Public debt management briefly. State debt
In the course of the country's economic activity, debt arises, since often borrowed funds are required for the development and promotion of economic activity. In order to correctly distribute funds and not bankrupt your state by inept use of financial resources, it is necessary to regulate borrowed and own resources. Therefore, you need to know who manages the public debt of the Russian Federation.
General information
If we consider the public debt as a financial instrument, then with its help the executive and legislative bodies of the country influence money circulation, investment policy, production and other areas. When considered as an object of government. structures, use it to establish the necessary provisions for successful operation. Thanks to this, the government controls the public debt, regulates the issue and circulation of loan funds, the fulfillment of debt obligations, etc.
There are two main types of government debt:
- External. It includes a loan taken from another country, a foreign company, a citizen, etc. Such loans are quite burdensome for the state, since raw materials, minerals, financial assets, etc. are used to repay it. 20-30% of all foreign trade turnover, then the country becomes a debtor. New credits will not be available to her.
- Interior. It includes all obligations not fulfilled to its own population (individuals and legal entities): non-payment of salaries, pensions, scholarships and benefits, etc.
Also, the capital (the total amount of debt for all borrowings) and current (payments to creditors on loans whose maturity has already come) are distinguished.
The national debt can be formed both to the country and to an individual
Public debt management objectives
For the efficiency of regulation of this value to be high, it is necessary to solve the set tasks. These include:
- Stabilization of the amount of debt at a level that will not threaten the country's economy and security. The fulfillment of the conditions for the obligations should be carried out without serious damage and underfunding of socio-economic programs.
- Reducing the amount of funds borrowed to the optimal level. This is done by extending the terms of payment, raising the price of securities, attracting new investors, etc.
- Formation and maintenance of government authority and the status of a reliable borrower.
- Carrying out activities in such a way that the market for managed public debt is predictable and stable.
- Effective and strategically beneficial use of credit funds.
- Ensuring timely payments on obligations so that there are no delays and thus it would be possible to exclude the occurrence of debt.
- Expansion of types and forms of borrowings, their distribution by directions, etc.
- Control over the activities of government agencies that provide administrative and management functions.
There are many more tasks to be performed by the state, but these are the main ones.
Management process
This definition implies several functional components:
- Planning. In this case, all pros and cons are weighed, conditions are calculated and discussed (terms, payment amounts, interest rate, etc.).
- Service. At this stage, activities are carried out aimed at repaying the debt base, interest, commissions, etc.
- Monitoring and tracking the status of all loan obligations.
Like any debt, the state should be well managed
Public debt is managed through the management of its composition and structure (debt management). The essence of this process lies in the distribution of all items of debt according to certain criteria. The objects it affects are:
- The state of debts and their terms - by correctly distributing them, the state can partially or completely restructure its loan.
- Credit structure (percentage and numerical ratio of internal and external, market liabilities, distribution by categories, etc.).
- The size of the total public debt.
An objective assessment of all circumstances and the correct system of actions are the key to a successful credit policy.
What principles should be used to manage public debt
There are several bases on which to regulate this area:
- Unconditionality. It implies that the state, which has assumed a debt obligation, will certainly fulfill its conditions.
- Unity. In accordance with this, the government maintains a record of all material loans, regardless of their type (municipal, federal, international, etc.).
- Minimizing risks. This item includes activities aimed at reducing the burden of loans on the country's economy.
- Optimality. The structure and management system, terms and conditions should be as convenient as possible.
- Financial independence. Despite the burdensome obligations, the sovereignty and freedom of action of the state is not limited.
- Transparency. All terms and conditions of the loan must be open to the public, rating structures and the media.
Compliance with these principles is imperative, otherwise a violation may lead to termination of the contract. At the same time, debt management is obliged to include all these points.
Management is conducted in accordance with established principles
Management measures
There are quite a few ways that the application of which is necessary to manage public debt. These include:
- Refinancing is paying off a debt in whole or in part through a new loan.
- Restructuring is a mutual agreement of the parties on changes in the terms of borrowing (terms, amounts of payments, etc.).
- Conversion - an adjustment to the yield on the obligation (decrease or increase in interest, etc.).
- Consolidation is an increase in the maturity of a loan, which reduces the burden on the country's budgetary capital.
- Unification is the formation of one large loan from several small loans.
- The delay in repayment allows not only to extend the loan, as in the case of consolidation, but also to stop the accrual of interest.
- Cancellation implies a complete waiver of the debt obligation. It is applied to the subjects of the contract only when absolutely necessary (insolvency, emergency, disaster, etc.).
Any of these decisions requires deep study and analysis in order for their effect to lead to the expected result. All these methods of public debt management in the Russian Federation violate the most important principle of unconditionality.
Control over management
The most important indicators in this process are the following:
- the amount of debt;
- maintenance costs.
Careful and competent control over the management of state. debt allows you to avoid budget deficits. If this is not followed, the country may find itself in a difficult situation, so the assistance of a third party is often required in resolving disputes.
Outcome
In 2018, the Russian government is actively working to improve the situation in this area, to increase the country's credit confidence in the international arena. For this, various innovations and other effective production measures are used. The high authority and positive reputation of the state among creditors indicates a stable and profitable economy of the country.
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Public debt management is a set of actions by the state represented by its authorized bodies for regulating the size, structure and cost of servicing the state debt. The purpose of public debt management isto find the optimal balance between the state's needs for additional financial resources and the costs of attracting, servicing and repaying them.
Public Debt Management Principles:
1. Unconditional (ensuring accurate and timely fulfillment of government obligations to investors and creditors without setting additional conditions)
2. The principle of uniformity of accounting (accounting in the process of government debt management of all types of securities issued by federal authorities, authorities of the constituent entities of the Russian Federation and local governments.)
3. Unity of debt policy (ensuring a unified approach in public debt management policy on the part of the federal center in relation to the subjects of the federation and municipalities)
4. The principle of consistency (coordination of the interests of creditors and the borrower, represented by the state)
5. Risk reduction (performing all the necessary actions to reduce the risk of both the lender and the investor)
6. Optimality (creation of such a structure of government loans, in which the fulfillment of obligations under them would be associated with minimal costs and minimal risk, and would also have the least negative impact on the country's economy)
7. The principle of transparency (provision of reliable and timely information about the parameters of loans to all interested users)
In a broad sense, public debt management involves:
1. Formation of policy in relation to public debt.
2. Determination of the main indicators and limit values \u200b\u200bof government debt.
3. Establishing the main directions of influence on micro- and macroeconomic indicators.
4. Allocation of priority areas for the use of attracted resources.
Methods for ensuring public debt management:
1. Refinancing method - repayment of part of the public debt at the expense of newly attracted funds.
2. Conversion - change in the yield of the loan.
3. Consolidation - transformation of a part of the existing debt into a new one with a longer maturity.
4. Novation - an agreement between the state-borrower and lenders to replace obligations under the same loan agreement.
5. Unification - a decision of the state to combine several previously issued loans.
6. The method of deferral - consolidation while the state refuses to pay the income on loans.
7. The default method is the refusal of the state to pay the state debt.
In the management of public debt the following parameters should be considered:
1. The total volume of the RF government debt.
2. Ratio of spending on servicing the public debt and state budget revenues.
To manage the state debt, it is necessary to strengthen state influence and control over the state debt and strive to reduce the dependence of the state budget on the situation with borrowing.
In addition, when managing the public debt, it is necessary to delineate the powers of various government bodies that manage the public debt, and to develop a procedure for their interaction.
Debt of the state, like finance in general, can be a tool and object of management. As management tool state and municipal debt we provide an opportunity for state authorities and local self-government bodies to influence money circulation, financial market, investments, production, employment, organization of savings by the population and many other economic processes.
When the state and municipal debt acts as object of management, the state determines the relationship between various types of debt activities (borrowing and guarantees), the structure of types of debt activities in terms of timing and profitability, the mechanism for constructing specific loans and guarantees, the procedure for issuing and circulating loans, the procedure for providing guarantees and fulfilling financial obligations under them. The authorities and local governments establish all other necessary practical aspects of the functioning of state and municipal debt.
In the process of managing state and municipal debt, the following general are solved tasks:
Attraction of state and municipal borrowings in amounts that supplement the revenues of state authorities and local authorities to the amount necessary and sufficient to ensure the fulfillment of all their financial obligations;
Maintaining the amount of internal and external debt at a level that ensures the preservation of the country's economic security;
Minimizing the cost of debt based on lengthening the borrowing period and reducing the yield on government and municipal securities, moving to other markets and shifting attention to other groups of investors;
Maintaining the reputation of the Russian Federation as a first-class borrower based on the impeccable fulfillment of financial obligations to investors;
Maintaining stability and predictability of the debt market;
Achievement of effective and targeted use of funds borrowed by public authorities and local authorities, and loans guaranteed by them;
Diversification of debt obligations in terms of borrowing terms, profitability, forms of income payment and other parameters to meet the needs of various groups of investors;
Coordination of actions of federal government bodies, government bodies of the constituent entities of the Russian Federation and local government bodies in the country's debt market.
Thus, the management of state and municipal debt is a set of measures taken by public authorities and local governments to use debt relations to create favorable macroeconomic conditions for the development of the country and its individual territories.
Distinguish between strategic and operational management of state and municipal debt. Perspective issues of debt management are within the competence of the Federal Assembly of the Russian Federation, the President of the Russian Federation and the Government of the Russian Federation, legislative (representative) and executive authorities of the constituent entities of the Russian Federation and local governments. The executive authorities prepare draft laws and decisions concerning management strategies debt relations. The Federal Assembly of the Russian Federation, the legislative bodies of state power of the constituent entities of the Russian Federation and representative bodies of local self-government accept them, and the President of the Russian Federation and the heads of regional bodies of state power and local self-government bodies reject or sign them.
In particular, annually, the federal law on the federal budget for the next financial year and planning period establishes the maximum volumes of the state internal and external debt; sources of domestic financing of the budget deficit, including receipts from the issuance of government securities; the maximum amount of external borrowing; the cost of servicing the state internal and external debt; upper limits of state internal and external guarantees. On the proposal of the Government of the Russian Federation, the State Duma of the Russian Federation approves the program of state external borrowings of the Russian Federation and the program of state internal borrowings of the Russian Federation.
Operational management State and municipal debt is carried out by the Government of the Russian Federation, the Ministry of Finance of the Russian Federation, as well as the Central Bank of the Russian Federation and Vnesheconombank as agents of the Ministry of Finance of Russia. These bodies determine the general conditions for the issuance of individual loans, the procedure for the issue and circulation of debt obligations, the time of issue of the next loan and the conditions for its operation, organize the initial placement and the secondary market of government securities, organize and carry out the payment of income and repayment of debt obligations, the provision of government loans and government guarantees, control actions and other measures for the operational management of the public debt.
Similar issues within the framework of their competence are resolved by the executive bodies of state power of the constituent entities of the Russian Federation and local authorities. In doing so, they proceed from the norms of federal legislation.
In the management of state and municipal debt, six stages of management can be distinguished, at each of which specific tasks are solved.
On the first stage the process of substantiating the maximum volumes of internal and external debt, maximum volumes of internal and external borrowing, maximum volumes of guarantees is underway, and programs for internal and external borrowing are being formed. It is at this stage that the size of the future total debt burden is laid, including separately for internal and external debt, and the types of upcoming borrowings.
On the second stage a program for the issue of government and municipal securities is being formed and specific parameters of upcoming borrowings are determined by maturity, level of probable yield, income payment procedure, restrictions on owners, placement procedure and other conditions that make each borrowing attractive for resident and non-resident investors. The quality of work performed at this stage determines, in particular, the presence or absence in the future of "peaks" of debt payments, as well as the timely receipt of resources to repay previously made borrowings in the order of their refinancing.
On the third stage placement of bonds and regulation of quotations for state and municipal debt obligations in the secondary debt market. The impact on quotations for government and municipal bonds allows you to regulate the budgetary efficiency of borrowings and the amount of current (internal and external) debt.
Stage four associated with the implementation of measures, the need for which is determined by the presence of problem debts or crisis debt situations characteristic of the period of development of the Russian Federation after the collapse of the USSR. If the government is unable to service and pay off its debts, then it enters into negotiations with creditors to revise the payment schedules and the timing of debt repayment. As a result of negotiations, the parties may come to an agreement on deferred payments, debt restructuring, partial or complete cancellation of debt, early redemption of obligations, securitization, etc.
Fifth stage involves the execution of the original or adjusted schedules of payments for servicing and repayment of state and municipal internal and external debts.
Sixth stage - control over the validity of state and municipal borrowings, attraction of resources on the most favorable terms for the country and the efficiency of the use of borrowed funds.
Thus, under state and municipal debt management one should understand the totality of measures to regulate its volume and structure, determine the conditions and make new borrowings, regulate the borrowing market, implement measures for managing bad debts, servicing and repaying debt, providing state and municipal guarantees, monitoring the effective use of borrowed funds.
The question of efficiency of state and municipal debt management, which is understood as the degree of achievement of the main parameters of debt (its size, structure, cost of service, etc.) and the ability of the authorities to keep them at the level most favorable for the formation of macroeconomic conditions that stimulate the acceleration of the country's development and the growth of the well-being of its citizens.
There is no and, apparently, there cannot be a single indicator that measures the efficiency of state and municipal debt management, since in carrying out this activity, the authorities have a direct impact on the most diverse areas of public life. For example, there are no methods for assessing the impact of debt on the budget and money circulation of the country, the investment process, the degree of public confidence in the financial activities of the state, etc.
However, certain aspects of the effectiveness of debt management can be measured. In particular, the scale of resource mobilization to finance the budget deficit is evidenced by the annual revenues from the implementation of state and municipal borrowing. A more complete picture of the efficiency of debt activity is given by the ratio of the amount of excess of receipts over the costs of attracting state and municipal borrowings to the amount of expenditure, expressed as a percentage.
The most common indicator of the debt burden is the ratio of public debt to GDP, expressed as a percentage. The same indicator, if a more in-depth analysis is required, is calculated separately for internal and external debt.
The ratio of payments on repayment and servicing of public debt to GDP, to federal budget revenues or expenditures, expressed as a percentage, is also important for characterizing the debt burden. These indicators, if necessary, are calculated separately for internal and external debt.
The ratio of its servicing is determined by the external public debt. It is the ratio of all payments on external debt to the country's foreign exchange earnings from the export of goods and non-factor services, expressed as a percentage. The critical level of external debt servicing is considered to be the achievement of a ratio of 25%.
Management methods state and municipal debt can be conditionally divided into administrative and market. Methods typical mainly for administrative debt management approaches include, in particular, conversion, consolidation, unification, deferral of repayment, debt cancellation, debt cancellation, etc. The management methods characteristic of market Debt regulation models include, first of all, restructuring, additional bond placement, debt redemption, securitization, debt swaps, etc.
A characteristic point for the administrative approach to debt management is the unilateral adoption of a management decision by the issuer (without obtaining the prior consent of creditors), and for the market model of debt management - the negotiation process that precedes the adoption of a management decision and during which the positions of the debtor and creditors are coordinated; or the issuer unilaterally influences the government's debt market, and creditors voluntarily (guided by their own interests) decide whether to accept the new conditions proposed by the issuer.
The short-term nature of Russian debts and the high cost of borrowing at the turn of the 20th and 21st centuries forced the state to constantly worry about lengthening the terms and reducing the profitability of new borrowings. This is achieved, in particular, based on debt restructuring, which is understood to mean the termination of debt obligations, which constitute a state or municipal debt, based on an agreement, with their replacement by other debt obligations that provide for other conditions of service and repayment of obligations.
In contrast to debt restructuring carried out by the authorities on a market and voluntary basis, during the period of the administrative-command system of economic management, the increase in terms and the reduction of the cost of public debt was achieved through conversions and consolidations. They were compulsory for creditors. Under conversion was understood the change in profitability, and under consolidation - an increase in the terms of functioning of issued loans. By decision of the government authorities, debt conversion and consolidation could be combined with unification loans, which meant the combination of several previously issued loans into one new one. In this case, bonds of unified loans were exchanged for newly issued bonds, and the yield and maturity of the new loan changed in the direction necessary for the state.
In the field of external borrowing, debt restructuring is also carried out on a contractual basis. Here, restructuring is understood as a change in the schedule of repayment of the principal debt and payment of interest on it. Restructuring of external and internal debt can be carried out with partial writing off (reduction) of the principal amount.
In the context of limited funds of budgets of all levels, the issues of finding a source for conducting current and future payments for servicing and repaying internal and external debts are still acute. The main method of obtaining funds to repay loans is refinancing debt, which is understood to mean the repayment of accumulated debt by placing new loans. If it is impossible to refinance the debt, budget revenues are sent to repay it.
Repayment of loans carried out by redemption (early redemption is possible) of bonds from investors, drawing draws of winnings on winning loans, conducting draws of repayment on winning and interest-bearing loans, amortization
debt (debt repayment in installments).
Payment of income is carried out when discount bonds are redeemed from investors in the form of the difference between the redemption price and the placement price of the loan, by quarterly (semi-annual or annual) payment of coupons or payment of winnings on bonds that have entered circulation.
In addition to these methods of managing state and municipal debt, it is possible regressive bond exchange (several previously issued loan bonds are equal to one new one), deferral of loan repayment, cancellation of public debt.
Countries with market economies do not normally use these methods of debt management, since their use leads to irreparable damage to the reputation of the state as a borrower. In the history of public debt, their implementation was observed only in conditions of war, post-war economic recovery, or severe fiscal crises.
The difficulties of many countries with the repayment of external debt have given rise to new methods of covering obligations to the creditor countries. Among them are the repayment of debt by commodity deliveries, the exchange of debt obligations for shares and bonds of companies of the debtor country, payment of the debt in local currency with its subsequent conversion into investments or property, exchange for debt obligations of third countries, etc. These methods of managing public external debt are usually combine into the concept " external debt conversion", Which in this case means the implementation of all mechanisms that ensure the replacement of external debt with other types of obligations, less burdensome for the economy of the debtor country.
Of great importance for increasing the efficiency of public debt activities will be the creation of a unified system of government debt management of the Russian Federation... It will ensure the implementation of a centralized and long-term policy for managing liabilities and government borrowings, preventing possible debt crises and taking prompt measures to overcome them. The organic interaction of the management of internal and external debt, ensuring their unhindered mutual substitution on the basis of a single debt policy, the unity of planning and accounting for all operations to attract, service and repay external and internal government borrowings will allow:
Optimize the terms of circulation, maturity and the level of profitability of government securities;
To minimize the adverse impact of fluctuations in foreign exchange rates and interest rates in international financial markets on the amount and cost of government borrowing;
Optimize budget expenditures for servicing public debt;
To fulfill obligations to internal and external creditors in a timely manner and in full.
Optimization of the structure of public debt based on the creation of an effective management system will strengthen creditors' confidence in Russia as a reliable borrower, ensure full and profitable participation of the state in the domestic financial market and efficient entry into the foreign borrowing market in the near future, create more favorable conditions for implementing the debt optimization policy. load on the country's economy.
(Materials are given on the basis of: A.G. Gryaznov. E.V. Markina Finance. Textbook. 2nd ed. - M.: Finance and statistics, 2012)
Is a system of financial measures carried out by the state with the aim of repaying loans, as well as paying income on these loans, changing the terms and conditions of issued loans, and issuing regular debt obligations. This is one of the priority directions of the state financial policy.
Decisions on the choice of methods of public debt management are mainly influenced by the following factors: the share of expenditures on servicing the public debt in the total amount of budget expenditure items and the percentage of GDP and the amount of government borrowings.
When assessing the external public debt, the indicators of the ratio of the amount of external borrowings and the volume of exports and the share of expenses going to repay the external public debt to the amount of export earnings are used.
Public debt management Is a continuous process in which three stages are sequentially distinguished: 1 - placement of securities in order to attract financial resources, 2 - repayment of the public debt, 3 - servicing the public debt.
The state debt is repaid at the expense of budget funds, gold and foreign exchange reserves, money received from the sale of state property, as well as with the help of new borrowings.
Public debt management includes two large method groups: financial and administrative.
Financial Methods are in the choice of the forms and methods by which the state will repay the national debt, taking into account financial indicators. They aim to maximize the efficiency of borrowing and find ways to keep the cost of repaying them to a minimum.
Administrative methods are based on the quick implementation of orders of state authorities. Their functions do not include assessing the effectiveness and efficiency of actions related to public debt management.
The main measures that the state resorts to in managing the public debt are reduced to the following measures.
In the face of growing debts and budget deficits, the country has the right to resort to such measures as refinancing of public debt - issue of new loans to pay off old debt.
Conversion - this is a change in the profitability of existing loans by the state. As a rule, the government resorts to reducing the size of loan payments in percentage terms in order to reduce the costs incurred in managing the public debt.
Consolidation - implies amending the terms of loans related to their terms. Their change usually occurs in the direction of increase.
Loan unification - consolidation into one of several existing loans. In this case, previously issued bonds are exchanged for new ones. Unification is often carried out together with consolidation.
Cancellation of public debt - a radical measure in which the state refuses all obligations associated with the issued loan.
Public Debt Management in Russia in recent years, it has been characterized by a gradual decrease in the relative and absolute indicators of public debt. The percentage ratio of debt to GDP at par is decreasing.
Public debt management is carried outRF government, within the framework of the powers vested in him, which are established by the Federal Assembly of the Russian Federation.
It consists in shaping the policy pursued in relation to the public debt, setting the boundaries of debt, determining the goals and directions of influence on the indicators of the micro and macro levels, establishing the feasibility of financing the public debt through national programs. All this is implemented through a system of measures that are related to the issue of debt obligations and its further servicing. This requires a comprehensive approach from the state authorities and determines the multifaceted nature of the regulation of the emerging debt.
Issues related to public debt management are among the most important in Russia's economic policy. And this is due to the fact that in recent years there has been an increase in public debt, as well as the cost of repayment. Hence the main goal of management: to reduce debt and reduce the cost of repayment. But everything is not as simple as it might seem at first glance. The management of domestic public debt, as well as external, has features that are associated with the nature of relations with creditors, debt settlement, ongoing servicing and with limitations in the choice of methods of debt settlement. In this regard, it is worth taking a closer look at what methods of public debt management are.
Public Debt Management Techniques
· Refinancing - repayment of part of the principal (or all of it), as well as interest on it from those funds that were received from the placement of new loans.
· Cancellation (default) - the government's refusal to pay the debt and its interest on previously issued loans.
· Conversion - making a decision by the government to change the profitability of previously issued loans. To achieve this, the government usually reduces the amount of interest payments.
· Novation - agreements between the borrower and the lender on the termination of obligations, as well as their replacement with other obligations that provide for other terms of debt repayment.
· Unification - a decision by the state to combine several previously issued loans, when there is an exchange of bonds of previously issued loans for bonds of new loans.
· Consolidation - extension of the validity period for previously issued obligations. The state is always interested in obtaining loans for longer periods.
· Deferral of loan repayment (or all loans issued in advance) - is carried out in the event that the further issue of new loans does not bring financial activity to the state.
Public debt management techniques such as conversion, unification and consolidation of government hiring are most often carried out in relation to domestic borrowing. As for the postponement of loan repayment, a similar measure can be applied to external loans.
Principles of public debt management
Public debt management practices have been created to address the following challenges:
· To keep the volume of internal and external public debt at the same level. This is necessary in order to preserve the economic security of the country, as well as to ensure that the authorities fulfill the obligations they have assumed, while not causing significant damage to the financing of socio-economic development.
· Minimize the cost of debt by lengthening the debt term and reducing the yield of government securities.
· Maintain the stability and predictability of public debt.
· To achieve the most effective and efficient use of borrowed funds.
· Coordinate the actions of the bodies of the constituent entities of the Russian Federation, local self-government and federal bodies in the country's debt market.
· Diversify debt obligations in terms of borrowing terms, forms of payment and other parameters in order to meet the needs of investors.
The main problems of public debt management
· The debt problem has not yet been fully resolved. In particular, this concerns the obligations of the Russian Federation under the state guarantees presented by it.
· The normative regulation of the public debt needs improvement.
· There is no legislatively enshrined norms for determining the volume of public external debt that meet international standards.
9. Public debt management
National debt is divided into principal and current, depending on the maturity date.
Public debt is the entire amount of issued, but not repaid, government loans with interest accrued on them for a specific date or for a specific period.
The national debt is divided:
1. Internal and external.
2. Main and current.
State domestic debt RF means a debt obligation of the Government of the RF, expressed in the country's currency, to legal entities and individuals. The forms of debt obligations are loans received by the Government of the Russian Federation, government loans made by issuing securities on its behalf, and other debt obligations guaranteed by the Government of the Russian Federation.
State external debt - This is a debt in foreign currency on outstanding foreign loans and unpaid interest on them.
The main debt is the entire amount of the state's debt, for which the due date has not come and which cannot be presented for payment during a given period.
The current public debt is the debt of the state for obligations for which the due date has come.
World experience shows that the national debt should not exceed half of the country's GDP. The significant size of the public debt reflects the crisis state of the Russian economy.
The federal debt does not include debt obligations of the national-state and administrative-territorial entities of the Russian Federation, i.e. municipal loans, if they are not guaranteed by the Government of the Russian Federation.
Servicing the public debt is expressed in the implementation of operations for the placement of debt obligations, their repayment and payment of interest on them. These functions are performed by the Central Bank of the Russian Federation.
Public debt management is understood as a set of financial measures of the state associated with the establishment of annual limit values \u200b\u200bof the public debt, the issuance and repayment of loans, the organization of the payment of income on them, the conversion and consolidation of loans.
The payment of income from loans and their repayment is one of the main items of budget expenditures. The government is forced to resort to rolling over loans and other obligations (lengthening maturities) or converting (reducing the amount of interest paid on loans).
The main methods of financing public debt are monetary emission and issuance of government loans.
There are different criteria for assessing external debt. For example, they compare the amount of debt and the need to repay it and pay% with the amount of exports. The border of danger is considered to be an excess of the amount of debt in comparison with exports by 2 times, increased danger - 3 times.
At present, the country is unable to fully service its external debt. Required:
q organization of practical work on the return of interstate debts, because Russia continues to be the world's largest creditor;
q it is necessary to abandon international financial loans to cover the current budget needs, and direct them to the implementation of targeted federal programs related to the revival of production.
The public debt management methods are:
Conversion;
Consolidation;
Unification;
Exchange of bonds on a regressive basis;
Deferral of repayment;
Restructuring;
Cancellations.
Conversion is the change in the yield on loans. It is carried out in the event of a change in the situation in the financial market (for example, the level of the central bank's discount rate) or the deterioration of the financial situation of the state, when it is unable to pay the stipulated income.
Consolidation - this is the transfer of obligations on a previously issued loan to a new loan for the purpose of extending the term of the loan. It is carried out in the form of exchanging the bonds of the previous loan for new ones. In some cases, a reduction in loan terms may be applied.
Loan unification - this is the combination of several loans into one, when bonds of several previously issued loans are exchanged for bonds of a new loan. It simplifies the management of public debt. Unification can be carried out both separately and together with consolidation.
Regression exchange Bonds from previous loans to new ones are held with the aim of reducing government debt. This is undesirable since it represents a partial refusal by the state of its debts.
Postponement repayment is the postponement of the due date. At the same time, no income is paid for the period of postponement of debt repayment.
Restructuring - this is an application in combination, in whole or in part, of the above methods.
Cancellation debt means a complete refusal of the state from its debt. However, this option is considered invalid. The credibility of the state depends on recognizing its debts and ensuring their full repayment within the specified time frame.
Management of the state internal debt of Ukraine is carried out by the Ministry of Finance of Ukraine in the manner agreed with the National Bank of Ukraine.
The placement of debt obligations of the Government of Ukraine and the provision of guarantees on its behalf is carried out on its behalf by the Ministry of Finance of Ukraine.
The maximum size of the state internal debt of Ukraine, its structure, sources and maturity dates are established by the Verkhovna Rada of Ukraine simultaneously with the approval of the state budget of Ukraine for the next year.
Public debt are debt obligations of the Russian Federation to individuals and legal entities, foreign states and international organizations.
External debt - these are liabilities to non-residents in foreign currency.
Domestic debt - liabilities to residents in rubles.
The state debt is secured in federal ownership.
Debt obligations of the Russian Federation exist in the form:
credit agreements signed on behalf of the Russian Federation with credit institutions, foreign states and international financial organizations;
government securities;
agreements on the provision of state guarantees;
re-registration of debt obligations of third parties into public debt.
Public debt can be short-term (up to one year), medium term (from one to five years) and long-term (from five to thirty years old).
The public debt is repaid within the terms established by the terms of the loans, but these loans cannot exceed 30 years.
Public debt management is carried out by the Russian government.
The Russian Federation is not responsible for debt obligations of the constituent entities of the Russian Federation and municipalities, if they were not guaranteed by the federal government.
Maximum volumes of state internal and external debt is determined by the law on the federal budget for the next year. In accordance with Article 106 of the Budget Code of the Russian Federation, the maximum volume of government external borrowings should not exceed the annual volume of payments for servicing and repayment of the government's external debt.
The Law on the Federal Budget for the next financial year approves the Program of State External Borrowings. This program is a list of external borrowings of the federal budget for the next financial year, indicating the purpose, sources, repayment periods and total borrowings. It specifies all loans and government guarantees that exceed the equivalent of $ 10 million.
The decision to issue government securities is taken by the government, respectively, in accordance with the maximum budget deficit and public debt established in accordance with the budget law, as well as with the Internal Borrowing Program.
The decision on the issue of government securities shall reflect the information on the issuer of the securities, the volume and conditions of the issue.
State guarantee is a way of securing legal obligations, by virtue of which the Russian Federation, as a guarantor, gives a written obligation to be responsible for the performance of the person who received the guarantee of his obligations to third parties.
The law on the federal budget for the next year determines the maximum amount of state guarantees. The total amount of government guarantees denominated in rubles is included in government internal debt.
The total amount of government guarantees denominated in foreign currency is included in government external debt.
In accordance with Article 118 of the Budget Code of the Russian Federation, budgetary institutions are not allowed to take loans from credit institutions. But they have the right to receive loans from budgets and state extra-budgetary funds. The register of debts of state unitary enterprises is maintained by the Treasury.
State books of the internal and external debt of the Russian Federation are maintained by the Ministry of Finance of the Russian Federation.
IN State debt book information is entered on the volume of debt obligations of the Russian Federation, constituent entities of the Federation and municipalities on issued securities.
Information on borrowings shall be entered by the issuer into the State Debt Book of the Russian Federation within a period not exceeding three days from the moment the corresponding obligation arises.
To reduce the debt burden, debt restructuring... It means the repayment of old debt obligations with the simultaneous implementation of new borrowings in the amount of debt obligations to be repaid and with the establishment of new conditions for servicing the debt.
The following public debt management tools are also used:
consolidation - combining several loans into one more long-term one with a change in the interest rate;
government loan conversion - change in the original loan terms related to profitability. Most often, during conversion, the government lowers the interest rate;
external debt conversion - a means of reducing external debt by fulfilling debt obligations to creditors by transferring bills of exchange and shares to them in national currency;
innovation - replacement of the initial obligation between the parties with another obligation between the same parties, providing for a different way of performance.
In 1985, the external debt of the USSR was $ 22.5 billion, in 1991 - $ 65.0 billion.Russia's external debt, including the debt of the USSR, amounted to $ 124.5 billion as of January 1, 2003. For its full repayment within 30 years, at least $ 300 billion will have to be paid along with interest payments.
Table 6 Dynamics of the public external debt of the Russian Federation (billions of US dollars)
Name |
At 1.01. 1998 |
At 1.01. 1999 |
At 1.01. 2000 |
At 1.01. 2001 |
At 1.01. 2002 |
At 1.01. 2003 |
External debt of the Russian Federation, including the obligations of the USSR Including: | ||||||
on loans from foreign governments | ||||||
on loans from foreign banks and firms | ||||||
on loans from international financial organizations | ||||||
government securities of the Russian Federation in foreign currency | ||||||
on loans from the Central Bank of the Russian Federation | ||||||
guarantees and reserves for changes in interest rates and foreign exchange rates |
In order to ensure its foreign policy and foreign economic interests, Russia provides loans to foreign states. The program for providing such loans is approved by the law on the federal budget for the next year. This program consists of a list of loans indicating the purpose of their provision, recipients and amount. Agreements on debt restructuring or cancellation of foreign debt to the Russian Federation must be ratified by the State Duma.
public credit debt
In terms of its economic content, state credit is inseparable from state debt. The consequence of government credit is the growth of government debt. The existence of public debt also implies the need to manage it. Public debt management is understood as the totality of actions of the state represented by its authorized bodies to regulate the size, structure and cost of servicing public debt.
The state debt is the debt obligations of the Russian Federation to individuals and legal entities, foreign states and international organizations.
External debt is liabilities to non-residents in foreign currency.
Domestic debt - liabilities to residents in rubles.
The state debt is secured in federal ownership.
Debt obligations of the Russian Federation exist in the form:
credit agreements signed on behalf of the Russian Federation with credit institutions, foreign states and international financial organizations;
government securities;
agreements on the provision of state guarantees;
re-registration of debt obligations of third parties into public debt.
The procedure, conditions for the issue (issue) and placement of debt obligations of the Russian Federation are determined by the Government of the Russian Federation. This activity is called: public debt management.
Public debt management is based on the following principles:
- - unconditional - ensuring accurate and timely fulfillment of the state's obligations to investors and creditors without setting additional conditions;
- -unity of accounting and accounting in the process of government debt management of all types of securities issued by federal authorities, authorities of the constituent entities of the Russian Federation and local governments;
- -unity of debt policy-ensuring a unified approach in the policy of public debt management by the federal center in relation to the constituent entities of the Russian Federation and municipalities:
- - consistency - ensuring the maximum possible harmonization of interests of creditors and the borrowing state;
- - risk reduction - implementation of all necessary actions to reduce the risks of both the lender and the investor;
- -optimality - the creation of such a structure of government loans so that the fulfillment of obligations on them is associated with minimal costs and minimal risk, and also has the least negative impact on the country's economy;
- - publicity - provision of reliable information about the parameters of loans to all users interested in it.
The main methods of public debt management include:
Refinancing - repayment of old government debt by issuing new loans.
Conversion is a change in the rate of return on a loan, for example, a decrease or increase in the interest rate of income paid by the government to its lenders.
Consolidation - extension of the term of already issued loans.
Unification - consolidation of several loans into one.
The deferral of loan repayment is carried out in conditions when further active development of operations for issuing new loans is not effective for the state.
Debt cancellation - government refusal from debt obligations.
Debt restructuring - repayment of debt obligations with simultaneous borrowing (assuming other debt obligations) in the amount of debt obligations to be repaid with the establishment of other conditions for servicing debt obligations and the timing of their repayment. The Budget Code of the Russian Federation states that debt restructuring can be carried out with a partial write-off (reduction) of the principal amount.
Public debt can be short-term (up to one year), medium-term (from one year to five years) and long-term (from five to thirty years).
The public debt is repaid within the terms established by the terms of the loans, but these loans cannot exceed 30 years.
Public debt is managed by the Russian government.
The Russian Federation is not responsible for debt obligations of the constituent entities of the Russian Federation and municipalities, if they were not guaranteed by the federal government.
The maximum volumes of the state internal and external debt are determined by the law on the federal budget for the next year. In accordance with Article 106 of the Budget Code of the Russian Federation, the maximum volume of government external borrowings should not exceed the annual volume of payments for servicing and repayment of the government's external debt.
The Law on the Federal Budget for the next financial year approves the Program of State External Borrowings. This program is a list of external borrowings of the federal budget for the next financial year, indicating the purpose, sources, repayment periods and total borrowings. It specifies all loans and government guarantees that exceed the equivalent of $ 10 million.
The decision to issue government securities is taken by the government, respectively, in accordance with the maximum budget deficit and public debt established in accordance with the budget law, as well as with the Internal Borrowing Program.
The decision on the issue of government securities shall reflect the information on the issuer of the securities, the volume and conditions of the issue.
A state guarantee is a method of securing legal obligations, by virtue of which the Russian Federation, as a guarantor, gives a written obligation to be responsible for the performance by the person who received the guarantee of his obligations to third parties.
The law on the federal budget for the next year determines the maximum amount of state guarantees. The total amount of government guarantees denominated in rubles is included in government internal debt.
The total amount of government guarantees denominated in foreign currency is included in government external debt.
Budgetary institutions are not allowed to take loans from credit institutions. But they have the right to receive loans from budgets and state extra-budgetary funds. The register of debts of state unitary enterprises is maintained by the Treasury.
State books of the internal and external debt of the Russian Federation are maintained by the Ministry of Finance of the Russian Federation.
Information on the volume of debt obligations of the Russian Federation, constituent entities of the Federation and municipalities on issued securities is entered into the State Debt Book.
Information on borrowings shall be entered by the issuer into the State Debt Book of the Russian Federation within a period not exceeding three days from the moment the corresponding obligation arises.
Debt restructuring can be applied to reduce the debt burden. It means the repayment of old debt obligations with the simultaneous implementation of new borrowings in the amount of debt obligations to be repaid and with the establishment of new conditions for servicing the debt.
The volume of the state internal debt of the Russian Federation includes:
principal nominal amount of debt on government securities of the Russian Federation;
the amount of the principal debt on loans received by the Russian Federation;
the amount of the principal debt on budget loans and budget loans received by the Russian Federation from budgets of other levels;
the amount of obligations under state guarantees provided by the Russian Federation.
The volume of the state external debt of the Russian Federation includes:
the amount of obligations under state guarantees provided by the Russian Federation;
the amount of the principal debt on loans received by the Russian Federation from foreign governments, credit institutions, firms and international financial organizations.
The public debt management cycle includes 3 stages: attraction, placement and repayment.
Debt management can be based both on direct government administration and on indirect methods, including the issuance of government guarantees and regulatory and administrative regulation of the attraction of unsecured loans by private firms. Direct government management of raised debt is carried out in the context of the budgetary process, which determines the limits of government borrowing and government guarantees for the current fiscal year. It should be emphasized that the policy pursued in Russia is oriented towards significant external borrowing.
Public debt management is characterized as a key active element in the debt management system. There are 3 possible ways to use the resources involved:
- - financial placement, when investment projects and economic development are financed from an external source. This method is the most progressive type of use of external debt. At the same time, it is extremely important to select competitive highly effective investment projects that would ensure the return of the resources received;
- - budgetary use, in which attracted resources are directed to finance current budget expenditures, including servicing external debt. This method of using resources attracted from the international market is the least effective of the existing ones;
- - mixed budget and financial allocation, when borrowings are used both to finance current budgetary needs and to develop the economy as a whole. In Russian practice, the least effective method has become widespread - new borrowings are directed to finance current budget expenditures, including ensuring the existing external debt.
Government debt repayment management. Debt repayment is made from three main sources: from the budget; at the expense of gold and foreign exchange reserves, property; from new borrowings. In Russian practice, new borrowings play an essential role in debt servicing. Gold and foreign exchange reserves were used to pay off debt only during the period of the debt crisis in 1991-92. It should be noted that the methods of debt repayment widely used in international practice by converting it into shares of enterprises in our country have practically not been used.