Financial strategy in the public governance system

Relevance of the research topic. The current stage of socio-economic development of both countries with developed and transformational economies is characterized by uncertainty of the external environment, intensification of globalization processes, which raises the issue of substantiation of financial strategy, specification of its tasks and development of tools for their solution. Formulation of the problem. With increasing volatility of socio-economic dynamics, the COVID-19 pandemic raises the need to develop a public financial strategy that will improve the quality of fiscal risk assessment, develop tools to minimize them, increase coordination of public authorities, reduce unproductive government spending. Analysis of recent research and publications. Problems of formation and implementation of financial strategy in the system of public administration are revealed in many scientific researches of domestic and foreign scientists: J. Keynes, P. Samuelson, J. Stiglitz, S. Kucherenko, L. Levaeva, L. Lysyak, I. Lukyanenko, L. Marmul, V. Makogon, V. Fedosova, I. Chugunova and others. Selection of unexplored parts of the general problem. Increasing volatility of socio-economic dynamics impairs the chances of rapid economic recovery. In this regard, an important task is to develop a public financial strategy aimed at implementing measures to minimize fiscal risks. Problem statement, research goals. The objectives of the study are: to substantiate the role of financial strategy in the system of public administration in conditions of increasing volatility of socio-economic dynamics, the COVID-19 pandemic; to determine the features of the formation and implementation of financial strategy in the system of public administration; to analyze and estimate state budget expenditures. The purpose of the study is to reveal and substantiate approaches to the formation and implementation of financial strategy in the public administration system. Method or methodology of the study. To achieve the goal of the article, a set of general scientific and special methods was used: theoretical generalization and comparison; systemic; comparative analysis; scientific abstraction. Presentation of the main material (results of work). The role of financial strategy in the system of public administration in the conditions of increasing volatility of socio-economic dynamics, pandemic COVID-19 is revealed. Peculiarities of formation and implementation of financial strategy in the system of public administration are determined. The analysis and estimation of state budget expenditures is carried out. Approaches to the formation and implementation of financial strategy in the public administration system are substantiated. Field of application of results. The results of the study can be used in the process of reforming the financial system and its components. Conclusions in accordance with the article. The formation and implementation of a sound public financial strategy is a prerequisite for ensuring the stability of macroeconomic dynamics through the synergy of tools of the components of the public administration system, the development of tools to minimize fiscal risks.

Information support for the state-owned enterprises management under uncertainty caused by the COVID-19 pandemic

The article highlights new approaches to understanding the place and role of accounting in business management within the modern views on essence and functions of management. Accounting is considered as a service function in relation to the management of entities, including state ones, but also it has assumed the task of providing the information support of risk management. The aim of the article is to study the information support of SOE management under uncertainty caused by COVID-19 pandemic. It has been proved that the state fiscal risks are associated with the asymmetry of SOE accounting information and financial statements. The information support of SOE management depends on financial planning. This is conducted through the financial plan as the subject of management. The financial plan defines the tasks and performance indicators that must be achieved by SOE. The author mentions the positive aspect of regulation of planning and reporting on the implementation of the plan of SOE saying that the legislation provides an approach to the formation of planning and reporting information based on national standards’ and IFRS methodology. At the same time, the assessment of methodology of planning SOE activities should take into account the contemporary state of financial plan preparation. Today preparation of SOE financial plan must comply with limits on expenditures set by CMU Resolution No. 1673. However, it doesn’t consider the IFRS existence, which affects the amount of costs and for which professional judgment is made. There is a possibility for costs’ manipulations in legislation for SOE. The COVID-19 pandemic increases fiscal risks and stimulates necessity to apply a number of measures aimed at overcoming them and improving management information support in the new conditions.

Pandemic spending demands raise fiscal risks in Chile

Headline CHILE: Pandemic spending demands raise fiscal risks

Islamic Republic of Afghanistan

This remote mission provided the authorities with advice in fiscal risk management. The mission covered three interrelated topics: (i) the Public Finance and Expenditure Management (PFEM) Law and fiscal risks oversight and management; (ii) the Stated-Owned Corporations (SOC); and (iii) the Public-Private Partnerships (PPP). This report focuses especially on reforms that could be implemented during the life of the next IMF program.

How the Pension System Responds to Pandemic Shocks: A Case Study of Georgia

The paper focuses on the impact of the pandemic crisis on pension system in Georgia and analyzes the pros and cons of the ongoing pension reforms in the country. Decreased birth rates and increased life expectancy over the next decades will significantly change the picture of the age distribution of the population in many countries. As life expectancy increases and the birth rate decreases, more people retire than are added to the workforce. A change in the demographic picture necessitates fundamental pension reform. At the same time, the world is facing a crisis caused by the COVID-19 pandemic. The future is uncertain, both medically and financially. Despite optimistic forecasts, the second wave of the COVID-19 pandemic has begun in many countries which further increases the degree of uncertainty. Funded pension schemes suffer from the crisis because lower returns diminish their asset values, while low yields on public debt instruments increase the present value of their liabilities. This can generate both explicit fiscal risks— in the case of government guarantees—and implicit fiscal risks through lower private pension benefits or financial strain on the sponsoring employers. Our research is focused on the pension system and its development problems in Georgia, taking into account that since 2019, 1st January, the existing financial, demographic and economic challenges have determined the establishment of a new pension system. Main sources for the research are data gathered from the international organizations and local governmental and statistical data softwares. Our research results show that the pension reform launched in 2019 in Georgia is a significant step forward in reducing social imbalances and fiscal pressures in the medium / long term. However, for further development, it is important to systematically assess the effectiveness of pension policies, taking into account factors such as changes in demographic structure, expected fiscal spending, the inequality gap and the crisis caused by the COVID-19 pandemic.