Global experience in public debt reduction (on example of Sweden, Switzerland, and Iceland)

Abstract

Public debt reduction is one of the main objectives of budget policy formation in the current crisis conditions. In this regard, the study of the experience of different countries in this area is relevant. Therefore, the aim of the study was to provide recommendations for reducing the debt burden in the Kyrgyz Republic, based on the experience of other countries. The main methods used in the research were historical, comparison and generalisation. The study analysed the factors affecting the reduction of public debt in the Kyrgyz Republic. It was concluded that the components that can help affect the debt burden in the country are inflation, economic development, and a targeted policy of the state to pay debts. It was shown that in the current realities, countries that are successful in this direction most often use the latter approach. In addition, the situation in Sweden, Switzerland and Iceland was analysed directly and the main recommendations were given as to how the Kyrgyz Republic can improve its current situation in terms of debt reduction. These recommendations focused primarily on fighting corruption and improving the situation in the context of institutional development, as well as reducing expenditures to achieve a budget surplus. It was recommended not to increase taxes directly to increase state revenues, but to increase the efficiency of their collection. The data obtained from the results of the study can be used to formulate public policy in the area of public debt and budget management both in the Kyrgyz Republic and in other countries.