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Section 13. Economics and management
DOI: http://dx.doi.org/10.20534/ESR-17-3.4-120-122
Kucherova Iryna Mykolayivna, PhD in Economics, external scholar, Institute of International Relations, Taras Shevchenko National University of Kyiv E-mail: ik300964@gmail.com
Ways of sustainable development of Ukraine in the conditions of current instability
Abstract: The article examines the factors that threaten macroeconomic stability of Ukraine. Analyses challenges in budgetary sector that affect fiscal policy of the country, as well as determines the directions to overcome the crisis and defines priorities for the forthcoming development of Ukraine within the period until 2020.
Keywords: strategy of sustainable development, motion vectors, reforms, investment climate, macroeconomic indicators.
Tax system plays an important role in the process of strengthening the financial security of the country. In regards to the complexity of the system of economic relations in the country and the world, it requires constant development and improvement. During the years of independence of Ukraine the process of tax system reforming obtained certain permanent features. However, it did not become the defining driver of sustainable long-term socio-economic growth.
Analysis of the economy of Ukraine indicates that there is a number of weak points in the fiscal sector that cause serious challenges.
According to the World Bank estimates the growing needs of public infrastructure (including its repair due to depreciation) in 2006-2015 amounted to 100 bln. dollars USA [1]. Given the type of necessary basic infrastructure there is a need to increase the current level of spending in public infrastructure by at least three times.
Due to the limited competition in all sectors that slows down the implementation and further upgrading of technology, the country failed over the last decade to upgrade its technology base and it got stuck on the way to extensive, product oriented growth which is also enhanced by increasing instability and limited productivity growth. This vicious circle prevents country from restructuring of its economy and restrains the achievement of higher levels of per capita income as well as living standards of citizens of Ukraine.
Unreformed pension system and aging population of Ukraine (over 14 millions retired people) threaten the short-term fiscal sustain-ability (to finance them becomes more difficult) and long-term stability (up to 2020 there will be one retiree per each pension tax payer and eventually this ratio will change for worse). Life expectancy in the country is 71 years old, this is 10 years less than the average EU level.
The education system is facing a reduction in the ranks of students. Economy requires improving of the quality of education, but without spending additional resources on it.
All mentioned above requirements should be met with gradual and parallel decrease of state intervention in the economy and creation of the conditions for wider involvement of private sector.
For now Ukraine, it seems, fell into the trap of a long-term stagnation caused by factors listed in Figure 1. Distrust related to bad governance and corruption is the main obstacle on the way to attract foreign direct investments.
Entrepreneurs face a lot of rules and regulations, complex procedures of obtaining permits and licenses, outdated regulations and certification requirements, as well as insufficient legislation in the sphere of real estate ownership (including land), contractual rights and intellectual property rights.
Barriers to entry associate with the high cost for transportation and logistics services. While competition law is generally consistent with international practice, its application in some cases is under political pressure.
On the way of capital inflow there are macroeconomic imbalances and fears associated also with fiscal policy. Marginal rates for direct taxes are high. While the average tax burden is not significantly higher than in other European countries, it is high enough compared to countries with the same level of income, and other countries in transition phase. High costs are also associated with tax compliance (including frequent and aggravating audits).
An important step in overcoming the crisis was the signing of the Decree "Strategy of Sustainable Development "Ukraine - 2020" by the President of Ukraine in January 12th, 2015.
With regards to the European aspirations of Ukraine, the main document to determine the direction and priorities of Ukraine for the period until 2020 was the Strategy of Sustainable Development of the European Union developed by European countries in June 2001 and confirmed in adopted in 2010 Communication from the European Commission "Europe 2020" in which EU member states have identified five ambitious goals by 2020 in the areas such as labor employment, innovation development, education, social integration, climate/energy [2]. However, each member state has developed its own national targets in each of these areas, and concrete measures on the national level to be taken with a view to their implementation.
Strategy ofSustainable Development "Ukraine - 2020" identified four vectors of directions: sustainable development; security, business and citizens; responsibility and social justice; pride for Ukraine in Europe and worldwide, — including 62 reforms with the following priorities: reform of national defense and security system, renewal of authorities and anti-corruption reform, judicial reform, law enforcement reform, decentralization and public administration reform, deregulation and enterprise development, reform ofhealth care system, tax reform.
Ways of sustainable development of Ukraine in the conditions of current instability
Figure 1. Factors that hinder investments, competition development and structural adjustment in Ukraine
Realization of defined strategy suggests accomplishment of 25 key indicators that evaluate the implementation process of reforms and programs, including: achieving a place among the first 30 positions in the World Bank "Doing Business"; net FDI inflow for the period of2015-2020 in the amount of more than 40 bln. dollars USA, according to the World Bank; maximum ratio of budget deficit to gross domestic product (GDP) estimated by the IMF less than 3%; spending on national security and defense should be not less than 3% of GDP; based on the corruption perception index calculated by Transparency International, Ukraine should be among the top 50 countries in the world; the World Bank estimated increase in human life expectancy by 3 years for Ukraine; based on the results of the international study of education quality PISA, Ukraine should be among the top 50 countries [3].
The research results of "Doing Business" in Ukraine conducted by the World Bank Group from 2014 to 2017 indicate that country is approaching the best practices, however, at the same time not all reforms are conducted in the efficient way (see Table 1).
Table 1. - Rating for Ukraine reforms implemented in 2014-2017
Year Rating,%%
Company registration Obtaining building permits Property registration Getting credit Taxation International trade Enforcement of contracts (quality of justice) General
2014 47 41 97 13 164 148 45 112
2015 70 139 64 17 106 109 98 87
2016 24 137 62 19 83 110 93 81
2017 20 140 63 20 84 115 81 80
Note. Table compiled from data [4; 5].
Yet, drastic reforms undertaken in 2014 and 2015 helped to stabilize the economy and improved the investment climate. According to macroeconomic indicators presented in Table 2 GDP growth in 2016 was 2.3% compared to 16% decline accumulated during the period of two previous years.
Growth of gross fixed capital formation in 2016 exceeded 20% due to increased investment in production machinery and equipment [6], indicating improved investment environment.
The poverty rate after a significant increase from 15% in 2014 to 22% in 2015 because of a deep economic recession and high inflation began to decline in 2016 and was 11%.
Inflation decreased from 43.3% at the end of 2015 to 12.4% in 2016. However, the labor market situation remains difficult, the
Table 2. - Major macroec
unemployment rate increased from 9.1% in 2015 to 9.3% in 2016, while spending on pensions in 2016 amounted to 10.8% of GDP, leading to the formation of the pension fund deficit at around 5% of GDP [6] and is currently a major fiscal risks.
However, due to increased economic activity in 2016 some tax revenues exceeded expectations from value added tax, tax on personal income and corporate income tax revenues increased by 7.6%, 13.1% and 25.7% respectively [7].
State direct and guaranteed debt of Ukraine in 2016 increased to 81.2% of GDP (mainly through Privat recapitalization in December 2016), but the growth of foreign direct investment, which mainly associated with an increase in banks' capital was sufficient and international reserves increased to 15,5 bln. dollars USA [6].
imic indicators of Ukraine
2014 2015 2016 2017* 2018* 2019*
Nominal GDP, bln. UAH 1,587 1,980 2,383 2,735 3,085 3,450
Real GDP,% change - 6.6 - 9.8 2.3 2.0 3.5 4.0
Consumption,% change - 6.2 -15.9 1.4 3.1 2.8 3.3
Exports,% change - 14.2 - 13.2 - 1.6 1.6 3.0 5.0
Imports,% change - 22.1 - 17.9 8.4 1.7 1.6 6.7
External debt,% of GDP 97.6 131.5 129.6 131.6 125.4 107.5
Budget revenues% of GDP 40.3 42.1 38.4 38.8 38.9 39.0
Budget expenditure% of GDP 44.8 43.2 40.6 41.9 41.5 41.4
Balance of the budget expanded gov-ernment,% of GDP - 4.5 - 1.2 - 2.2 - 3.1 - 2.6 - 2.4
State and guarantor. debt% of GDP 70.3 79.4 81.2 88.8 83.5 75.9
World Bank forecast Note. Table compiled from data [6].
World Bank forecast economic growth in Ukraine remains moderate: in 2017-2% in 2018-3.5% and in 2019-4% [8] in the slow process of reform in a complex political environment. In addition, from January 2017 exacerbated the conflict in eastern Ukraine, there is a negative impact of the termination of trade with not by controlled territories of Donetsk region for two such important sectors as metallurgy and electricity (short steel exports and increasing imports of coal may lead to increase in 2017 the deficit of the current deficit to 4.1% of GDP).
Challenges in the public sector are also significant in 2017 is expected to increase the government deficit expanded to up to 3.1%
of GDP by increasing minimum wages and a large pension fund deficit, bringing public and publicly guaranteed debt will rise to almost 89% of GDP.
To maintain macroeconomic stability and ensure a gradual reduction of the debt burden (net repayment of foreign loans is estimated at 7 bln. dollars USA per year for 2017-2019) fiscal policy Ukraine should ensure deficit reduction in 2020 to a level that does not exceed 2% of GDP. Achieving this level of deficit requires a system of fiscal consolidation, supported by thorough structural reforms in tax administration, broadening the tax base, reform of the pension and social security.
References:
1. The strategic choices to accelerate and sustain growth in Ukraine. Economic Memorandum [Electronic resource] / The World Bank. -Access: URL: http://www.wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/06/07/000333038_20120 607232047/Rendered/PDF/558950UKIA00UA0CEM0UKR0complete.pdf
2. Europe 2020. A Strategy for smart, sustainable and inclusive growth [Electronic resource]/European Commission. - 03 March 2010. -Access: URL: http://ec.europa.eu/eu2020/pdf/C0MPLET%20EN%20BARR0S0%20%20%20007%20-%20Europe%202020%20 -%20EN%20version.pdf
3. Decree Strategy of Sustainable Development "Ukraine - 2020" by the President of Ukraine from 12.01.2015 [Electronic resource]. -Access: URL: http://zakon2.rada.gov.ua/laws/show/5/2015
4. The report "Doing Business" [Electronic resource] / Wikipedia - the free encyclopedia. - Access: URL: https://uk.wikipedia.org/wiki
5. Doing Business - 2017: Equal Opportunity for Allevaluation [Electronic resource]/The World Bank Group. - 25 october 2016. - Access: URL: http://www.doingbusiness.org/~/media/wbg/doingbusiness/documents/profiles/country/ukr.pdf
6. Ukraine Economic Review, - 2017 april [Electronic resource] / The World Bank. - 04 april - 2017. - Access: URL: http://pubdocs. worldbank.org/en/818761491297156049/Ukraine-Economic-Update-April - 2017, - uk.pdf
7. State Fiscal Service of Ukraine. Official website: URL: http://www.sfs.gov.ua
8. Global Economic Prospects. Weak Investment in Uncertain Times [Electronic resource] / The World Bank. - January - 2017. - Access: URL: http://www.vsemirnyjbank.org/ru/publication/global-economic-prospects
DOI: http://dx.doi.org/10.20534/ESR-17-3.4-122-125
Temirkhanov Mutabar Juraevna, Department of "Accounting" Assistant Tashkent State economic University E-mail: mutabarchik@mail.ru
Improving the regulatory framework of financial accounting and reporting the tourist organizations of Uzbekistan
Abstract: The article deals with questions of normative and legal basis of the organization of the financial accounting and reporting in the tourist organizations of the Republic of Uzbekistan.
Keywords: regulatory-legal framework, law, financial accounting, reporting, travel agency.
In my opinion, the topic of "State of the tourism management" is one of the most interesting submitted for consideration.
The urgency of this problem lies in the fact that tourism is an integral part of the lives of people on the planet. This is a complex, high-yield interdisciplinary complex represents one of the major sectors of the world economy, promotes a high level of employment, as well as development, economic cohesion and cultural diversity of the world.
The experience of different countries shows that the success of tourism development depends on how at the state level, this industry is perceived as it enjoys government support. Any civilized state to receive income from the tourism industry in the budget, should invest in the research of their territories to assess the tourism potential, the preparation of tourism business development programs, projects, infrastructure and resort areas and tourist centers and in advertising [1].
Of private sector will never be able to cover the large investment needs for the development of the resort, hotel, tourism enterprises. All travel powers have such organizations, subordinates, as a rule, the ministries that are engaged in the development of national programs for the development of tourism: in Veliko Britain — BTA (British Tourist Authority), in Spain — Turespana, Norway — NOR-TRA. They contain a representation of tourism in other countries, they develop into tourist attractions of the program and ensure the flow of tourist information.
The specifics of tourism associated with the international character and the wide range of relations, which have to engage those involved in the organization of leisure and travel. This increases the complexity of the legal regulation.
In any state relations "tourist — travel agency", "tourist-state", "travel agency-state", is regulated by the relevant legislation. Depending on the state of civilization, its degree of approximation to the
