№ 5/2017

Fìnansi Ukr. 2017 (5): 63–75

FINANCIAL AND ECONOMIC REGULATION

BILOUSOVA Olena ¹

¹SI “Institute for Economics and Forecasting Ukrainian National Academy of Science”

Enhanced role of public investment in the modernization of the real sector of Ukrainian economy

The paper investigates theoretical aspects and practice of public investment. The European experience on creation of preconditions for increasing the efficiency of public investment is generalized. The author identifies the trends of public investment in Ukraine and analyzes its effectiveness and suggests ways to improve public investment management based on best foreign practice. It is found that public investment can provide: the formation of economic infrastructure, the activation of private investment through co-financing of modernization and innovative investment projects, an increase in aggregate demand due to short-term financial leverage, whose ratio may vary depending on the state of the economy. The approaches to ensuring co-financing of these projects by the state and enterprises are substantiated in line with national priorities. The author defines the key tasks to transform public investment into the real sector of the Ukrainian economy such as the activation of reproductive processes on an innovative basis, which provides for the allocation of financial resources to achieve strategic goals, including the modernization of industry, improving the efficiency and effectiveness of capital investment (through increased investment, economic returns and investment payback, the use of the budgetary and credit mechanism), and increased financial interaction with enterprises and other private investors. The article deepens the provisions of the budgetary and credit mechanism for the implementation of the public investment policy. It is determined that the application of this approach requires amendments to the Budget and Economic Codes of Ukraine, other regulatory and legislative acts, namely an assessment of investment risks, costs and benefits of the state investment project; procedures for termination of financing, sale of shares in unfinished projects in cases where the fiscal risks of budget losses exceed the permissible level determined in the preparation of the innovative investment project.

Keywords:public investment, public investment management system, efficiency of public investment, innovative investment projects, co-financing of modernization projects.

JEL: G32, G38, H54, Н83.

Bilousova O. . Enhanced role of public investment in the modernization of the real sector of Ukrainian economy / O. . Bilousova // Фінанси України. - 2017. - № 5. - C. 63-75.

Article original in Ukrainian (pp. 63 - 75)

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