COURSE WORK

on the topic: “Managing the public debt of the Russian Federation”

Introduction

This course work examines both the theoretical aspects of public debt management, as well as the analysis and management of public debt in the Russian Federation at the present stage.

The relevance of the work lies in the problem of debt dependence of the state and, above all, to foreign creditors, which has always been of current importance, since the full realization of the sovereignty of the state is possible only with a certain economic independence.

Government debt and its growth greatly influence the functioning of the economy. In this regard, two dangers are seen: the possibility of bankruptcy of the nation and the danger of shifting the debt burden to future generations. Currently, public debt occupies a special place among the painful problems of modern Russian budget policy.

Public debt is one of the macroeconomic parameters, an object and instrument of the state’s economic policy. The existence of debt can have both positive and negative effects on the real, financial and other sectors, depending on the direction of government spending, the phase of the business cycle, and the level of economic development. The positive impact of debt is in providing the government with financial resources and stimulating economic growth. Negative consequences are reflected in the crowding out effect and the transfer of burden to future generations.

Public debt management is the development and implementation of a strategy aimed at attracting the necessary amounts of financing, achieving the desired debt parameters in terms of risk and cost of servicing and other goals, in particular, creating an effective domestic debt market.

At the present stage, in all countries, the size of public debt is continuously increasing due to the chronic deficit of state budgets and the growth of military expenditures.

The object of study is public debt. The subject of the study is the process of public debt management.

Job objectives:

1. define the concept and essence of public debt;

2. consider the principles of public debt management;

3. analyze the process of managing public debt in Russia;

4. explore the strategy for managing public debt in a crisis.

1. Theoretical aspects of public debt

1.1 The essence and significance of public debt and government guarantees

In accordance with the Budget Code of the Russian Federation, “the public debt of the Russian Federation is the debt obligations of the Russian Federation to individuals, legal entities, foreign states, international organizations and other subjects of international law.”

The main forms of debt obligations of the Russian Federation: credit agreements and agreements, government securities, agreements on the provision of guarantees of the Russian Federation, agreements of guarantors of the Russian Federation, reissued debt obligations of third parties into the government debt of the Russian Federation, agreements and agreements of the Russian Federation on prolongation (extension) and restructuring of debt obligations.

In terms of time, short-term (up to 1 year), medium-term (up to 5 years) and long-term (up to 30 years) debt obligations are distinguished.

Reasons for the emergence of public debt: external and internal borrowings to finance the budget deficit; capitalization of interest on previously received loans; underfunding of obligations accepted by the state for execution.

As a rule, public debt increases during periods of active economic growth, since a developing economy requires additional investments. However, public debt is also growing in a stagnating economy, in which a decline in production necessitates the need to cover government costs using monetary methods.

The theory of public debt is inextricably linked with the theory of the public budget and uses a number of basic budget concepts that are fundamental when considering public debt.

The budget deficit is the excess of state budget expenditures over its revenues. Most governments in both developed and developing countries cannot cover their expenses with income, keeping the state budget in deficit. Therefore, the important question is about the acceptable size of the deficit, its impact on the economy in the short and long term, and how to finance it.

The most important task of the economic policy of states is to find an optimal solution to the problems of budget deficit and public debt. In the context of solving the identified problem, the following are of decisive importance:

· analysis of the causes, maintenance and reproduction of the budget deficit;

· analysis of the causes of public debt, its types, structure, etc.;

· methods of public debt management;

· analysis of the relationship and interdependence of the state deficit and public debt, identification of mechanisms for their harmonization and optimization in the context of macroeconomic development;

· analysis of the consequences of the state's budget and debt policies in the short, medium and long term;

· determination of the volumes of government deficit and public debt, which are critical for the further development of society.

One of the significant factors in the presence (increase) of public debt is the budget deficit. The increase in public debt, in turn, is a determining factor in the increase in the budget deficit due to the servicing and repayment of borrowed debts. That is, the government deficit and government debt are interdependent, which should be taken into account when modeling these indicators (the first indicator is a factor for the second, and the second at the same time for the first).

Government debt can have both negative and positive effects on economic development. Thus, during periods of economic downturns, government borrowing is a fairly effective way to mitigate the situation, which prevents a sharp drop in aggregate demand, having a stabilizing effect on the country’s economy. In addition, government loans are an additional supply of financial resources to the country, which can become the basis for future economic growth, especially if they are of an investment nature. External debt allows a country to incur more aggregate expenditure than national income generated and to finance investments that are not supported by domestic revenues. In this aspect, government borrowing has a positive impact on macroeconomic development.

The negative impact of government borrowing is reflected in the presence (increase) of the budget deficit, especially in volumes that are prohibitive for the development of a particular economy. Excessive volumes of the budget deficit mean in practice underfinancing of both the production and social spheres and are also associated with such negative macroeconomic phenomena as devaluation of the national currency, increasing the cost of loans and limiting their availability, destabilization of the economy and imbalance of economic proportions.

The main reasons for the budget deficit are:

· reduction of social production;

· issue of unsecured money;

· excessive costs for social programs;

· excessive volumes of accumulated public debts with unfavorable service conditions.

Forecasting the budget deficit and public debt cannot be carried out separately, in isolation from forecasting the macroeconomic development of the country as a whole, but only as a natural component of such development. In turn, overall macroeconomic development largely depends on the formation of budget revenues and expenditures (including the budget deficit), as well as the volume and characteristics of public debt.

From the point of view of credit relations, public debt is the amount of debt the state owes to all its creditors. Public debt is a characteristic of the effectiveness of all completed government credit operations. Its absolute value, dynamics and rate of change reflect the state of the country’s economy and finances, and the efficiency of the functioning of government structures. However, to reflect the real economic situation, relative values ​​are more often used, in particular, the ratio of public debt to GDP. There are various economic methods used by the government to balance the budget and regulate the business cycle. This policy is aimed at smoothing economic fluctuations and overcoming the negative consequences of recessions.

According to Article 115 of the Budget Code of the Russian Federation, a state guarantee is recognized as a method of securing civil obligations, by virtue of which, respectively, the Russian Federation, a subject of the Russian Federation or a municipal entity - the guarantor gives a written obligation to be responsible for the fulfillment by the person to whom the state guarantee is given of obligations to third parties in full or partially.

A written form of the state guarantee is mandatory. Failure to comply with the written form of the state guarantee entails its invalidity (nullity).

The state guarantee must indicate: information about the guarantor, including its name (Russian Federation, subject of the Russian Federation) and the name of the body that issued the guarantee on behalf of the specified guarantor; determining the scope of guarantee obligations.

The guarantee period is determined by the period of fulfillment of the obligations for which the guarantee is provided. Guarantees are provided on a competitive basis. The guarantor under a state guarantee bears subsidiary liability in addition to the liability of the debtor for the obligation guaranteed by him. The obligation of the guarantor to a third party provided for by the state guarantee is limited to payment of an amount corresponding to the volume of obligations under the guarantee. The guarantor, who has fulfilled the obligation of the recipient of the guarantee, has the right to demand from the latter compensation for the amounts paid to a third party under the state guarantee in full, in the manner prescribed by the civil legislation of the Russian Federation. Guarantees for obligations constituting the state external debt of the Russian Federation may provide for joint liability of the guarantor. Execution of government guarantees is subject to reflection in budget expenditures as the provision of loans.

The set of financial activities of the state and the central bank related to the repayment of loans, the organization of payment of income on them, the conversion of government loans and consolidation of loans, etc. placement of new debt obligations. Refinancing, i.e. new loans to cover previously issued debt obligations, usually used when there are insufficient funds from the centralized monetary fund (budget). Loan conversion is expressed as a change in the loan yield. A change in profitability can consist of either a decrease or an increase in the interest rate of income paid by the government to its creditors. The state has the right to reduce or increase the maturity of debt obligations. The functions of the state to change the terms of previously issued loans are called consolidation. State measures to unify loans mean several previously issued loans for one new one. Cancellation of state internal debt, i.e. a complete waiver of debt obligations is, as a rule, an extreme measure for managing internal debt. The adoption of such a measure is usually due to a change in political power. Thus, in 1918, the government of Soviet Russia decided to cancel the debts of the Russian Empire, incl. and internal.

Economics and law: dictionary-reference book. - M.: University and school. L. P. Kurakov, V. L. Kurakov, A. L. Kurakov. 2004 .

See what “GOVERNMENT DEBT MANAGEMENT” is in other dictionaries:

The immediate result of the increase in public debt is the expansion of the public debt management system. The enormous size of government debt makes it extremely difficult for the Treasury to issue new loans. The most... ... Wikipedia

The set of financial measures of the state: to repay loans; on organizing the payment of debts on them; to change the conditions and terms of previously issued loans; on the placement of new debt obligations. See also: National debt... ... Financial Dictionary

Legal dictionary

PUBLIC DEBT MANAGEMENT- control and regulation by the state of debt in terms of the level of interest rates, the procedure for repaying government securities, the terms and procedures for payments on loans (domestic, external, including state and corporate), etc... Large economic dictionary

public debt management- a set of financial measures by the state to repay loans, organize payments of income on them, change the conditions and terms of previously issued loans, as well as placement of new debt obligations. Such events include... ... Large legal dictionary

PUBLIC DEBT MANAGEMENT- (eng. national debt management) – 1) a set of government measures aimed at repaying the debt; 2) a mechanism for the formation and implementation of one of the directions of the state’s financial policy related to its activities in external and... ... Financial and credit encyclopedic dictionary

PUBLIC DEBT MANAGEMENT Legal encyclopedia

- (see PUBLIC DEBT MANAGEMENT) ... Encyclopedic Dictionary of Economics and Law

State and municipal debt management- this is the activity of the relevant bodies of state power and local self-government in the placement, servicing and repayment of state and municipal debt obligations. Debt management is carried out... ... Large legal dictionary

DEBT PUBLIC MANAGEMENT- PUBLIC DEBT MANAGEMENT… Legal encyclopedia

Books

• Finance and Credit No. 3 (579) 2014, Absent. The magazine reveals contemporary problems in the theory and practice of finance, money circulation and credit, banking and insurance, the securities market, tax policy and financial... eBook
• State debt. Analysis of the management system and assessment of its effectiveness, L. S. Braginskaya. The main elements of the public debt management system are presented. Its goals, objectives and methods influencing budget, exchange rate and monetary policy are analyzed...

The existence of public debt automatically implies the responsibility of the state 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 concept of public debt management can be considered in a broad and narrow sense.

Public debt management in a broad sense involves:

• a) Formation of policy regarding public debt;
• b) Determination of the main indicators and maximum values ​​of public debt;
• c) Establishing the main directions of influence on micro- and macroeconomic indicators;
• d) Identification of priority areas for the use of attracted resources, etc.

The definition of policy regarding public debt and its upper limit is established by the legislative authorities, and its operational management is carried out by the executive branch.

Public debt management in the narrow sense involves determining the conditions for the issue, circulation and redemption of specific government securities.

An even narrower interpretation of public debt management involves regulating the composition and structure of the total public debt while keeping its value constant. Within its framework, the objects of regulation are:

• a) structure of terms of circulation of various debt obligations;
• b) the structure of creditors (through the issuance of non-market loans intended for certain groups of creditors).

The goal of public debt management is to find the optimal balance between the state's needs for additional financial resources and the costs of attracting, servicing and repaying them.

The basis for public debt management is the following principles:

• 1) unconditionality - ensuring accurate and timely fulfillment of the state’s obligations to investors and creditors without imposing additional conditions;
• 2) unity of accounting - accounting in the process of managing public debt of all types of securities issued by federal authorities, authorities of constituent entities of the federation and local governments;
• 3) unity of debt policy - ensuring a unified approach in the policy of managing public debt on the part of the federal center in relation to the subjects of the federation and municipalities;
• 4) consistency - creating the maximum possible harmonization of the interests of creditors and the borrower state;
• 5) risk reduction - performing all necessary actions to reduce both the risks of the lender and the risks of the investor;
• 6) optimality - the 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) transparency - provision of reliable and timely information about the parameters of loans to all users interested in it.

Excessive growth of public debt poses a threat to the economic security of the country and the stability of the budget system.

In this regard, it should also be taken into account that the public debt management system, in its political and economic essence, should include:

• a) determining the purpose and validity of government borrowings;
• b) minimizing the cost of debt for the borrower;
• c) effective use, accounting and control over the expenditure of attracted resources;
• d) strengthening the investment nature of loans;
• e) ensuring timely repayment of received loans.

This involves the formation of a unified public debt management system, including accounting for loans from constituent entities of the Federation, external debt of banks and other corporate borrowings.

The ideal way to service and repay public debt is to timely repay the loan received and interest on it. However, the borrower's intentions do not always coincide with real possibilities. Certain difficulties may arise due to economic, social or political difficulties, as well as unforeseen circumstances in the form of disasters, disasters or instability in the state. There is a need to defer interest payments or pay the principal amount, change the terms of the loan, and sometimes completely refuse payments. A clear sign of a debt crisis is a serious violation of the payment schedule. The borrower state is forced to resort to various methods of debt regulation.

Public debt management is carried out using the following methods:

• a) refinancing;
• b) conversions;
• c) consolidation;
• d) innovations;
• e) unification;
• f) delays;
• g) securitization;
• h) cancellation.

Refinancing is the repayment of old debt (and interest on it) by issuing a new loan and accepting new obligations. There are three ways to refinance government debt:

• 1) replacement of obligations (with the consent of their holders) with expired repayment periods with new ones, equivalent in amount to those being repaid;
• 2) early replacement of some obligations with others with longer repayment periods;
• 3) placement (sale) of new bonds and, using the proceeds, repayment of expired bonds.

Conversion is the use of various mechanisms to ensure the replacement of public debt with other types of obligations that are less burdensome for the debtor’s economy. The most common types of conversion are the exchange of debt for shares (property), the exchange of debt for goods, the exchange of debt for environmental activities, the repurchase of debt by the borrower on special terms (with a discount), the conversion of debt into debt obligations of third countries, and others.

Consolidation is a revision of the terms of debt repayment, which can be implemented either by changing the terms of repayment of existing debt obligations (restructuring), or by refinancing existing debt. Restructuring is an agreement-based termination of debt obligations constituting state or municipal debt, with the replacement of these debt obligations with other debt obligations providing for other conditions for servicing and repaying obligations. In other words, restructuring is the preparation of a new debt payment schedule that is more favorable for the debtor than provided for in the original agreement. In this case, a grace period is usually provided when only interest is paid, and the term for repayment of the principal debt is also extended. Payments on short-term debts are postponed to a later date. Restructuring of external debt can be carried out with a partial write-off (reduction) of the principal amount. The basis for a creditor to write off debt obligations in whole or in part may be a very low probability, or rather, the practical absence of opportunities to repay debt obligations, due to a decrease in the value of real assets

Novation is an agreement between the borrower state and creditors to replace obligations under the same loan agreement.

Unification of loans is the combination of several loans into one, when bonds of previously issued loans are exchanged for bonds of a new loan. It can be done with or without consolidation and conversion.

Deferment of loan repayment is that, as with consolidation, the loan repayment period is unilaterally postponed and, in addition, the payment of income is stopped.

Securitization is the conversion of non-marketable loans into securities that are freely tradable on financial markets.

Cancellation is a waiver of all obligations under previously issued loans. But the use of this method leads to irreparable damage to the state’s reputation as a borrower among potential investors and lenders.

Public debt management is a continuous process involving 3 stages. At the 1st stage, the maximum amounts of government borrowing and guarantees for the next budget year are determined, tools for attracting resources and increasing the efficiency of their use are selected. At the 2nd stage, resources are attracted in external or internal financial markets by: issuing and placing government securities, obtaining a loan or providing government guarantees, and then these funds are used to finance current budget expenditures or investment projects. The 3rd stage is to search for sources of financial resources to repay and service public debt, reduce overall costs, and timely fulfill debt obligations. Government debt obligations are repaid from budget revenues, the country's gold and foreign exchange reserves, funds received from the sale of state property, as well as new borrowings.

External debt management is one of the elements of the state's macroeconomic policy. On the one hand, the effective use of external debt can become a powerful factor in economic growth, allowing one to attract additional financial resources. The country’s stable position in the international capital market and timely fulfillment of debt obligations help strengthen its international authority and provide an additional influx of investment on more favorable terms. In addition, confidence in its currency increases and foreign trade relations are strengthened. On the other hand, an external debt crisis can become a serious negative factor of not only economic but also political significance.

Public debt are debt obligations of the Russian Federation to individuals and legal entities, foreign states and international organizations.

• External debt— these are obligations to non-residents in foreign currency.
• Domestic debt— obligations to residents in rubles.

The national debt is secured by federal ownership.

Debt obligations of the Russian Federation exist in the form of:

• credit agreements signed on behalf of the Russian Federation with credit organizations, 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 national debt may 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 management is carried out by the Government of the Russian Federation.

The Russian Federation is not responsible for the debt obligations of the constituent entities of the Russian Federation and municipalities if they were not guaranteed by the federal government.

Maximum volumes of government internal and external debts are determined by the law on the federal budget for another 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 repaying government 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 from the federal budget for the next financial year, indicating the purpose, sources, repayment deadlines and the total volume of borrowings. It covers all loans and government guarantees that exceed the equivalent of $10 million.

The decision to issue government securities is taken by the government accordingly in accordance with the maximum volumes of the budget deficit and public debt established in accordance with the budget law, as well as the Domestic Borrowing Program.

The decision on the issue of government securities reflects information about the issuer of the securities, the volume and conditions of the issue.

State guarantee is a method of ensuring legal obligations, by virtue of which the Russian Federation, as a guarantor, gives a written obligation to be responsible for the fulfillment by the person receiving 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 expressed in rubles is included in the government internal debt.

The total amount of government guarantees denominated in foreign currency is included in the government external debt.

In accordance with Article 118 of the Budget Code of the Russian Federation, budgetary institutions do not have the right to take loans from credit organizations. But they have the right to receive loans from budgets and state extra-budgetary funds. The register of debt of state unitary enterprises is maintained by the Treasury.

State books of 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 for issued securities.

Information on borrowings is 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.

Can be used to reduce debt burden debt restructuring. It means the repayment of previous debt obligations with the simultaneous implementation of new borrowings in the amount of repaid debt obligations and the establishment of new conditions for debt servicing.

The following public debt management tools are also used:

• consolidation- combining several loans into one longer-term loan with a change in the interest rate;
• government loan conversion— change in the initial terms of the loan regarding profitability. Most often, during the conversion, the government reduces the interest rate;
• external debt conversion— a means of reducing external debt by fulfilling debt obligations to creditors by transferring to them bills and shares in national currency;
• innovation- replacement of the original obligation between the parties with another obligation between the same parties, providing for a different method of execution.

In 1985, the external debt of the USSR amounted to 22.5 billion dollars, in 1991 - 65.0 billion dollars. The external debt of Russia, including the debt of the USSR, amounted to 124.5 billion dollars as of January 1, 2003. To fully repay it within 30 years, along with interest payments, at least $300 billion will have to be paid.

Table 6 Dynamics of public external debt of the Russian Federation (billions of US dollars)

Name
External debt of the Russian Federation, including obligations of the USSR Including:
on loans from foreign governments
on loans from foreign banks and companies
for 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 exchange rates

In order to ensure its foreign policy and foreign economic interests, Russia provides loans to foreign countries. 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 write-off of debt of foreign states to the Russian Federation must be ratified by the State Duma.

Concept and structure of external financing and external debt

External financing of the state is a consequence of the objective need to attract additional sources to finance government spending and the state budget deficit when all possible sources of mobilizing monetary resources within the country have been exhausted.

External funding attracted by the state to finance its expenses and the state budget deficit when it is impossible to mobilize these funds within the country. In other words, international financing is used when public finances have high deficits and need to finance expenditures. External financing is attracted in two directions: state And private (according to sources)(Fig. 50).

Rice. 50. Structure of external financing by source

External financing also varies by form. It is carried out both in the form of free financing, and in the form of a return lending(Fig. 51).

Rice. 51. Structure of external financing and lending by form

International financing is structured and by timing(in terms of lending) for short-term (up to 1 year), medium-term (from 1 to 7 years) and long-term.

Public debt management

The system creates public debt system: internal and external

System debt service requires the creation of a system debt management.

The public debt system requires the creation of a debt management system. Servicing public debts, internal and external, includes in stages: repayment of interest; repayment of the capital amount of the debt and its refinancing if necessary.

If the conditional debt of the state is 100 thousand units. and it is presented at 20% per annum (the usual percentage on the international loan capital market for states - dubious borrowers) for 4 years with a one-year grace period (the period when only interest is repaid), and the amount of the debt is not repaid, then to the real amount of the debt (100 thousand units) you need to add 80 thousand units. percent (80% per annum multiplied by 4 years). Then the schedule for servicing such a debt will look like this (Fig. 52): 180 thousand. units in 4 years.

Rice. 52. State debt servicing schedule (with a period of 4 years at 20% per annum)

Thus, the simplest scheme for servicing public debt illustrates the sufficient complexity of managing it. Due to the high cost of public debts, the debt management system includes negotiations on changing the terms of debts, the mechanism of debt refinancing itself, and monitoring indicators of the volume and level of debt, and comparing them with other indicators of public finances (GDP, state budget, etc.).

Debt refinancing is a whole mechanism (another name is restructuring) (Fig. 53).

Public debt management is one of the main directions of state financial policy.

Debt refinancing is a system of measures to change the terms of loans: terms, volumes, cost (interest).

Rice. 53. Methods of refinancing public debt

Cancellation implies a complete cancellation of the debt (applies only in the event of complete bankruptcy of the state as a debtor).

Prolongation- This is an extension of debt terms and interest repayments.

Securitization is the resale of government bonds on the open market (stock exchange).

Capitalization— this is the restructuring of government bonds into private shares through their resale on the stock exchange.

Public debt and methods of public debt management

The government internal debt of the Russian Federation consists of debt from past years and newly arising debt. The state internal debt of the Russian Federation is secured by all assets at the disposal of the Government of the Russian Federation.

Debt obligations of the Russian Federation can be in the form of:

• loans received by the Government of the Russian Federation;
• government loans carried out through the issue of securities on behalf of the Government of the Russian Federation;
• other debt obligations guaranteed by the Government of the Russian Federation.

The procedure, conditions for issuing (issuing) and placing debt obligations of the Russian Federation are determined by the Government of the Russian Federation. This activity is called: public debt management.

The servicing of the state internal debt of the Russian Federation is carried out by the Central Bank of the Russian Federation and its institutions, unless otherwise established by the Government of the Russian Federation, and is carried out through operations for the placement of debt obligations of the Russian Federation, their repayment and the payment of income in the form of interest on them or in another form.

Control over the state of public debt is carried out by representative and executive bodies of state power.

Under government internal debt management refers to the totality of government measures to pay income to creditors and repay loans, as well as the procedure, conditions for issuing (issuing) and placing debt obligations of the Russian Federation.

To the main public debt management methods should include:

• Refinancing— repayment of old government debt by issuing new loans.
• Conversion- a change in the size of the loan's profitability, for example, a decrease or increase in the interest rate of income paid by the state to its creditors.
• Consolidation— increasing the validity period of already issued loans.
• Unification- combining several loans into one.
• Deferment of loan repayment is carried out in conditions where further active development of operations to issue new loans is not effective for the state.
• Debt cancellation— refusal of the state from debt obligations.
• Debt restructuring— repayment of debt obligations with the simultaneous implementation of borrowings (assuming other debt obligations) in the amount of repaid debt obligations 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.

In the course of a country's economic activities, debt arises because borrowed funds are often required to develop and promote economic activities. In order to correctly distribute funds and not bankrupt your state through 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 public debt as a financial instrument, then with its help the executive and legislative bodies of the country influence monetary circulation, investment policy, production and other areas. When considered as an object of state management. structures use it to establish the necessary provisions for successful functioning. Thanks to this, the government exercises control over 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:

1. External. This 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. If it takes about 20-30% of total foreign economic turnover, then the country becomes a debtor. New loans will not be available to her.
2. Interior. This includes all obligations not fulfilled to its own population (individuals and legal entities): non-payment of salaries, pensions, scholarships and benefits, etc.

Capital (the total amount of debt for all borrowings) and current (payments to creditors for loans that have already matured) are also distinguished.

Public debt can be formed both to the country and to an individual

Objectives of public debt management

In order for the efficiency of regulation of this value to be high, it is necessary to solve the assigned problems. These include:

1. Stabilization of the amount of debt at a level that will not threaten the economy and security of the country. Fulfillment of the conditions for obligations must be carried out without serious damage and underfunding of socio-economic programs.
2. Reducing the amount of funds borrowed to the optimal level. This is done by increasing the payment terms, increasing the price of securities, attracting new investors, etc.
3. Formation and maintenance of government authority and the status of a reliable borrower.
4. Carrying out activities so that the managed government debt market is predictable and stable.
5. Effective and strategically profitable use of credit funds.
6. Ensuring timely payments of obligations so that there are no delays and thus avoiding the occurrence of debt.
7. Expanding the types and forms of borrowing, distributing them according to directions, etc.
8. Monitoring the activities of government agencies providing administrative and management functions.

There are many more tasks that the state must perform, but these are the main ones.

Management process

This definition implies several functional components:

1. Planning. At the same time, all the pros and cons are weighed, the terms are calculated and discussed (terms, payment amounts, interest rate, etc.).
2. Service. At this stage, activities are carried out aimed at repaying the basis of the debt, interest, commissions, etc.
3. Control and tracking of the status of all loan obligations.

Like any debt, public debt must be competently managed

Public debt is managed through the management of its composition and structure (debt management). The essence of this process is the distribution of all debt items according to certain criteria. The objects it affects are:

1. The state of debts and their terms - by correctly distributing them, the state can partially or completely restructure its loan.
2. Credit structure (percentage and numerical ratio of internal and external, market liabilities, distribution by category, etc.).
3. The size of the total public debt.

An objective assessment of all circumstances and the correct system of action is the key to a successful credit policy.

By what principles should public debt be managed?

There are several principles on which this area should be regulated:

1. Unconditionality. It implies that the state that has assumed a debt obligation will certainly fulfill its terms.
2. Unity. In accordance with this, the government keeps records of all material loans, regardless of their type (municipal, federal, international, etc.).
3. Minimizing risks. This item includes activities aimed at reducing the burden of loans on the country's economy.
4. Optimality. The structure and management system, terms and conditions should be as convenient as possible.
5. Financial independence. Despite the onerous obligations, the sovereignty and freedom of action of the state are not limited.
6. Transparency. All terms and condition of the loan must be open to the public, rating structures and the media.

Compliance with these principles is imperative, otherwise a violation may cause termination of the contract. At the same time, debt management must include all these points.

Management is conducted in accordance with established principles

Management measures

There are quite a few methods, the use of which is necessary to regulate public debt. These include:

1. Refinancing is the repayment of debt in whole or in part using a new loan.
2. Restructuring is a mutual agreement of the parties to change the terms of the loan (terms, amounts of payments, etc.).
3. Conversion is an adjustment of the yield on an obligation (decrease or increase in interest, etc.).
4. Consolidation is an increase in the loan repayment period, which reduces the burden on the country’s budgetary capital.
5. Unification is the formation of several small loans into one large one.
6. Deferring repayment allows you not only to extend the loan, as with consolidation, but also to stop accruing interest.
7. Cancellation implies a complete waiver of the debt obligation. Applicable to the parties to the contract only in cases of extreme necessity (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 managing public debt in the Russian Federation violate the most important principle of unconditionality.

Management control

The most important indicators in this process are the following:

• amount of debt;
• the costs of its maintenance.

Careful and competent control over government management. debt allows you to avoid budget deficits. If this is not observed, the country may find itself in a difficult situation, so the help of a third party is often required in resolving controversial situations.

Bottom line

In 2018, the Russian government is actively working to improve the situation in this area and increase the country’s credit confidence in the international arena. For this purpose, 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.

About Mr. debt and more can be learned from the video:

Attention! Due to recent changes in legislation, the legal information in this article may be out of date!

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