Read the original text at epravda.com.
In July, Ukrainian TV comedy production team Kvartal 95 performed its project of music and laughter "Made in Ukraina." During the show, in one of its hosts Volodymyr Zelensky parodied President Poroshenko and compared Ukraine with porn actress. "Ukraine reminds of the German actress in adult movies," he said; this joke caused outrage among users of social networks now. Later, the comedian wrote on his page on Facebook that the joke that caused a stormy debate does not have two or three meanings. “It is a joke about the actions of our rulers, our power, not about people and not about our country. Do not try to be cultural archaeologists and seek in the works of Kvartal 95 something that does not exist. We love our country and with each of our programs fight for its freedom, freedom of speech,” Zelensky stated.
Is Ukraine’s debt reducing?
The main argument of those who condemned Zelensky’s joke became infographics taken from the official website of the National Bank of Ukraine.
It really shows that Ukraine's gross external debt decreased. In recent years, the gross debt of Ukraine decreased by more than 20 billion dollars. But this is a deliberate manipulation, because the main problem of Ukraine is the national debt, not the gross external one.
Gross external debt includes all types of debts of Ukraine’s residents. In simple words, it is not only the state debt, but this is also a debt of all the economic entities.
Why gross external debt decreased?
There are several major reasons for it. Parent foreign banks in recent years have had to capitalize their subsidiaries in Ukraine. Often they did not transfer to Ukraine "real money," but simply converted their loans that were previously granted to Ukrainian daughters in their capital. Thus debts became investments. In addition, gross debt reducing may indicate outflows of investment. But in many cases it may be false investment, and funds withdrawn from Ukraine and wound up again by other jurisdictions, through Cyprus.
Gross government debt reduce is not a good sign, because it means an easy outflow of capital from the country, which increases pressure on the currency market.
What happened to the public debt?
In 2013, it amounted to 73.1 billion dollars, in 2014 - 69.8 billion dollars, in 2015 - 65.3 billion dollars. A win? Unfortunately no. It is also a kind of manipulation. In 2013, Ukraine's debt denominated in the national currency (domestic debt) amounted to 29.4 billion dollars. At the end of 2015 - 19.5 billion dollars. That is, it fell in statistics at 10 billion dollars, but in fact the national debt in the national currency increased by hundreds of billions.
In early 2014, there were only 252 billion UAH bonds in circulation. Now this number reached to 553 billion. That is, governments of Yatsenyuk and Groisman borrowed (printed) T-bills in the amount of 300 billion UAH. For comparison, the government of Azarov in 2010-2014 lent 165 billion in the domestic market.
Thus, the statistical effect of devaluation allows you to manipulate with numbers.
In addition, the debt in foreign currency (foreign debt) for the period 2013-2016 years also increased by 2.2 billion dollars - from 43.8 billion to 46 billion.
An average Ukrainian
In 2013, every Ukrainian owed 12,873 UAH. Now in 2016, every Ukrainian owes already 38,853 UAH. But in 2004 every Ukrainian had owed 1,793 UAH. In simple words, Ukrainian pay the money from their direct and indirect taxes.
Overall, 34% of the total public debt are the internal borrowing. And external debts would remind about themselves in a few years.
What will happen when have to pay the foreign debt? Problems of public debt are usually measured by the Maastricht Treaty. Thus, it should not exceed 60% of GDP.