International standards of public debt statistics and their implementation in the public finance management system of Ukraine (end)

Abstract

Introduction. Theoretical-methodological and methodical substantiation of approaches to the formation, structuring and systematization of statistical information on the public debt of Ukraine in accordance with international standards is of fundamental importance for improving the quality of strategic management of public finances. The implementation of international standards for statistical measurement and diagnostics of public debt makes it possible to objectively monitor the parameters of debt sustainability and bring public financial management tools closer to the best examples of world practice. The implementation of international standards for public debt statistics is an important element in ensuring the transparency of public finances, allowing to optimize cooperation with the International Monetary Fund (IMF) and other international financial organizations. Institutional and regulatory implementation of international standards of public debt statistics will allow to increase the level of reasonableness of fiscal risk assessments and the predictability of debt policy in the medium term, to reduce the negative impact of political cycles and economic fluctuations on the state of public finances. In accordance with the Association Agreement of Ukraine with the EU and with Ukraine acquiring the status of a candidate country for joining the EU, the issue of approximation of national legislation to EU legislation, including regarding the national debt, has acquired extraordinary political, economic and social importance, especially in the conditions of external aggression of the Russian Federation and the tasks of the post-war reconstruction of the country’s economy. According to the Strategy of Economic Security of Ukraine for the period until 2025, the question of the acceptability of the level and sources of financing the public debt is one of the key factors for ensuring the financial security of the country. Problem Statement. Interrelated components of the issues of this article are highlighted: 1) institutional coverage of public finances and public debt; 2) the system of public finance management in the context of mutual compliance of objects, subjects and methods of such management; 3) standardized methodology for quantitative statistical measurement of public debt as part of public finances; 4) implementation of international standards of public debt statistics into the national system of public finance management. The purpose is to substantiate conceptual and methodological approaches and recommendations regarding the improvement of statistical measurement and systematization of information on the public debt of Ukraine in accordance with international standards; making changes and additions to the first part of Article 2 of the Budget Code of Ukraine regarding the public debt. Methodology and methods.. The general environment of analysis is public finances; the unifying shell is the public finance management system; the object is public debt; the subject is international standards of public debt statistics; the expected result is proposals and recommendations regarding the implementation of the specified standards with the aim of eliminating the legal uncertainty of the meaning of the term “public debt” in the first part of Article 2 of the Budget Code of Ukraine, bringing it into line with the norms of EU legislation, which will allow for reasonable quantitative measurements and international comparisons of public debt in Ukraine and EC countries. Methods of comparative qualitative and quantitative analysis, structural-institutional and structural-functional analysis, theoretical generalizations are applied; basic methodological principles and methodological approaches contained in the international System of National Accounts 2008, the European System of National and Regional Accounts 2010, other international standards related to public finance and public debt statistics. Results. In Ukrainian legislation (budgetary, tax, financial) there is no concept of “Public Finance”. The phenomenon of “fundamental uncertainty” has in many respects an ancient and systemic nature. This also applies to the term “public debt” in the first part of Article 2 of the Budget Code of Ukraine. The most complete understanding of public finances in a broad sense, which the author adheres to: “Public finance are the finance of the public sector of the economy”. Classification of international standards of public debt into five groups is proposed. The first is the so-called basic functional and organizational principles. The second is “universal” standards, which are the general conceptual and methodological basis for public debt statistics. The third is the standards of public finance statistics. The fourth is the standards related to the assessment of external debt. The fifth is special data dissemination standards. The implementation of international standards of public debt into the system of public finance management of Ukraine requires amendments to the national legislation. For this purpose, a project of the Law of Ukraine “On Amendments and Additions to Part One of Article 2 of the Budget Code of Ukraine (Regarding State Debt)” was developed. Conclusions. Public finances, including public debt, as an object/objects of management are subject to a clear classification based on the concepts of institutional units and institutional sectors (subsectors) of the national economy used in SNA 2008, ESA 2010, and other international standards. The starting point is the concept of the public sector of the economy, which combines two components - the sector of general government and the sector of public corporations. It is proposed to legislate the definitions of the public sector of the economy and public finance in the Economic Code of Ukraine. The new definition of public debt, which is proposed to be implemented together with related categories under the first part of Article 2 of the Budget Code of Ukraine, is justified.