Assessment of government debt security of emerging markets: theory and practice

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This study came to inspect a new approach to the government debt security assessment based on the systematization of indicators in terms of four directions: solvency, liquidity, domestic indebtedness, and external indebtedness. The proposed methodology considers the weaknesses, which negatively affect the level of government debt security.
It was established that in 2014−2016 the level of security at emerging markets was the worst. The main reason was insufficient solvency. Also, the obtained results showed that the general assessment of domestic indebtedness in recent years had a more dangerous level than the external one. In addition, it was revealed that similar problems with the level of debt burden are also presented in the EU countries since the value of the analyzed indicator – general government debt to GDP – exceeds 60%.
It is recommended to consider the experience of debt management reform of new members of the EU and, at the same time, post-socialist countries by other emerging economies.

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    • Figure 1. Establishing the government debt security place in the overall structure
    • Figure 2. Conceptual framework for the assessment of the government debt security index
    • Figure 3. Integral index of Ukraine’s debt security
    • Figure 4. Dynamics of the general assessments and the integral index of the government debt security during 2006−2016
    • Figure 5. The ratio of government debt in Ukraine and the Czech Republic, % of GDP, 2006–2016
    • Figure 6. The ratio of external debt in Ukraine and the Czech Republic, % of GDP, 2006–2016
    • Table 1. Comparison of the approaches to the government debt security indicators’ assessment
    • Table 2. General government gross debt in emerging economies, % of GDP, 2006–2016
    • Table 3. General government gross debt to GDP ratio in European countries in 2016
    • Table A1. Results of calculation of the debt security indicators (methodology from 2007)
    • Table A2. Results of calculation of the debt security indicators (methodology from 2013)
    • Table B1. Results of calculation of the debt security indicators (authors’ approach)