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Author: Ms. Anja Baum Publisher: International Monetary Fund ISBN: 1513591185 Category : Business & Economics Languages : en Pages : 27
Book Description
The size and operation of state-owned enterprises (SOEs) can imply significant risks for governments. SOEs are present in virtually every country in the world and are major players in domestic economies and in global markets. In some countries, they number in the thousands and are owned by national or subnational governments. SOEs are among the largest corporations in some advanced economies and comprise a third or more of the largest firms in several emerging markets. Many operate with systematic losses and carry significant liabilities. If SOEs face adverse shocks and financial distress they can impact the government budget or balance sheet through numerous transmission channels. This How to Note describes a newly developed SOE risk assessment tool to help country authorities and IMF country teams. The analysis can provide inputs for annual budgets and medium-term fiscal planning. This includes providing estimates of possible transfers to and from SOEs to the budget and possible financing needs. The note outlines the main steps and elements of the template to assess fiscal risks for governments from individual SOEs. The first step is to collect financial information on SOEs and their relation to the government budget, and to provide a benchmark against other SOEs in similar sectors. A second step is to do a forward-looking analysis based on baseline forecasts and stress scenarios, to identify and analyze possible risks and their impact on government accounts.
Author: Ms. Anja Baum Publisher: International Monetary Fund ISBN: 1513591185 Category : Business & Economics Languages : en Pages : 27
Book Description
The size and operation of state-owned enterprises (SOEs) can imply significant risks for governments. SOEs are present in virtually every country in the world and are major players in domestic economies and in global markets. In some countries, they number in the thousands and are owned by national or subnational governments. SOEs are among the largest corporations in some advanced economies and comprise a third or more of the largest firms in several emerging markets. Many operate with systematic losses and carry significant liabilities. If SOEs face adverse shocks and financial distress they can impact the government budget or balance sheet through numerous transmission channels. This How to Note describes a newly developed SOE risk assessment tool to help country authorities and IMF country teams. The analysis can provide inputs for annual budgets and medium-term fiscal planning. This includes providing estimates of possible transfers to and from SOEs to the budget and possible financing needs. The note outlines the main steps and elements of the template to assess fiscal risks for governments from individual SOEs. The first step is to collect financial information on SOEs and their relation to the government budget, and to provide a benchmark against other SOEs in similar sectors. A second step is to do a forward-looking analysis based on baseline forecasts and stress scenarios, to identify and analyze possible risks and their impact on government accounts.
Author: Ms.Anja Baum Publisher: INTERNATIONAL MONETARY FUND ISBN: 9781513557502 Category : Business & Economics Languages : en Pages : 43
Book Description
Ensuring that state-owned enterprises (SOEs) are efficient and managed prudently is important for economic and social reasons. It is also crucial to contain fiscal risks and reduce the burden on taxpayers from recurrent and large bailouts. Governments need to develop stronger capacity to monitor and mitigate the risks from SOEs. We present a risk tool to benchmark the performance of SOEs relative to their peers and assess their vulnerabilities, including through stress tests. A strategy to mitigate risks requires the right incentives for managers to perform and for government agencies to conduct effective oversight. Incorporating SOEs in overall fiscal targets would promote greater fiscal discipline and transparency.
Author: International Monetary Fund. Fiscal Affairs Dept. Publisher: International Monetary Fund ISBN: 1498334520 Category : Business & Economics Languages : en Pages : 45
Book Description
A number of member countries have expressed interest in advice regarding disclosure and management of fiscal risks (defined as the possibility of deviations of fiscal outcomes from what was expected at the time of the budget or other forecast). This paper analyzes the main sources of fiscal risks and—building on an overview of existing practices in a wide range of countries—provides practical suggestions in this area, including a possible Statement of Fiscal Risks and a set of Guidelines for Fiscal Risk Disclosure and Management.
Author: Hana Polackova Brixi Publisher: World Bank Publications ISBN: Category : Business & Economics Languages : en Pages : 390
Book Description
Many governments have faced serious instability as a result of their contingent liabilities. But conventional public finance analysis and institutions fail to address such fiscal risks. This book aims to provide motivation and practical guidance to governments seeking to improve theirmanagement of fiscal risks. The book addresses some of the difficult analytical and institutional challenges that face reformers tooling up to manage government fiscal risks. It discusses the inadequacies of conventional practices as well as recent advances in dealing with fiscal risk.
Author: Aldo Musacchio Publisher: Inter-American Development Bank ISBN: 1597823716 Category : Business & Economics Languages : en Pages : 259
Book Description
The situation of state-owned enterprises (SOEs) in Latin America and the Caribbean continues to be dire. This book uses an original database of SOE performance that shows that every year about one-third of such enterprises in the region report losses (up to 70 percent in some countries) and that they require between 0.3 and one percentage point of GDP in fiscal transfers to cover such losses. Countries in the region have adopted centralized agency monitoring of their SOEs, managed to reduce the fiscal burden of SOEs, shown better financial returns, and accumulated less liabilities to GDP, thus generating less fiscal risk for the government overall. Each of the chapters provides a practical way to solve either asymmetry of information problems in the monitoring of SOEs or solutions to reduce the discretionary nature of the fiscal governance of SOEs. Chapter 2 details the kinds of fiscal risks and contingent liabilities that SOEs create for governments and provides a set of controls to limit those risks. Chapter 3 shows that allowing SOEs to issue bonds has been an ineffective way of hardening their budget constraint, given that investors price those bonds at a discount. Chapter 4 presents a state-contingent financial instrument that allows investors to value an SOE. Chapter 5 provides empirical evidence on the advantages of SOE centralized monitoring agencies in Latin America and the Caribbean, highlighting Chile, Peru, and Paraguay. Chapter 6 examines the experience of East Asian countries with holding companies and discusses when holding companies are a better vehicle to control SOEs. Chapter 7 suggests ways to align the incentives of politicians and SOE managers to provide better goods and services. Finally, Chapter 8 provides a practical guide to improve the monitoring of SOEs and to design a centralized monitoring agency.
Author: Matias Herrera Dappe Publisher: ISBN: Category : Languages : en Pages : 39
Book Description
Infrastructure is critical to economic development. When infrastructure companies are owned and operated by the government, however, they create significant sources of fiscal risk. These fiscal risks can be sizable, but they are often preventable with proper planning, risk assessment, and strict rules and procedures for corporate and fiscal governance. This paper examines fiscal risk stemming from state-owned enterprises (SOEs) in the infrastructure sector in a sample of 135 firms in 19 countries from an original database of SOE financials for 2009-18. The paper develops a typology of fiscal risks and their determinants, builds new measures of fiscal injections to SOEs, and documents them using the novel database. The results show that governments support SOEs through a remarkably wide range of fiscal instruments. The fiscal cost of supporting infrastructure SOEs is usually below 1 percent of gross domestic product. Support is more prevalent and frequent than previously thought. The findings show that fiscal risk stems not only from "tail risk, " but also from the everyday operation of infrastructure SOEs. The paper calculates the Altman Z" score (a measure of default risk) and shows that it can be used to forecast the need for fiscal injections in SOEs.
Author: Mr. Ernesto Ramirez Rigo Publisher: International Monetary Fund ISBN: 1513594087 Category : Business & Economics Languages : en Pages : 153
Book Description
Prior to the COVID-19 shock, the key challenge facing policymakers in the Middle East, North Africa, and Central Asia region was how to generate strong, sustainable, job-rich, inclusive growth. Post-COVID-19, this challenge has only grown given the additional reduction in fiscal space due to the crisis and the increased need to support the recovery. The sizable state-owned enterprise (SOE) footprint in the region, together with its cost to the government, call for revisiting the SOE sector to help open fiscal space and look for growth opportunities.
Author: Mr.Richard I Allen Publisher: International Monetary Fund ISBN: 1475551983 Category : Business & Economics Languages : en Pages : 21
Book Description
Many studies have highlighted how failures of public corporations (otherwise known as state-owned enterprises) can result in huge economic and fiscal costs. To contain the risks associated with these costs, an effective regime for the financial supervision and oversight of public corporations should be put in place. This note discusses the legal, institutional, and procedural arrangements that governments need to oversee the financial operations of their public corporations, ensure accountability for their performance, and manage the fiscal risks they present. In particular, it recommends that governments should focus their surveillance on public corporations that are large in relation to the economy, create fiscal risks, are not profitable, are unstable financially, or are heavily dependent on government subsidies or guarantees.
Author: International Monetary Fund. Fiscal Affairs Dept. Publisher: International Monetary Fund ISBN: 1513521675 Category : Business & Economics Languages : en Pages : 37
Book Description
This Technical Assistance Paper on Ukraine highlights that good progress has been made in improving the disclosure and management of fiscal risks since the embedding of fiscal risks in the Budget Code in December 2018. The mission refined the financial model to analyze risks relating to Naftogaz that had been developed on the October 2018 mission. Despite updating the assumptions, the modelling still shows that the anticipated loss of transit gas revenue will have a significant negative impact on the Ukraine budget from January 2020. Appropriate mitigating action could ameliorate this negative impact, but there will still be a significant reduction in the inflows to the budget from Naftogaz. The next steps recommended by the mission include that Naftogaz, Ukrainian Railways and Energoatom models should be discussed with the State-owned Enterprises (SOE) and refined and that coverage should be expanded to include other major SOEs.
Author: Ms. Anja Baum
Author: Ms. Anja Baum
Author: Ms.Anja Baum
Author: International Monetary Fund. Fiscal Affairs Dept.
Author: Hana Polackova Brixi
Author: Aldo Musacchio
Author: Aldo Musacchio
Author: Matias Herrera Dappe
Author: Mr. Ernesto Ramirez Rigo
Author: Mr.Richard I Allen
Author: International Monetary Fund. Fiscal Affairs Dept.