find relationships: debt service to the total amount of state budget expenditures; consumer price index; index of the real effective exchange rate of the hryvnia to the US dollar; volume of direct foreign investment; volume of imports; index of political stability. Based on the results of modeling, we obtained the values of the investigated indicators, including their forecasts for the next 5 periods, as well as the range of deviations of the forecasted values. A cause-and-effect relationship between the ratio of the debt of the general public administration sector to the GDP of Ukraine and the selected group of macroeconomic indicators was revealed. Practical verification of the built model in the conditions of hostilities is impossible, which is caused by the catastrophic drop in GDP and the rapid increase in foreign aid of Ukraine's allies.

Public external debt and economic growth in Tunisia

The relationship between public external debt and the economic growth of a country is still a subject of significant interest and controversy for researchers. This article focuses on the issue of the effect of the management of the external debt of developing countries on macroeconomic aggregates. The objective is to conduct an in-depth study of the issue of foreign debt carried out by Tunisia and to know its effects on the economy, notably economic growth in long-term. Using a simple methodological approach, VAR techniques were used to reach the aim of the study over the period 2000-2019.

ЎЗБЕКИСТОН РЕСПУБЛИКАСИДА ДАВЛАТ БЮДЖЕТИ ТАҚЧИЛЛИГИНИ МОЛИЯЛАШТИРИШНИНГЗАМОНАВИЙ ҲОЛАТИНИНГ ХУСУСИЯТЛАРИ

This article reveals the essence of the state budget deficit and its methods of its financing and the stages of development are being considered. In Uzbekistan, since the acquisition of independence and to the present day there is a problem of state budget deficit. In our country at present, to finance the state budget deficit, mainly the public external debt is used. In this direction domestic opportunities are little used. This article, using the method of comparative analysis was given the author’s (assessment) evolution of the current state of reducing the state budget deficit of country.

THE MAIN FACTORS SHAPING THE STATE'S DEBT POLICY AND DEBT STRATEGY IN THE REPUBLIC OF AZERBAIJAN

Public debt is the total amount covering the budget deficit in a certain period of time. The correct management of the debt structure means the set of operations carried out until the time when the debt is zeroed by issuing the debt and paying off the principal debt and interest thereafter. In this regard, in each state, a special institution responsible for the mentioned issues is involved. The purpose of debt strategy management is to ensure the achievement of the main economic and social goals by making certain adjustments or various additions to the amount, composition and repayment period of debts. From this point of view, debt management is closely related to both fiscal (budget-tax) and monetary policy of the state. Adjustments in the amount of debt, i.e. reducing or increasing the amount of the debt, regulating the debt in terms of duration is one of the important issues of debt management. It should be noted that these operations include adjustments to the amount and composition of the debt and a number of debt policy instruments that will ensure the achievement of certain economic goals. In addition, another goal of managing debt strategies is to use the resources obtained through borrowing in the most beneficial way for the stability and development of the national economy and to get rid of the debt burden at the lowest cost. This issue is one of the most important and most successful elements in the debt strategy. Public debt is the total value covering the budget deficit in a certain period of time. In addition, another goal of managing debt strategies is to use the resources obtained through borrowing in the most beneficial way for the stability and development of the national economy and to get rid of the debt burden at the lowest cost. This issue is one of the most important and most successful elements in the debt strategy. The most important factors that require attention in the debt strategy are: - Selection of the minimum debt burden for the State; - Sale of bonds and bills of any amount or as needed; - Adjustment of the borrowing amount and conditions to economic requirements; - Debt reduction as appropriate opportunities arise. Also, the main principle of strategic debt management is that the amount and structure of the public debt should be in accordance with the requirements of the economic situation and the main goals. At the same time, it should be taken into account that it is natural for the state to try to reduce its debt burden when appropriate opportunities arise. However, the policy of alleviating the debt burden begins first of all with the logical and correct selection of the borrowing time and other necessary measures. For example, during recessions when interest rates are low, it is more appropriate for the government to borrow. Because in general, the interest burden of the debt attracted by the state will be less. On the other hand, if there is a high interest payment obligation in the current period and if interest rates are likely to decrease in the future, it is useful to wait for the market interest to decrease through short-term borrowings. In the research paper “The main factors shaping the state's debt policy and debt strategy in the Republic of Azerbaijan” was talked about the debt policy, which is of special importance for any state and plays an indispensable role in its financial system. Nowadays, due to the fact that it plays an important role in the economic development of the country and the regulation of debt problems, the correct processing of the public debt has been reflected. Otherwise, an improperly prepared debt policy that does not take into account modern realities can lead to negative consequences and lead to unpleasant situations. From this point of view, the correct implementation of the policy related to the topic we are studying has been evaluated as one of the most relevant issues. In the article, the goals put forward in the strategy for public debt in the country are described. Based on the debt policy carried out in our country, it was brought to attention that the state has a wide and positive experience, both in terms of benefiting from the debt system and in terms of paying off the public debt. Recently, the dynamics of internal, general and external public debt have been given and statistical indicators have been shown, emphasizing the great importance of replacing foreign debt with domestic debt as much as possible. At the end of the article, it was mentioned that the main goal of the debt strategy is the gradual reduction of the public debt. Keywords: debt strategy, financial system, debt system, economic development, debt dynamics.

External public debt of the Russian Federation: risk assessment and improvement of the management system

This scientific article deals with issues related to risks arising from external public debt. The authors of the article note that the state's own resources and funds do not always allow satisfying the country's unlimited needs, so borrowing from abroad becomes necessary. One of the reasons why states are forced to resort to external borrowing is the problems associated with financing budget expenditures. In today's realities, it is very important to rationally approach the issue of managing external debt, because its cancellation can seriously affect the future stability and ensure the country's national economic security. The growth of the external debt of the state, according to the authors, can lead to an increase in tax rates, diversion of funds, economic recession, inequality between people, as well as the transfer of debt to subsequent generations. Consequently, the external debt management policy is designed to enable the state to attract funds from other sources, solve social problems and ensure economic security. According to the authors, external debt is an essential link in the macroeconomic system of any country, because it affects public finances, the investment climate, money circulation and international cooperation. Those relationships that develop during the formation and repayment of debt can significantly affect the long-term economic potential of the country. In this regard, the authors note that it is necessary to conduct a comprehensive policy of the state in relation to external debt and balance its income and expenses so that there is no need for borrowing from abroad, and so that a situation does not arise in which external debt becomes the most serious obstacle to difficult path of economic transformation.

From Debt to Green Growth: A Policy Proposal

Concurrent and overlapping crises, such as the COVID-19 pandemic and increases in energy and food costs, are particularly affecting developing and poor countries, in addition to the continuous and growing negative impacts from climate change. In this paper, we develop a policy proposal and show through a model how an implicit debt servicing standstill for a country with large external debt can be combined with a policy for promoting power generation from renewable energy sources, with positive effects for economic growth and for ensuring debt sustainability. Through a typical decentralized competitive general equilibrium endogenous growth model, we show the long term effects of partially redirecting debt payments to green energy infrastructure to facilitate economic growth and achieve a sustained debt-to-output level. The results indicate that a higher percentage of external public debt increases public capital accumulation, resulting in a higher long-run growth rate, albeit with a slower transition to a steady state. Equivalent results are found regarding the level of financial aid provided for public productive capital.

A Comparative Analysis of External Debt in the East African Community Countries

Borrowing to finance public infrastructure has pushed debt levels to record highs within the East African Community (EAC) countries. Total external debt stock grew by 333.38 percent between 1970 and 2020. The rise in external debt exceeded growth in GDP and exports in all the countries except for the Democratic Republic of Congo between 2010 and 2020. The situation could have been worse had it not been for a massive external debt cancellation by the international community under the Heavily Indebted Poor Countries (HIPC) and Multilateral Debt Relief Initiative (MDRI) programmes that benefitted all the EAC countries except Kenya. Virtually all the countries are increasingly borrowing more long-term than short-term external loans. Multilateral and official bilateral creditors continue to be the major financiers in all the countries even though these countries are gradually diversifying their sources of borrowing. All the EAC countries except Burundi had publicly guaranteed private sector external debt from commercial banks between 2010 and 2020. Three of the countries, Kenya, Tanzania and Rwanda, had nonguaranteed private sector external debt during the period. Two countries, Kenya and Rwanda, have joined a fast growing number of African countries that are issuing international sovereign bonds. The EAC countries are in a vulnerable position, with public external debt already at elevated levels. Trends in some of the external debt ratios including debt-to GDP, debt-to-exports, and debt service-to-exports ratios suggest that these countries could face challenges in servicing their external debts and meeting other foreign exchange obligations. High levels of external debt seem to have led to a vicious cycle of debt. Even after benefitting from the HIPC and MDRI debt relief programmes, the countries are once again facing high debt ratios. In light of the above findings, governments of the EAC countries should: look for improved terms on new loans; restructure external commercial loans that have heavy maturities and high interest rates; continue to diversify sources of external financing to reduce high dependency on expensive loans; make concerted efforts to increase concessional public external debt; explore non-debt creating financing options for public investments such as Public Private Partnerships; and look into refinancing expensive debt with debt on more favourable terms. Keywords : External debt, multilateral and bilateral debt, publicly guaranteed debt, external debt indicators, vicious cycle of debt DOI: 10.7176/JESD/14-4-01 Publication date: February 28 th 2023

Does Public Debt and Investments Create Crowding-out Effect in Turkey? Evidence from ARDL Approach

The impact of public sector debt composition on the private sector is a matter of curiosity. This article explores the crowding-out effect of public debt and public investment on private investment in Turkey from 1975 to 2020, utilising the ARDL method. The findings reveal that public investment, public domestic debt stock, and external debt service create a crowding-out effect; on the other hand, the public external debt stock has a crowding-in effect on private sector investments. In this study, the crowding-out effect of public debt, which has not been directly related to private sector investments in the literature, is tried to be examined.

ЗОВНІШНІЙ ДЕРЖАВНИЙ БОРГ УКРАЇНИ В УМОВАХ ВІЙНИ

The article is devoted to the assessment and analysis of the dynamics of external public debt and key indicators of external debt security of Ukraine for 2009 – July 2023. During the war, Ukraine is at a critical juncture where it must balance the imperative of post-conflict reconstruction with the need to manage external debt to ensure economic sustainability. The multifaceted nature of this challenge requires an integrated approach that encompasses policy coordination, diplomatic engagement, and in-depth economic analysis. The key emphasis in this study is on the analysis of the external public debt of Ukraine, in the context of the challenges caused by the war, highlighting the relationship between economic strategies and the needs of post-war reconstruction. The analysis of key indicators of external debt security proved a critical level of external debt burden. Based on the constructed Laffer curve, the threshold value of the ratio of external public debt to GDP is determined. The article is devoted to the study of theoretical and practical aspects of the assessment and analysis of external public debt and key indicators of Ukraine's external debt security, for the development of an effective external public debt management system and the transformation of public borrowing into a tool for post-war and post-war recovery of the country. The following scientific methods were used to achieve the goals of the scientific research: analysis and generalization – to study the current state of external debt security in Ukraine; comparison and compilation - for the analysis of the system of external debt security indicators; statistical analysis – to study the dynamics of debt security indicators and calculate an integral index based on them. Based on the analyzed dynamics of the external public debt, a conclusion was made about the "critical" debt load with peak values in 2014 (military conflict in certain territories of Donetsk and Luhansk regions), in 2020–2021 (overcoming the negative consequences of the global Covid-19 pandemic) and in 2022–2023 (military aggression of Russia from the beginning of 2022). To determine the threshold value of the indicator of the ratio of public debt to GDP, the construction of the Laffer debt curve is proposed. On the basis of retrospective analysis and modern challenges, key possible ways of improving approaches to the management of Ukraine's external public debt in the conditions of martial law are determined.

ТЕНДЕНЦІЇ ЕКОНОМІЧНОГО ЗРОСТАННЯ НОВИХ ІНДУСТРІАЛЬНИХ КРАЇН ЛАТИНСЬКОЇ АМЕРИКИ

The analysis of the economic growth of the new industrialized countries of Latin America (Argentina, Brazil, Mexico) and the analysis of the dynamics of the main indicators of the functioning of their economies is carried out in the article. He found that the economic growth of the countries of the region had a cyclical nature. During the colonial period, the development of most countries was limited to the mother countries, which focused exclusively on mining and agricultural development. Since the beginning of the 20th century there was a rather rapid growth of already independent countries, which slowed down under the influence of wars and the Great Depression. In the post-war period, the policy aimed at the development of industry and import substitution contributed to economic growth, which due to a number of problems (high growth in the import of machinery and equipment against the background of low export of products; the external public debt that grew due to the influx of foreign investments; import substitution had a weak effect on production means of production and affected mainly light industry; budget deficit and high inflation, which arose due to the growth of government expenditures to support industry; weak competitiveness of goods protected by the state on the world market), as well as unsuccessful economic strategizing and management led to the crisis of 1970–1980. It are founded, that in the following years in the new industrialized countries of Latin America the policy is replaced by a liberal foreign policy. Nevertheless, there was no increase in industrial potential, which as a result gave moderate incentives to economic growth and was occasionally accompanied by news recessions, the last of which was caused by the impact of the coronavirus pandemic in. The dynamics of the main economic indicators of the newly industrialized countries of Latin America made it possible to establish that the trends of economic growth are contradictory and have a cyclical nature of constant crises and attempts at growth, which was exacerbated under the influence of “peripheral capitalism”.

External public debt and economic growth relationship: Evidence from developing Sub-Saharan African countries, 1980-2018

External public debt and economic growth relationship: Evidence from developing Sub-Saharan African countries, 1980-2018

Залучення боргових фінансових ресурсів на зовнішньому ринку: досвід України

The current macroeconomic and political situation in Ukraine is characterized by instability and impact of a number of adverse factors. In such circumstances, Ukraine's debt relations are focused on the increased need to attract financing. At the same time, because of the ongoing war, Ukraine's expenses are constantly and rapidly growing. The revenue side of the budget under such conditions is limited. Today it is impossible to adhere to the chosen strategic benchmark – reducing the share of the external public debt and loans in foreign currency. The article is aimed at studying the practical aspects of attracting financing by Ukraine in the foreign market with an emphasis on the problems accompanying this process. The article examines the main indicators of attracting financial resources in the foreign market, the structure of Ukraine's debt in terms of currencies, as well as an overview of the risks that accompany the current debt situation. The primary task of Ukraine's debt policy is to optimize the attraction of financial resources in the foreign market within the security corridors. Taking into account the experience of attracting financial resources both in the domestic and foreign loan capital markets will allow defining the existing problems and identifying the directions for optimizing the attraction of such financing in the current crisis. Despite the significant need for financing and limited opportunities to attract resources in the domestic market, it is proposed to limit the use of external sources. In the current period, it is proposed to focus on restructuring the existing debt and finding opportunities to attract soft lending programs. Further, in the postwar period, a clear and flexible debt policy should be formed with the definition of quantitative benchmarks for Ukraine's debt security. However, prospects for solving Ukraine's debt problems will appear only after the settlement of the political situation in the country.

ТЕНДЕНЦИИ ПРЕСТУПНОСТИ ЭКОНОМИЧЕСКОЙ НАПРАВЛЕННОСТИ В БЮДЖЕТНОЙ СФЕРЕ В УСЛОВИЯХ НОВЫХ УГРОЗ И ВЫЗОВОВ НАЦИОНАЛЬНОЙ БЕЗОПАСНОСТИ РОССИЙСКОЙ ФЕДЕРАЦИИ: АНАЛИЗ И ПУТИ РЕШЕНИЯ ПРОБЛЕМ

The article is studied the trends in economic crime in the public sector of the Russian Federation, including crimes related to the development of budgetary funds, their theft and crimes related to government orders, for 2019-2022. This period is associated with the emergence of new threats and challenges to Russia’s national security, which include the spread of the pandemic and the conduct of a special military operation in Ukraine. Based on the results of the analysis, it was concluded that in recent years, economic crime in the public sector has been on a huge scale and, according to certain indicators, is increasing annually both in quantitative terms and in terms of material damage. The criminalization of economic and financial relations continues in the country. This situation has a negative impact on the state of the national security of the Russian Federation, especially given the processes of an internal and external nature that are taking place in the public sector and in relation to it, including the presence of a budget deficit, its huge scale, the need to concentrate and redistribute large amounts of budgetary funds among areas of activity. resources allocated to solve priority tasks, which entails a reduction in budget expenditures in certain areas of the state’s activities, as well as significant fluctuations in the exchange rate of the national currency over the past few years, the presence of a large amount of external public debt, inflation surges in 2022, its high volumes and reduction in the volume of the National Welfare Fund. Measures to combat crime should be systemic, taking into account the accumulated experience of recent years, as well as new realities and forecasts for the development of events in the future. A set of measures to combat crime, developed for the new conditions, should be aimed both at improving the work of law enforcement agencies and improving the situation in the economy and social sphere.

Պետական պարտքի կառավարման արդյունավետության մեծացման մեթոդական հենքի բարելավման հիմնախնդիրները Հայաստանի Հանրապետությունում / The problems of improving the methodological basis for increasing the public debt management efficiency in the Republic of Armenia

The amount of public debt and its ratio to the GDP are one of the most important economic indicators of the state. It is a matter of concern indeed that both indicators are steadily increasing in Armenia. In particular, in recent years the total public debt has almost doubled. By way of various methods (statistical data study, comparative analysis, generalization, etc.), the article not only examines the public debt of the Republic of Armenia and its ratio to the with GDP, but also the prospects for increasing the efficiency of debt management. Meanwhile, aspects of debt security are analyzed in the general system of economic threats to the security of the Republic of Armenia. Throughout the research, special attention is paid not only to the amount of debt and its ratio to the GDP, but also to various theoretical and practical ways of effective management of debt, targeted at its consistent reduction. The author comes up with a few innovative models and mechanisms for solving this problem. More particularly, the method of “Conversion of external public debt into environmental projects”, which has been successfully tested by a number of developing Eastern European, Asian, African and Latin American countries, is proposed as one of the most optimal and effective mechanisms for debt reduction. Its essence lies in the fact that with the creditors’ consent, the debt is partially or completely written off if the debtor state invests these funds in environmental programs carried out on its territory. A good method of debt reduction is the restructuring of the external debt, namely, the one Russia has turned to in order to reduce its debt to the London Club. To sum up, the author has come up with a number of recommendations to optimize the debt management, in particular, reformation of the RA legislation in the financial and budgetary sphere

Macroeconomic Fundamentals, Economic Growth and Poverty in Ecowas Franc Zone: Does Single Currency Matter?

The paper investigated the role of single currency macroeconomic variables (exchange rate, central government tax and grant revenue, central government fiscal balance, inflation rate, external public debt stock, and gross capital formation) on output, poverty, international trade volume and unemployment in ECOWAS Franc zone. The question was about the state of symmetry of these factors and its effects on economic growth. The core objective was to examine the pattern of relationship these variables have with economic growth. The paper covered the period 1980 to 2019 and countries in the zone. Romer endogenous growth model, optimum currency theory (OCA) and PMG-ARDL methodology were used. From the group coefficients, fiscal balance (0.03) and inflation (0.15); exchange rate (-0.29) and inflation (-4.50); GCF (0.01); and tax/grant revenue (4.10e-10) were significant at the 5% level in the output, poverty, international trade volume and unemployment models, respectively. While the poverty model indicated two OCA groups in the region, the output, international trade and unemployment models showed four OCA groups each. The long run error correction terms in the output, poverty, international trade volume and unemployment models were 0.61, 0.11, 0.10, and 0.093 respectively and significant at the 5% level, meaning divergence from long run equilibrium. A minimum of two OCAs and a maximum of four OCAs were found. The paper therefore concluded that the zone does not fulfill OCA requirements and recommended that appropriate policy mix should be developed to align these single currency macroeconomic factors towards achieving sustainable economic growth in the zone.

The Philosophy of External Public Debt Management

The main goal of the presented article is to propose effective solutions in the philosophical context of the management of the foreign public debt of RA. The Government of the RA should adopt as a priority the philosophy of attracting borrowed funds from the domestic market. Considering also the fact that the Republic of Armenia relied on the philosophy of ensuring double-digit economic growth, having a long-term goal to increase the real GDP indicator, which will ultimately contribute to reducing the volume of debt obligations. As a priority contributing to this goal, the RA Government intends to significantly increase the volume of trade turnover[1], especially in connection with the current geopolitical situation, when Armenia, in particular, is the “gateway of Europe” for Russia, which is the main trading partner. [1] In 2021, major trading partners of the RA included Russia from the CIS countries (31.4% of trade turnover, compared to 30.6% of the previous year), and from the EU and other countries China (15% and 13.5%, respectively), Iran (6.0% and 5.6 %), Switzerland (4.6% and 6.6%), Germany (3.5% and 4.2%), Italy (3.4% and 3.3%), Bulgaria (2.7% and 2.4%) and the Netherlands (2.7% and 1.8%). Source: RA Ministry of Finance www.minfin.am.

Impact of Public Debt on the Economic Growth of Pakistan.

Over the years Pakistan has failed to collect enough revenues for financing of its budget. Consequently, the problem of twin deficits emerged and to finance the developmental activities government has to rely on public external and domestic debt. The positive effects of public debt relate to the fact that in resource-starved economies debt financing if done properly leads to higher growth and adds to their capacity to service and repay public debt. The negative effects work through two main channels—i.e., ―Debt Overhang‖ and ―Crowding Out‖ effects. The present study examines the consequences of public debt for economic growth and investment in Pakistan for the period 1972-2009. It develops a hybrid model that explicitly incorporates the role of public debt in growth equations. As the some variables are I (1) and other are I (0) so Autoregressive Distributed Lag(ARDL) technique has been applied to estimate the model. Study finds that public external debt has negative relationship with per capita GDP and investment confirming the existence of ―Debt Overhang effect‖. However, due to insignificant relationships of debt servicing with investment and per capita GDP, the existence of the crowding out hypothesis could not be confirmed. Similarly, domestic debt has a negative relationship with investment and per capita GDP. In other words, it seems to have crowded out private investment. JEL classification: H63, O43, E22, C22 Keywords: Public Debt, Economic Growth, Investment, ARDL

Public Debt Management Experience: The Case of EECCA Countries

The aim of this study is to cluster the most widely used public debt management tools peculiar to the EECCA (Eastern Europe, Caucasus, and Central Asia) markets. Overall, the results show that the volume of EECCA countries’ public debt relative to GDP declined from 2000 to 2015. However, as their public debt enhanced after 2016 and until 2020, inclusive, the need to choose proper tools for its management intensified. The main cause of public debt in most EECCA countries is the state budget deficit (Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan). The second place was taken by the balance of payments deficit (Armenia, Belarus). The only unique country was Azerbaijan, since it is likely to use public debt to finance economic and infrastructure development projects. No less interesting is that not all EECCA member states generate internal public debt. Kyrgyzstan, Moldova, and Uzbekistan have external public debt exclusively due to the lack of free resources that can be attracted from within the economy. In general, the investigation revealed that the main tool for managing internal public debt in EECCA countries is public bonds issued in national and foreign currencies. As for external public debt management, the top position is taken by external public bonds and international loans. The study has only two limitations: methodological and implementation. Other macroeconomic indicators of economic development were not considered, even though they may change the assessment of the effectiveness of the selected tools of public debt management. Meanwhile, the results can only be applied to those countries whose financial market is already formed and who have access to international financial markets. Otherwise, the tools of public debt management are limited.