Dobromirova O.V., Ivanov R.V., Goncharova Y.S.

Dnipropetrovsk national university named after O. Honchar , Ukraine

FEATURES OF ANTI-CRISIS POLICY OF LEADING WORLD POWERS

 

T here is no consensus on the causes and nature of the global crisis throughout the world . Somebody calls it the crisis of excessive consumption , while others say that this is the crisis of virtualization of the world economy and the exacerbation of contradictions between its financial and real sector . Most experts suggest that the main cause of crisis is a huge imbalance between the volumes of financial transactions and the fundamental value of assets ; gap between world production and consumption of the "golden billion " . Depending on the assessment of the causes and consequences of the crisis , as well as available financial and material resources, governments build their policies to find the way out of the situation .

The crisis has showed that n either developed liberal economy of the USA , nor the highest corporate culture in Japan , or planned system in Belarus , or raw wealth of Saudi Arabia or Russia could not remove the threat of recession . The total amount of state support , aimed at economies of the " Big Twenty " ( including the European Union as a whole ) during the crisis , makes up $4 trillion .
  Leaders in adoption of crisis management programs are the most developed countries for example Ireland , United Kingdom , Sweden , the Netherlands , Germany , Japan , etc.

A generalization of the international experience allows to emphasize a number of crisis management tools in the following sectors of economy.
1. Expansion credit offers : increase the economy crediting by development banks , the annual renewal of the grace period , during which the debtor can repay only the interest , deferring repayment of principal debt , strengthening and extension of government guarantees , the purchase of securities issued by companies in order to reduce strict conditions of funding .

2. Support of small and medium businesses : interest rate subsidies on commercial loans to small and medium-sized enterprises and households , temporary reduction in the rate of corporate tax , simplification of procedures for obtaining loans and increasing the minimum limit , the financing of consulting services.

3. Stimulus for investment and innovation: the provision of temporary investment tax credits for the purchase of new physical assets and capital investments ; recovery for payment of interest on loans , aimed at technological upgrading , lowering the interest rates on loans to finance investment , the creation of a strategic investment fund to protect industries from foreign takeovers .

4. Support of industries : the provision of funds to repair public housing for the poor , raising subsidies for farmers , increase in government purchases from them , expanding the volume and range of public training and retraining programs for workers , providing tax credits and expansion of the volume of subsidy for businesses to create new jobs , etc.

5 . Cutting of consumer spending : freezing the amount of payment for travel , as well as the temporary reduction of regulated prices for gas and electricity.

6 . Tax incentives : increase in the minimum wage , raising wage levels from which to pay the tax on personal income , a reduction ( or the introduction of a flat ) tax rate on income of individuals , a reduction rate of compulsory insurance for sickness , unemployment and health insurance for people with low incomes.

7 . Increases in social payments : increase in payroll budget and state enterprises , raising the average amount of social pension to the level of subsistence level , raising the minimum hourly wage , increase in the size of payments for children , etc.

For example, in the framework of anti-crisis plan , the German Government has provided needy families with children under 100 euros for each child . The Chinese Government has allocated 42.9 mlrd.yuans ( 6 billion U.S. dollars) to cover health insurance of employees who were laid off from bankrupt state enterprises .

8. Housing policy: introduction of tax incentives and subsidies for buying the first home, providing free advice on debt service ;
The implementation of these anti-crisis measures requires the concentration of significant financial resources from the state. Specific countries use different packages of funding sources, amongst them: the state budget deficit increasing due to a number of tax benefits, the growth of public debt, use of foreign exchange reserves to inject liquidity into the banking system (South Korea), support of companies access to liquidity (Brazil); treasury bonds issue; use of sovereign wealth funds and national funds (Kazakhstan, Russia, Norway), use of state-owned banks and development banks.

Thus, we can draw a conclusion that direct configuration of anti-crisis package of measures depends on the particularity of crisis development in each individual country, the specificity of its economic system, political priorities and preferences, as well as the ability of public authorities to implement such measures. Improvement of economic relations and financial regulation in the domestic and foreign policies with international experience can provide opportunity for Ukraine to overcome the crisis with the smaller losses and provide a decent standard of living of citizens.

 

The list of references:

1. Kindlberger C. ,   Panics and Crashes: A History of Financial Crises. / C. Kindlberger , Manias Aliber . – Hoboken-London: JohnWiley&Sons . – 2005.

2. Reinhart C. Is the 2007 U.S. Sub-Prime Financial Crisis So Different? An International HistoricalComparison / C. Reinhart, K. Rogoff . – NBER Working Paper, Cambridge , Ma., National Bureau of Economic Research. – 2008. – № 13761 .

3. Baranovsky O. Sh. Anti-crisis policy of foreign countries / O. Sh. Baranovsky // News NBU . – 2009. – № 4. – Р . 8 –19.