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5МЕТОДИКА ОЦ1НКИ ШДПРИСМСТВАМИ ПТАХ1ВНИЦТВА НЕТАРИФНИХ ЗАХОД1В ЯК ПРОЯВ1В ПОЛ1ТИЧНИХ РИЗИК1В У ЗОВН1ШНЬОМУ СЕРЕДОВИЩ1
Лтич Л. Г.
доктор eKOHOMi4Hux наук, професор Схiдноeвропейський нацюнальний ушверситет MeHi Леа Украгнки
Фатенок-Ткачук А. О. кандидат e^mMi4Hux наук, доцент Схiдноeвропейський нацюнальний ушверситет iменi Леа Украгнки
THE ASSESSMENT METHODOLOGY OF NON-TARIFF MEASURES BY POULTRY ENTERPRISES AS A MANIFESTATION OF POLITICAL RISKS IN THE ENVIRONMENT
Lipych L. H., doctor of economics, professor Lesya Ukrainka Eastern European National University
Fatenok-Tkachuk A. A., doctor of philosophy in economics, assistant professor Lesya Ukrainka Eastern European National University
АНОТАЦ1Я
Запропоновано та апробовано комплексну методику ощнки полтичних ризитв, що об'еднуе результати викори-стання вiдомих практик та експертне оцшювання полтичнихризитв на потенцшнихринках збуту для втчизняних тдприемств птахiвництва. Систематизовано та згруповано потенцшш ринки збуту за ступенем полтичного ризику
АННОТАЦИЯ
Предложена комплексная методика оценки политических рисков, объединяющая результаты использования известных методик и экспертной оценка политических рисков на потенциальных рынках сбыта для отечественных предприятий птицеводства. Систематизированы и сгруппированы потенциальные рынки сбыта по степени политического риска.
ABSTRACT
A complex methodology for assessing political risks has been offered. This methodology combines the results of using known techniques and expert assessment of political risks on potential product markets by poultry enterprises. The potential product markets have been systematized and grouped according to the degree of political risks.
Ключовi слова: полтичний ризик, ощнка полтичного ризику, зовншне середовище, зовшшньоекономЫна дiяльнiсть.
Ключевые слова: политический риск, оценка политического риска, внешняя среда, внешнеэкономическая деятельность.
Keywords: political risk, political risk rating, the environment, foreign trade.
The problem statement and its relationship to important scientific and practical tasks. Laying it down as an axiom that humanity is guided by the desire for enrichment and the state acts as a guarantor, it can be confirmed that the national borders will never be closed to the international trade relationship. If we consider the question of the foreign economic activity of enterprises, in most cases, its effectiveness depends on which country is a counterparty. This is due to the fact that all the countries have different ways of the historical development, diverse financial and administrative systems, various amount of natural resources and so on. Thus, there are risks of failure to achieve target results of a separate transaction. These include political risks which can cause the introduction of non-tariff regulation measures.
In the face of uncertainty of the environment, the impact assessment of non-tariff regulation measures is a problematic task, especially if they cannot be quantified and forecast.
The analysis of the recent research in which the solution to the problem has been introduced. The theoretical aspects of the regulation of the international trade in terms of competitiveness have been considered by such scholars as Hrebelnyk O., Lukyanenko D., Naumenko N., Osyka A., Ruth F., Tkachenko N. In their works they reveal the content of the instruments of regulation of foreign economic relations. There are lots of foreign scholars who have studied these issues
including Baldwin R., Deardorf A., Stern R., Maskus K., Wilson J., Ottsuki T., Bora B., Layrd S. The fundamental research isn't of applied character towards the evaluation of non-tariff regulation measures, especially if their impact cannot be taken into account in the price of products offered for export, which is especially important in the development of the foreign economic activity of poultry enterprises.
Setting the objectives. All non-tariff regulation measures should be divided into two groups - price and non-price measures. Price measures are those that can be taken into account in the price of products in the form of ad valorem rates. Non-price measures are the ones that are hard to be quantified and predicted. The identification and evaluation of such measures are the subject of this research.
The main material research with the full justification of scientific results. The foreign economic activity of business entities includes the movement of goods as well as the capital flow between the government and commercial institutions. As a result, there is a number of risks that affect the interests of exporters, importers and investors [1, p. 18].
For exporters these risks are related to the risks of nonpayment for goods and provided services by customers abroad. On the one hand, there are risks of the ownership associated with the loss or damage to goods transported. On the other hand, there is a risk of non-payment after the receipt of goods in
case of the commodity credit. Some of these risks are subjected to the adequate assessment and can be insured. In addition to this, there are risks whose degree and realization probability are not directly dependent on the participants of the international trade. For example, there is a risk of conversion or prohibition on the transfer of foreign currency in the purchasing country. Such risks cannot be insured.
In the case of import transactions the risks which must be insured arise when the importer prepays for goods and services. Other risks include the importer's inability to obtain goods in the case of the government ban by the supplying country to export this kind of goods and the risk of transferring foreign currency from the supplying country that does not make it possible for the importer to return the advance payment.
In conventional insurance agreements these risks are regarded as force majeure [2, p. 68]. Such risks are generally termed «political risks» in the international practice. Political risks are considered to be a phenomenon because the behavior and decisions of those who are responsible for them are usually unpredictable and variable. This property of a risk is called hypo deviation (hyper instability) [8, p. 21].
Political risks are integrated relationships of political, economic, social, and psychological factors that can dramatically change the economic situation in the country, leading to losses in the trade area, credit, foreign exchange settlements and other activities carried out by legal entities and individuals. The paradigm of political risks lies in the fact that their existence cannot be determined at any given time. The existence of political risks is evident as we can objectively observe the consequences of their implementation and it is impossible to deny the probability of their existence at certain periods. On the other hand, the potential impact of political risks is not the same at any given time. "Political risks are everywhere and sometimes they aren't exposed to any logic" [3, p.12].
The explanation of this paradigm lies in the fact that political risks are a phenomenon of the quality system state. Furthermore, this state is constantly changing over time causing the change of risks. It should be noted that political risks are a combination of a number of reasons with different vectors of development. Thus, the vector of the political development appears as the direction of the situation development and its intensity. We regard political risks as a probability of implementing certain non-tariff regulation measures. It means that non-tariff measures are manifestations of political risks in a particular country.
Political risks can take different forms ranging from military conflicts to petty administrative regulations, provided that these events directly affect the implementation of signed contracts. Here are some non-tariff regulation measures that are manifestations of certain political risks, namely [3, p. 18]: devaluation / revaluation of the currency; embargo; currency restrictions, inconvertibility of the currency, a ban on the transfer of funds; nationalization, confiscation, expropriation; suspension or inability of the license for import / export; revolution, additional customs and tax measures; limitation of external financial flows; discrimination against foreign entities in relation to national ones; price restrictions; unjustified breach of contracts by public purchasers.
According to Lambert [8, p. 23], political risks are characterized by the difficulty of forecasting and implementing recourse to parties guilty of obtaining damages. The analysis of political risks in order to minimize the impact of non-price regulation measures by domestic poultry enterprises requires a meaningful approach. Forecasting this or that event may lead to different decisions. It all depends on who conducts this analysis and when. As we see in recent years, most significant or revolutionary changes within the whole states could not be foreseen by any methods of evaluation. This thesis is confirmed by the events within certain states which could not be foreseen according to some market participants.
Due to the significant uncertainty of environmental conditions it is necessary to form a special system of assessment of political risks by companies that plan to carry out the foreign trade. We can identify the following reasons that make this process complicated:
- the absence of statistics, which would make it possible to do analysis in retrospect;
- the assessment can be carried out in terms of quality criteria that cannot be linked to the calculation of probable losses of the enterprise in the future;
- the assessment of a certain partner country according to the past and today's macroeconomic indicators is likely not to be suitable for forecasting future results.
For the purpose of the effective assessment political risks should be considered in the context of their origin sources. We have grouped the main political risks for enterprises engaged in the foreign economic activity towards export and imports (See Table 1).
The main problem which arises in assessing political risks by business entities that plan to work on the international market is inaccuracy or lack of statistics on such risks.
Table 1
Events Non-tariff regulation measures as a result of political risks
Exporter Importer
Revolution Obstruction of operations, damage to assets as a result of military events, confiscation of assets
Change of a government, political conflicts between partner countries Embargo Obstruction of operations on the part of the state authorities
Power shift Licence revocation Damage to assets as a result of hostilities and riots
War, political turmoil, civil war Interference in the company activities Illegal license revocation
Non-payment of a state or private purchaser as a result of conversion or transfer of funds or in consequence of the state moratorium on full or partial repayment of the commercial debt Ban on currency conversion and repatriation of assets and goods
Illegal breach of a contract by a state counterparty
Non-fulfillment of judicial arbitration awards
Expatriation of employees
Note: The table has been constructed on the basis of references [5, 8]
The information of insurance companies is confidential for business entities. In most cases the existing assessment is qualitative and does not provide the information about the size of losses for the company. The majority of existing evaluation methods of political risks is based on the factor analysis that takes into account a significant number of factors which are described by a range of indicators. For the purpose of using such methods, the enterprise must engage a significant staff in this work or hire a consulting company but it entails significant costs.
There are two most well-known methodologies which consist in calculating certain indices. The first methodology consists in calculating the WPRF index (World Political Risk Forecasts) [3], which is published by Frost & Sullivan agency and is the result of the analysis of risk parameters. Separate indices are aggregated and each country gets a risk index. Another methodology consists in determining the BERI index (Business Environment Risk Index), which allows to measure the ratio of the country to the business world and foreign investments in general, and to calculate the degree of discrimination between domestic and foreign market participants. The expert assessment is the main source of information for such calculations.
Using both indices simultaneously gives an opportunity to achieve a greater accuracy in assessing risks because they complete each other [1, p. 59]. This approach enables enterprises to draw up the general global perspective on the country investigated.
Even a complex methodology has drawbacks. Such drawbacks are considered to be the main ones:
1. Among the large number of criteria there are those that have the most significant impact on the risks, but their effect is minimized by others.
2. The choice of criteria is always subjective.
3. All the factors have the equal significance in the given methodologies.
The advantages of using the results of these calculations
are such that they are based on the information which is available only for leading companies and financial institutions in the world. Thus, the access to this information is limited for domestic enterprises.
As a result of going beyond the national market, poultry enterprises have their own experience of being at any particular market and can independently assess the risks that exist there.
In the analysis of the environment, for the purpose of appearing on a specific market, in addition to their own experience and the experience of domestic competitors and partners, it is appropriate to take into account internal elements of analysis, namely: the reasons for such transactions; the peculiarities of the contract text; the quality and reputation of the foreign counterparty; the ways of financing and payment procedures; the availability of collateral and guarantees; the importance of such transactions for counterparty countries; the work experience with counterparties in this country.
We think that it is appropriate to use the methodology that combines the results of using known methods and expert assessment of political risks on potential sales markets by poultry enterprises. It will allow to classify potential sales markets according to the degree of political risks.
We suggest using the NSE index (Nord-Sud Export Consultans) instead of the WPRF index due to its greater availability.
The expert personnel of The Poultry Union of Ukraine and the department heads of sales companies of western regions of Ukraine were involved in expert assessment. In total seven experts participated. The questionnaire included all the countries identified as potential sales markets for domestic poultry producers. The total score for all the criteria had to be 100 points. The criteria for the assessment were the following parameters: the level of perception of trade agreements at the micro level, the level of assistance to the relationship from the side of the partner country, the level of perception of products of foreign origin, the level of perception of Ukraine as a partner, the level of variability related to Ukraine as a partner, the
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tendency of the partner country policy for military actions.
As a result, we got the score evaluation for each country. The experts used the following points: 1 (for the low level), 3 (for the medium one), 5 (for the high level). In terms of "the tendency ... for military actions", on the contrary, a country with the highest tendency got 1 point, with the medium one respectively - 3 points and a country with the lowest tendency for military actions got 5 points. Experts calculated the average score of each country in all respects.
The calculation is made in the following order (See Table 2): 1. The sum of ranks for each country and the potential sales market is determined according to the formula:
way:
1
Rcep -"X Ri
(2)
where n is the number of potential sales markets (n = 20). Then we get:
R = — x 383,82 = 19,19
ceP 20 .
3. The deviation Ai of the ranks amount of each index according to the average weighed amount Rcep is determined:
A. - R -R
(3)
Thus, the amount of deviations for all parameters must be
(i)
j-i
equal to 0 (
XAi - 0).
i-1
where R. is the rank of the i - th country according to the j-th expert; N is the number of experts.
2. The average amount of ranks is calculated in such a
4. The square of deviation for each index and their amount are calculated.
Table 2
Initial data for calculation
Index name Output data Calculation results
Ranks of indices according to experts R, Ai Ai2
I II III IV V VI VII
1 2 3 4 5 6 7 8 9 10 11
Estonia 3,00 3,33 4,00 3,33 3,33 3,00 3,67 23,66 4,47 19,98
Latvia 3,33 3,33 4,33 3,00 3,00 3,67 3,67 24,33 5,14 26,42
Lithuania 3,33 3,33 4,33 4,33 3,33 3,33 3,33 25,31 6,12 37,45
Belarus 2,67 3,33 2,00 2,33 2,67 2,67 3,00 18,67 -0,52 0,27
Moldova 3,00 2,67 2,00 2,33 2,33 2,67 2,67 17,67 -1,52 2,31
Poland 4,67 2,83 3,33 3,67 4,00 3,33 2,67 24,5 5,31 28,20
Slovenia 4,00 2,33 3,33 2,67 3,33 2,67 2,33 20,66 1,47 2,16
Romania 2,67 2,67 2,33 2,67 1,67 2,67 3,00 17,68 -1,51 2,28
Germany 3,00 2,33 1,67 3,33 3,67 2,00 3,17 18,17 -1,02 1,04
Turkey 3,83 2,67 2,00 3,67 3,00 2,67 2,00 19,84 0,65 0,42
Greece 2,83 2,33 1,67 2,33 1,33 1,67 2,00 14,16 -5,03 25,30
Italy 2,00 2,33 1,67 2,33 2,00 2,33 2,33 14,99 -4,2 17,64
Kyrgyzstan 2,83 3,00 3,33 3,67 2,33 2,33 3,00 20,49 1,3 1,69
Kazakhstan 3,00 3,17 2,33 3,00 3,00 2,67 2,33 19,50 0,31 0,10
Russia 2,00 2,33 2,67 3,67 3,00 2,67 2,67 19,01 -0,18 0,03
the Hashemite Kingdom of Jordan 2,00 1,67 3,00 3,00 2,00 2,00 2,17 15,84 -3,35 11,22
Israel 2,33 2,33 2,33 3,33 1,67 2,67 2,67 17,33 -1,86 3,46
the United Arab Emirates 3,00 2,33 2,33 3,00 2,67 2,67 3,00 19,00 -0,19 0,04
Georgia 3,00 2,67 2,33 2,33 2,67 1,67 3,00 17,67 -1,52 2,31
Armenia 2,67 2,00 2,33 2,17 2,33 1,67 2,17 15,34 -3,85 14,82
Total 383,82 0 197,14
5. The coherence coefficient of experts' views (W) is determined according to the formula (4) [2, p. 310],
W = -
N2 x (nJ - n), (4)
In case of a complete coherence of experts' views the
coefficient is W = W = l. The more differences in experts' views are, the smaller is the value of W. In our case, W = 0,724, which is over the standard value of 0,7. Therefore, the results of the examination can be used. If the coefficient is under the standard value, indices ranging should be repeated involving a greater number of experts.
6. After finding pairwise indices' priorities and making the quantitative assessment of the priority (in case when all the experts prefer a specific index, it gets the rate of 0,75 and the second one gets respectively - 0,25 (1 - 0,75)), the importance coefficient is calculated and in our case it will be the country's
political risk CCi.
n-1
S -i
i n n-1
ZZ*
,(5)
where CCi is the probability of political risks. In order to establish a new classification according to the degree of political risks we have reduced the value of all used indices to one form. The maximum value of the BERI index
The results of the calculation of political risks
is 100 points for the lowest risk, for the NSE index it is 700 points (for the lowest risk) and the result of their own export assessment is maximum 100 points (for the lowest risk). In order to sum these indices we offer to divide the value of the NSE index by 7. The final assessment of each country is calculated using the formula:
I = 1 BERI +I NSE ! 7 +IEXP ^ 100
p 3
(6)
where I - is the index of the political risk, I
BERI
NSE
is the NSE index, IEXP - is the index
the BERI index, I calculated as a result of the expert assessment.
The calculation results are shown in Table 3. The higher the calculated value is, the smaller is the political risk on the corresponding sales market.
As you can see, the highest political risks that can lead to the introduction of non-tariff regulation measures for poultry enterprises are on the markets of Belarus (38.7), Moldova (40.7), Armenia (41.0), Kyrgyzstan (45.3), Kazakhstan (45.7), Romania (47.3) and Russia (47.3). Accordingly, moderate political risks are considered to be on the markets of Jordan (49.0), Israel (49.3), Greece (49.3), Georgia (51), Italy (54.0), UAE (55.3) and Turkey (57.3). The lowest probability of the introduction of political non-tariff regulation measures for domestic poultry enterprise is on the markets of Estonia (58.3), Latvia (59.7), Lithuania (60.7), Slovenia (60.1), Poland (62.7) and Germany (66.0). Thus, the most favorable conditions in terms of the policy intervention are on the German market, the worst ones are in Belarus.
Table 4
on potential sales markets for poultry products
The potential marketing country The BERI index value The NSE index value The value of political risks according to the expert assessment Political risks
Estonia 55 57 63 58,3
Latvia 56 61 62 59,7
Lithuania 54 59 69 60,7
Belarus 32 36 48 38,7
Moldova 38 39 45 40,7
Poland 52 64 72 62,7
Slovenia 55 67 60 60,1
Romania 54 62 42 47,3
Germany 61 89 48 66,0
Turkey 56 62 54 57,3
Greece 56 60 32 49,3
Italy 62 68 32 54,0
Kyrgyzstan 36 44 56 45,3
Kazakhstan 35 48 54 45,7
Russia 39 52 51 47,3
the Hashemite Kingdom of Jordan 48 62 35 49.0
Israel 46 60 42 49,3
the United Arab Emirates 51 64 51 55,3
Georgia 50 58 45 51,0
Armenia 46 42 35 41,0
Note: Calculated by the author on the basis of the expert evaluation and references [7, 8]
Conclusions. In the process of developing the strategic planning of the foreign economic activity by business entities they should take into account political risks as the probability of the introduction of non-tariff regulation measures on the relevant markets and it can help to reduce the probability of incurring damages and losses.
List of References
1. Карякин М. Ю. Страхование политических рисков внешнеторговых операций и международных инвестиций: вопросы теории и методологии / М. Ю. Карякин. М. : «Авуар консалтинг», 2002. - 144 с.
2. В. О. Онищенко Оргашзащя виробництва : навч. пос. / В. О. Онищенко, О. В. Редкш, А. C. Старовiрець. -
Ки1в : В-во '"Шбра", 2005. - 376 с.
3. Турбина К.Е. Тенденции развития мирового рынка страхования / К. Е. Турбина. - М. : Анкил, 2000. - 312 с.
4. Benmansour H. Le risqué politiguedans le nouveau contekxteinternational / H.Benmansour, C. Vadcar. - Paris. : Dialoques Editions, 1995. - 246 p.
5. Bernhard T. L'assurance du risqué politigue relative aux operations de commerce enterieur. - Aix-Marseille. : Presses Universitaires d'Aix-Marseille, 1989. - 127 p.
6. Biz Consult // Corporate Services. - [Електронний ресурс]. - Режим доступу : www.bizconsult.ee/?page=markets
7. Business Environment Risk Intelligence // Tomorrow's Intelligence Today. - [Електронний ресурс]. - Режим доступу : www.beri.com/librory/Publications/HRRP.aspx
8. Lambert J. P. Operetions internationals et risqué politigue / J. P. Lambert. - Paris. : LArqus, 1984. - 213 p.
GENDER-ORIENTED BUDGETING AT THE LOCAL LEVEL: PROBLEMS AND
PERSPECTIVES FOR UKRAINE
Nataliya Feshchenko
Candidate of Economic Sciences, Finance and Credit Department, Zhytomyr National Agriculture and Ecology University of Ukraine
ABSTRACT
It was conducted the research concerning gender budgeting as an instrument of raising efficiency of using budget resources, providing gender equality and fair distribution of budget outgoings by gender characteristics.
It was discovered theoretic and methodological grounds of gender budgeting and background for implementing it into budget process, particularly at the local level.
According to the results of native legislation in the appropriate sphere it was made the conclusion as for existing backgrounds for gender aspects integration into budgeting social spheres in Ukraine. According to analyzing budget programmes in socio-gender point of view, it was grounded the relevance of implementing elements of gender budgeting into the process of budget planning and the necessity in gender aspects integration (for example, resultant indexes of gender equality) into the system of programme-aimed method (PAM). It was offered the integrated model of implementing elements of gender budgeting into the main components of PAM.
Keywords: local budgeting, local budget output, gender budgeting, gender analysis, gender equality, programme-aimed planning.
Introduction
The contemporary development state of Ukraine is characterized by implementing profound reforms in different life spheres: political, socio-economic, budget and financial. Such reforms are conducted both at the state and at the local levels.
Reforming local self-government deserves special attention as it influences life level of ordinary citizens and thus it influences well-being of the whole country.
The measures connected with the improvement ofbudgeting system and local self-government system; have to be directed to reaching decentralization in managing financial resources, redistributing authorities in favour of territorial community. Such steps have to bring Ukraine closer to the European level.
Taking into account gender factor is one of the crucial aspects in the efficiency of such reforms. Among various instruments at the disposal of state gender policy, special attention should be paid to gender budgeting. This technology is oriented to taking into account interests and requirements of various citizens'
categories in the process of forming and fulfilling the budget. It is an essential instrument for providing gender equality and developing democratic management principles.
Materials and methods
Taking into account gender aspects in the budget processes is a comparatively new approach of research in economic and financial science. The problem of gender analysis in budget policy is researched by the foreign experts: S.Qeen, D.Badlander, D.Elson, E.Klatster, R.Sharp and the home scientists: Z.Belets, L.Lobanova, S.Garashchenko, I.Uskov [1-4]. At the same time many theoretic and practical questions inn this sphere still need profound research.
Taking into consideration everything noted above it is obvious to see the urgency of the topic selected for this article. The aim of the article implies discovering theoretic and methodological grounds of gender budgeting and researching background for its implementation at the local budgets' level.
In the process of reaching the goal denoted the following research methods will be used: system (for discovering
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