RESTRUCTURING OF UKRAINE’S EXTERNAL DEBT: INTERNATIONAL EXPERIENCE AND STRATEGIC IMPERATIVES OF DEBT SUSTAINABILITY
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Abstract
Introduction. The study of international practices in external debt restructuring, the use of macroeconomic indicator-linked instruments, and debt sustainability mechanisms constitutes a necessary prerequisite for developing a long-term debt strategy for Ukraine amid martial law, heightened macrofinancial instability, and constrained access to international capital markets.
Purpose. The purpose of the article is to substantiate effective instruments and mechanisms of external debt restructuring based on international experience and to identify key strategic imperatives for improving Ukraine’s debt policy in the context of ensuring long-term debt sustainability.
Results. The article analyzes the dynamics and structure of Ukraine’s external public and publicly guaranteed debt, revealing an increasing dependence on official international creditors, heightened currency and fiscal risks, and growing vulnerability of the debt position in the medium term. It is demonstrated that external debt restructuring represents a critical instrument for maintaining debt sustainability under conditions of full-scale war, macroeconomic volatility, and limited access to private financial markets. International experience in external debt restructuring is systematized, and innovative debt management instruments are identified, along with an assessment of their applicability within the Ukrainian context.
Originality. The study proposes a new financial instrument—National Debt Investment Certificates (NDICs)—conceptualized as a hybrid mechanism that combines external public debt servicing with the mobilization of domestic investment resources, enabling citizens and national investors to participate in financing strategically important development and reconstruction projects. Through this mechanism, risk is effectively shared, as payments on the certificates are linked to project-generated revenues, thereby allowing the state to reduce its fixed debt burden.
Conclusion. Contemporary international practices of external public debt restructuring are examined, and their relevance for ensuring Ukraine’s debt sustainability under conditions of full-scale war is substantiated. The feasibility of applying innovative external debt management instruments is justified, including debt-for-reconstruction, debt-for-environment, and debt-for-innovation mechanisms, catastrophe (war) bonds, and floating-rate instruments. These approaches enable the transformation of traditional debt obligations into targeted, adaptive financial mechanisms that enhance fiscal resilience and support sustainable post-war economic recovery. Based on the conducted analysis, the imperatives and specific mechanisms for managing Ukraine’s debt sustainability have been proposed.
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