State Debt Research Articles

Інвестиційні уподобання населення України: реакція на шоки воєнного стану

The article contains the results of the analysis of the investment behaviour of Ukrainian households in the crisis caused by external armed aggression. The financial potential of Ukrainian households in the pre-war period was assessed, and it was concluded that the expenses of most of the population were directed to the consumer rather than investment purposes. It was found that the investment potential of households was directed, first, to the purchase of currency, real estate, and deposits, as well as to risky crypto-currency assets, the active use of which Ukraine is one of the world leaders, instead of public investments in securities and other financial instruments remain extremely limited. The choice of the population of Ukraine in favour of investments in currency, real estate, deposits, and government bonds is currently quite rational since investments in private instruments of the local capital market (both directly and through pension funds and mutual investment institutions) do not provide high profitability and are associated with significant risks. It was revealed that in the conditions of martial law, the investment priorities of the population were most affected by the need to protect savings from depreciation, finance the country’s defence needs, and the corresponding rate of growth of the state debt, as well as high risks of real estate investments and strict restrictions of the National Bank of Ukraine on capital movement. It has been established that at a relatively high level of inflation, Ukrainian citizens do not receive a deposit offer from banks that is adequate to maintain the solvency of their savings. A situation in the banking system that is dangerous for financial stability has been identified, which is associated with the formation of a liquidity “canopy” due to the balances on the current accounts of the population. Emphasis is placed on the need to urgently increase the reserve requirements for demand deposits and current deposits to stimulate the growth of the value of hryvnia assets and change the banks’ liquidity surplus structure. Prospective directions and tools for the placement of household savings are justified, considering the needs of the post-war recovery of Ukraine’s economy and the prospects for European integration.

The concept and significance of the national debt of Ukraine in the conditions of military status

This article is devoted to the analysis of the problems of managing the state debt of Ukraine, which is one of the most important aspects of ensuring the state's debt security. The article reveals the concept of public debt, analyzes its role, and defines the main problems of management. It has been established that there is no single definition of the concept of «public debt» in science. A statistical assessment of state borrowing was carried out and the reasons for the rapid growth of the state debt were substantiated in order to urgently solve the social and economic problems of society under military status. It has been established that state borrowing is considered a source of investment, a means of reducing the impact of the negative consequences of the budget deficit, and is also an effective means of accelerating the growth of the country's economic potential.
 The influence of the state debt on the socio-economic development of Ukraine was studied, and the main causes and consequences of the future increase in external borrowing, which negatively affect the state of social and economic processes in the state and its debt security, were determined.
 A statistical analysis of the dynamics and structure of the state and state-guaranteed debt of Ukraine was carried out. It was determined that, despite the gradual growth of the state debt in Ukraine since 2018, in 2022, due to the war on the territory of Ukraine, there was a rapid increase in the state and guaranteed state debt of Ukraine, which caused an increase in debt pressure on the budget. It has been analyzed that the volume of budget expenditures, which is directed to the servicing of debt obligations, significantly reduces our potential for financing various economic and social programs. It was established that despite the support of Ukraine from Western countries, the country's government still needs international financial assistance.
 Recommendations were made regarding legislative improvement of public debt management, improvement of debt policy to increase the level of debt security of Ukraine.

Not Even with a Pandemic: The IMF, Human Rights, and Rational Choices Under Power Relations

Since the 1970s, neoliberalism has implied a deep reconfiguration of national economies and a significant increase in inequalities. The International Monetary Fund (IMF), which considers itself above human rights, has been a central institutional vehicle in this change through its credits and conditionalities that regularly translate into violations of the human rights of debtor states’ populations. Neoliberalism entertains a hegemonic notion of human rights that proposes a vision of them based on the—alleged—defense of civil and political rights—that focuses on the individuals and distrust of the state—to the detriment of economic and social rights—where the relational aspect is essential, and the state assumes positive obligations. This has led to strong criticism of the ineffectiveness of human rights in producing real change in the world. This article discusses this minimalist and defeatist interpretation of human rights, highlighting their transformative potential in the fields of finance and economics. Human rights can function as a method to achieve, in fields of high complexity and abstraction, objectives that today enjoy broad consensus: reducing poverty, inequality, and climate change. This study shows that the marginalization of human rights that characterizes the IMF parallels the excessive exercise of its power in the world. Finally, some indications are provided regarding how these tensions were exacerbated in the context of the COVID-19 pandemic.

THE DETERMINANT OF DECOMPOSITION OF FOREIGN DEBT IN INDONESIA

Since 1990 there have been reforms in both monetary policy and fiscal policy in Indonesia, which can affect the decomposition of foreign debt. The World Bank report in international debt statistics 2021 shows that Indonesia is one of the countries that have the most debt, which ranks 7th in the world and first in ASEAN with total foreign debt. This study uses time-series data from 1990 to 2021 using the VAR method to determine the response of foreign debt to macroeconomic fluctuations. Based on the results of the study shocks to the GDP variable will be responded to negatively by debt. The sensitivity of the debt response is shown to be positive when there are shocks to government spending and interest rates. The results of the variance decomposition show that government spending has the largest contribution to variability compared to other variables in the model. The implications of the research need to be careful in adding new debt amid uncertain macroeconomic conditions because it can burden the state budget.

Problems of Pension Provision Caused by COVID-19

The corona virus infection (COVID-19) had a destructive impact on the finance and economic system. There were interruptions in business processes, general slowing-down in economic activity, sharp rise in unemployment rate and initial drop in asset value due to finance market contraction. Monetary-credit and taxation-budget policy resulted in even higher interest rates, sharp growth in budget deficit and state debt. These factors affected both the state pension distribution and defined contribution pension systems. The goal of the research is to assess the impact of the corona virus infection (COVID-19) on financial wellbeing of the population and economic development of the country. Conditions were studied, when pensioners could invest their savings. The following methods of academic investigation were used: analysis, forecasting, synthesis, induction, deduction, observation and comparison. A conclusion was drawn about the adverse impact of the pandemic on the pension system and changes in the global inflation and unemployment rates during the period of pandemic worsening in 2020–2021. Forecasts of the mentioned indicators were calculated up to 2024. Feasible measures of people support during the pandemic were proposed. The problem of pension system vulnerability to cyber attacks and various frauds was highlighted.

Аnalysis of public debt based on long time series, trends and forecasts

The size and impact of public debt on economic and social processes is a very relevant issue today. The crisis caused by the coronavirus epidemic has caused a significant increase in public debt not only in Hungary, but also in the whole world. It can be said that the central issue of economic policy today is how to get out of this situation, what tools are needed to return at least to the pre-crisis level of public debt on a fair basis. The purpose of our research is to analyze public debt as a share of GDP in Hungary based on long time series, establish trends and make a forecast. The share of public debt in GDP is one of the most important macroeconomic indicators. This is justified not only by its role in the analysis of economic processes (risk, economic growth, investments, money and capital markets), but also by its constitutional-financial-legal assessment. The ratio of public debt to GDP is an important indicator for the long-term stability of economic processes in the state. The relevance of the analysis of public debt based on analytical trends is enhanced by the economic shock caused by the COVID epidemic, which was an unpredictable factor, and the situation formed by the epidemic deviates significantly from the stable trends of economic processes in previous years.For the study, secondary data were used, which were evaluated using trend analysis. Statistical smoothing of the time series of public debt as a share of GDP was tested at a statistically acceptable level using a quadratic polynomial trend. Modeling was performed using linear and logarithmic trend functions, in both cases a less favorable fit of the function was obtained than in the case of an exponential trend. The obtained short-term forecast indicates a gradual decrease in the state debt indicator, which is confirmed by expert conclusions.

Sweden, Inc.: Temporal Sovereignty of the Realm and People from the Middle Ages to Modernity

Sweden, Inc.: Temporal Sovereignty of the Realm and People from the Middle Ages to Modernity

КЛЮЧОВІ ДЕТЕРМІНАНТИ СТАНУ РИНКУ ДЕРЖАВНОГО БОРГУ УКРАЇНИ В ДОВОЄННИЙ ПЕРІОД

Balance on the public debt market is a guarantee of the stability of public finances. The state of public debt and the country's debt security depend on the efficiency of the public debt market of any country. When determining the key determinants of the debt market state, indicators that take into account the macroeconomic conditions of the borrowing country should be taken into account. Therefore, the article focuses on relative indicators. In addition, it is worth taking into account not only the indicators contained in domestic regulations, but also international recommendations. Usually, international standards characterizing debt security are quite high. Compliance with such indicators is primarily important for countries with emerging markets, to which Ukraine belongs. And for highly developed countries, the key is compliance with solvency, not indicators and norms related to the size of the debt and its components. The key determinants of the Ukraine's public debt market state in the pre-war period were the definition and assessment of the following indicators: the ratio of state and guaranteed state debt to gross domestic product, the share of debt in foreign currency, the share of guaranteed debt, the share of external debt, the ratio of gross external debt to GDP and the ratio of official international reserves to external debt, an indicator of the ratio of debt repayment expenditures in relation to general budget expenditures, as well as the ratio of debt service expenditures in budget expenditures. All the analyzed indicators illustrate a permanent excess of the permissible norms, which are substantiated by scientists and recommended by international financial institutions. The high debt burden on the budget and the economy as a whole, caused by the State debt accumulated over the years, is extremely negative. The high level of expenses for maintenance and debt payment makes it necessary to reduce the total expenses of the state, which affects social or other components, or forces to expand fiscal sources and increase fiscal pressure.

Is austerity a cause of slower improvements in mortality in high-income countries? A panel analysis

BackgroundThe rate of improvement in mortality slowed across many high-income countries after 2010. Following the 2007–08 financial crisis, macroeconomic policy was dominated by austerity as countries attempted to address perceived problems of growing state debt and government budget deficits. This study estimates the impact of austerity on mortality trends for 37 high-income countries between 2000 and 2019. MethodsWe fitted a suite of fixed-effects panel regression models to mortality data (period life expectancy, age-standardised mortality rates (ASMRs), age-stratified mortality rates and lifespan variation). Austerity was measured using the Alesina-Ardagna Fiscal Index (AAFI), Cyclically-Adjusted Primary Balance (CAPB), real indexed Government Expenditure, and Public Social Spending as a % of GDP. Sensitivity analyses varied the lag times, and confined the panel to economic downturns and to non-oil-dominated economies. ResultsSlower improvements, or deteriorations, in life expectancy and mortality trends were seen in the majority of countries, with the worst trends in England & Wales, Estonia, Iceland, Scotland, Slovenia, and the USA, with generally worse trends for females than males. Austerity was implemented across all countries for at least some time when measured by AAFI and CAPB, and for many countries across all four measures (and particularly after 2010). Austerity adversely impacted life expectancy, ASMR, age-specific mortality and lifespan variation trends when measured with Government Expenditure, Public Social Spending and CAPB, but not with AAFI. However, when the dataset was restricted to periods of economic downturn and in economies not dominated hydrocarbon production, all measures of austerity were found to reduce the rate of mortality improvement. InterpretationStalled mortality trends and austerity are widespread phenomena across high-income countries. Austerity is likely to be a cause of stalled mortality trends. Governments should consider alternative economic policy approaches if these harmful population health impacts are to be avoided.

External Debt Management in the System of Financial Security of the State

The article is devoted to the study of the state of the state debt and the state of Ukraine’s debt policy. The relevance of this topic is that during the previous years, the public debt of Ukraine, both external and internal, was constantly growing, creating threats to the country’s debt security and financial stability. Over the last decade, the problem of the growth of Ukraine’s foreign debt continues to worsen. Attracting loan capital is caused by the need to replenish currency reserves in order to increase the resources of the country’s economic development and ensure the stability of the national currency. The purpose of the study is a theoretical generalization of the prerequisites and features of the formation of the national debt of Ukraine and the justification of the policy of management and service of the external debt, which will contribute to ensuring the financial security and economic development of the country. In accordance with the set goal, the work is supposed to solve a number of problems, the main of which are: clarifying the impact of foreign debt on the financial security of the state; clarification of the relationship between the financial and economic development of the state and the state debt; assessment of the state debt of Ukraine and the state of its financial security; development of proposals for improving the management and servicing of public debt in Ukraine. To achieve the goal, the following scientific methods were used in the scientific research: analysis and generalization - to study the current state of debt security in Ukraine; comparison and compilation - for the analysis of world and national experience in calculating the system of indicators of financial security; grouping – for clustering of relevant indicators of the impact of debt on financial security; statistical analysis – to study the dynamics of debt security indicators and calculate an integral index based on them. These methods make it possible to single out the challenges and prospects of the Ukrainian economy on the way to achieving the optimal level of the country’s foreign debt. The structure of the state debt of Ukraine and its optimal limits have been determined. An analysis of the current state and main trends of the state debt of Ukraine was carried out. In particular, the trends of its share in GDP were determined, a thorough structural analysis of the national debt of Ukraine was carried out for the period from 01.01.2013 to 01.01.2022, and an assessment of budget costs for servicing and repayment of the national debt of Ukraine was carried out. An analysis of the state and structure of the state debt of Ukraine makes it possible to identify trends in its volume growth. During the analyzed period, the size of the national debt of Ukraine changed rapidly, which is determined by general factors of economic development. The authors found that in the structure of the state debt, there is a clear tendency towards the predominance of external debt over internal debt. The main causes of the state debt are the state budget deficit and significant amounts of internal and external borrowing. Further growth of the national debt of Ukraine is very dangerous and may lead to the loss of economic independence, the withdrawal of funds from the financial market that could be used for the development of the real sector of the economy, a decrease in competitiveness on domestic and foreign markets, and a decline in the standard of living of the country’s population. But reaching the projected level threatens Ukraine with default. In order to avoid negative consequences, it is proposed to improve the mechanism of public debt management at the institutional level, to improve the legal framework, and also to increase the level of own gross domestic product by modernizing domestic enterprises.

Effects of Zakat and Government Debt on the Indonesian Economy

In order to increase the country's economic growth, a stimulus is needed that can be used to detect whether there is an effect or not on changes in economic growth. As in the concept of modern economic growth which involves the role of household consumption and government expenditure. This thesis also uses the variable of state debt as a form of economic stimulus so that it will increase further and the distribution of zakat is also used as a driving factor for public consumption. This study aims to analyze whether there is an influence of zakat, consumption, state debt and government spending on economic growth in Indonesia for the period 2018-2020. The type of data used is secondary data obtained from BPS, BI, and the Ministry of Finance through published agency reports that were analyzed using multiple linear regression with the help of the E-Views 10 Program. The results of this study are the variables of zakat, consumption, state debt and government spending simultaneously have an effect on economic growth in Indonesia for the 2018-2020 period. The basic formulation of the philosophy of Islamic economic development includes the first Tawhid rububiyah, which states the basics of Allah's law to further regulate the development model based on Islam. Second, justice, namely development that is not lame (gaps), but equitable economic development (growth with equity). The third is the Khilafah, which states that humans are Allah's representatives on earth to prosper the earth and are responsible to Allah regarding the management of the resources entrusted to them. and lastly, Tazkiyah, which is to purify humans in their relationship with Allah, each other and the natural environment, society and country.
 Keyword : National Debt, Economy, Zakat

INVESTIGASI TERHADAP KEBERADAAN SURAT UTANG NEGARA

The government is the basic sector which is expected to be able to become a driving force in the economic development sector, by utilizing several existing sources of financing, one of which is state debt securities. about government bonds. Government bonds are financial instruments whose payments use the interest system.

Determinants of Government Debt in the Member States of the European Union: Sources of Fiscal Risk

Abstract In times when the national economy needs increased financial support from governments, the fiscal space they have and the determinants of public debt come to the fore. Sudden increases in public spending or significant decreases in public revenue represent fiscal risks, and the level of sovereign debt is a measure to quantify fiscal risk. At international level, banking crises, government guarantees, publicprivate partnerships, companies with majority state capital, and non-performing loans are revealed by history as the main sources of financial crises and fiscal risk. This study aims to identify whether social assistance expenditures, government guarantees, public-private partnerships, non-performing loans, or tax revenues influence the evolution of the government debt of the Member States of the European Union. The data used were taken from Eurostat and were organised as panel data, the analysed period is 2010-2018. To estimate the regressions, we used the Eviews software, and the results obtained revealed that social assistance is the variable that most strongly influences, in the same sense, the public debt. This points to the fact that changes in pension and social assistance spending, for example, topics with greater social impact, are capable of further indebtedness and have long-term effects on government spending on interest.

An Alternative for the External Debt with the Implementation of Islamic Financial Instrument: Study on Indonesia Deficit Budget Policy

Indonesian government tends to use a budget deficit policy which has an impact on the amount of the state budget being no larger than the revenue earned by the state. This certainly triggers the government to incur debt, especially foreign debt. Indonesia as a country with a majority Muslim population certainly has great potential in utilizing Islamic financial instruments as a substitute for foreign debt. Therefore, this study aims to examine good state budget policies in avoiding state debt through the implementation of Islamic financial instruments such as zakat and waqf. The paper uses a descriptive qualitative approach. This study uses secondary data on state revenues, state expenditures, the state budget deficit, and Indonesia's sovereign debt in 2016-2020. The data were analyzed descriptively to determine the negative impact of Indonesia's current foreign debt. The result concludes that Islamic financial instruments such as zakat and waqf can be used as an alternative to foreign debt. In addition, the government can also issue SBSN, such as Sukuk, which encourage public confidence to invest in the government

Fiscal decentralization and public debt: New evidence from EU countries

The aim of the paper is to examine the relationship between fiscal decentralization and government debt of EU countries with respect to EU accession, country size and number of government levels in the period of 1999 – 2019 using panel data models based on six various estimators. The differences regarding the effect of fiscal decentralization on government debt were estimated on the basis of the seemingly unrelated regression (SUR). The research results have shown the following: 1. The effect of fiscal decentralization on public debt is statistically significant. 2. Fiscal decentralization has negatively affected public debt of EU member states in the observed period. 3. The direction and intensity of the effect of fiscal decentralization on public debt depends on the size of the country (measured by the number of its inhabitants), the number of government levels and the year of the country’s accession to the EU.

The international ‘debt crisis’ of the 1980s in the Middle East and North Africa: a review, an outline

The year 2022 marks the fortieth anniversary of the 1982 Mexican debt crisis, the first of a long series of financial turbulences that would soon spread to most of the developing world and beyond. Ever since, international historiography has produced a wide arrange of analyses that, despite their diversity, came to see the 1980s international debt crisis as a momentous event through which the United States and Western Europe reimposed their financial hegemony over the decolonised world and socialist camp. The contributions to this special issue of Middle Eastern Studies primarily aim at reassessing the process that brought economic neoliberalism throughout the Middle East and North Africa (MENA) in the context of debt crises. In particular, they challenge ‘teleological’ views that see the opening to market economy as a result of the creditors’ agenda, thus depriving actors in debtor countries of their agency. The essays published herein explore the levers, instruments and policy-making process to which debtor states resorted to shape their own integration process in the global neoliberal economy.

Successful territorial brand formation (on the example of Singapore)

Main directions of improving the strategy of Ukraine's external debt management based on the results of the assessment of the main indicators of external state debt in relation to the criteria of economic security and the impact of external debt on key macroeconomic indicators are substantiated in the article. According to the results of the regression analysis of the relationship between main macroeconomic indicators and indicators of external debt, it was concluded that the external debt has an ambiguous impact on the economy of Ukraine. The hypothesis about the negative consequences of increasing the external state debt for the economy of Ukraine has not been fully confirmed. Based on the analysis of the data for 2008-2020, the direct impact of changes in external debt on GDP in actual prices, as well as the direct impact of gross external debt on changes in GDP per capita was identified. This confirms a positive role of external borrowing in ensuring Ukraine's economic growth. At the same time, the inverse dependence of Ukraine's GDP on changes in external debt per capita and the ratio of total payments to service external debt to state budget revenues was revealed. The dependence of GDP per capita on the ratio of total external debt service payments to state budget revenues is also inverse. The results of the study suggest an ambiguous impact of external debt on the national economy, which necessitates effective management of the external debt. The Long-Term Strategy for Ukraine's External Debt Management until 2030 should become an important institutional tool for reducing threats to the country's economic security arising from the growing debt burden. The purpose of the proposed Strategy is to minimize the cost of servicing external debt in the long run and reduce the level of relevant risks.

Cilicia in the Documents of the U.S. State Department in 1919−1920

The diplomatic documents from the U.S. Department of State stored at the National Archives of the USA in Washington and Republic of Armenia in Yerevan, which were officially published in volumes by the U.S. Government yet in 1931-1947, contain remarkable material on Cilicia. They throw light upon the negotiations between the leaders of the United States, Great Britain, France, Italy and delegations representing those countries at the 1919-1920 Paris International Peace Conference on political status and borders of Cilicia, establishment of a mandate for it, withdrawal of British troops from the region, occupation of Cilicia and Syria by French troops. The documents of the State Department reveal the contradictions between the Great Powers on the above-mentioned issues, describe their interests in the region. Records for the meetings of the Council of Ten of February 4, Council of Four of March 20, May 14, 21, 31 and Council of Five of July 18, August 25, 1919 are valuable from this point of view. The “Scheme for settlement in the Turkish Empire” of May 21, 1919, reflects the position of the Prime Minister of Great Britain D. Lloyd George on Cilicia. The U.S. President W. Wilson’s approaches concerning Cilicia are reflected in reports of the U.S. Commissioners in Turkey C. Crane and H. King of August 28, 1919, and the chief of the military mission to Armenia General J. Harbord of October 16, 1919. The difficulty of the Turkish border demarcation through Cilicia is presented in a note issued by the Allied Supreme Council on April 26, 1920, to U.S. Secretary of State B. Colby. The U.S. State Department diplomatic documents confirm that the Allies were practically not interested in resolving the issue of ensuring the security of Cilicia and its Armenian population. Based on the 1916 Sykes-Picot Anglo-French secret agreement, the 1920 Treaty of Sèvres provided for the transference of the mandate of Cilicia to France. It became the beginning of handing over the land to the Kemalist Turkey. Thus France, seeking to receive its state debt from Turkey, became an accomplice to the new genocide of Cilicia Armenians.

An Empirical Analysis of Russian Regions’ Debt Sustainability

This paper investigates the impact of the moderate growth of government borrowing on debt sustainability in 11 Russian regions over about 10 years, starting in 2010. The current study aims to assess the debt sustainability of the Russian region’s budget by determining Euclidean distance budget constraints and cluster analysis. This study is based on the methodology of hierarchical cluster analysis, which makes it possible to isolate regions of accumulation of objects from the aggregate data and combine them into homogeneous segments. The central hypothesis of this study is that by using this method, it is possible to increase the accuracy of the values that limit budget constraints in a region’s financial system. This study, using open data from the Federal State Statistics Service, is based on a database of statistical, financial, and economic indicators of the Russian economy. The calculations include about 45 macroeconomic indicators, which reflect the ratios of socio-economic development of the region’s financial system. The methodology described in the paper for assessing the debt sustainability of budget policy proves the need to calculate six indicators and determine the debt limits for the regions of each cluster. It finds a need to reduce the high debt burden of 46% of the regions belonging to the Northwestern Federal District. Confidence intervals for the debt limit suggest that the negative growth effect of high debt may start from levels of around 5% of the debt-to-GDP ratio and about 43% of the debt-to-revenue ratio. The results indicate that regions with a high level of debt sustainability include St. Petersburg city, the Leningrad region, and the Kaliningrad region. From a state debt policy perspective, the results provide additional arguments for debt reduction for the Republic of Komi, the Republic of Karelia, the Arkhangelsk region, and the Pskov region. The general conclusion of the study boils down to the need to reduce the debt burden of the budgets of some regions of the SFZO, as well as to the need to change the upper limits of debt, which are equally set for all regions by the Budget Code of the Russian Federation, to differentiated values of public domestic debt, taking into account the results obtained in the study.

Cambodia: Technical Assistance Report-Government Finance Statistics Mission (April 26-July 15, 2021)

A follow-up technical assistance (TA) mission to the Ministry of Economy and Finance (MEF) was conducted remotely during 12 days over the period of April 26–July 15, 20211. This activity was part of Cambodia’s participation in the Japan-funded Government Finance Statistics (GFS) and Public Sector Debt Statistics (PSDS) Project for selected Asian countries (JSA3)2. The mission liaised with Mr. Alexandros Mourmouras, Director of the Capacity Development Office in Thailand (CDOT), Mr. Rifaat Basanti, the IMF Regional JSA3 GFS/PSDS Project Manager, Ms. Delphine Anne Moretti, the IMF Regional Public Financial Management (PFM) Advisor for Southeast Asia, and Mr. Sean Craig, Macroeconomic Advisor – all in the CDOT, and Mr. Yasuhisa Ojima, the IMF’s Resident Representative for Cambodia. The mission would like to thank the authorities for their excellent collaboration and support.