Volume 04 Issue 11-2024
76
International Journal Of Law And Criminology
(ISSN
–
2771-2214)
VOLUME
04
ISSUE
11
P
AGES
:
76-79
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
ABSTRACT
this article examines the relationship of public credit as one of the links of the financial and credit system of the state
with other links and economic categories operating in this system. Their connections and interactions are shown.
KEYWORDS
Government credit, financial system, economy, regulation, internal and external debt, public debt.
INTRODUCTION
Public credit in Uzbekistan occupies an important place
in the system of financial instruments that ensure
macroeconomic stability and the development of
strategic industries. Government borrowing allows the
government to attract resources to cover budget
deficits, implement infrastructure and social projects,
and maintain the sustainability of the economy.
Against the background of economic reforms carried
out since the beginning of 2017, effective management
of public debt has become a key aspect of the country's
financial policy.
DISCUSSION AND RESULTS
So, a government loan is a set of economic relations in
which the state acts as a borrower, lender or guarantor
of debt obligations to attract additional financial
resources to the economy. Unlike other forms of
lending, public credit has a unique purpose: it serves as
a tool of state financial policy aimed at regulating
economic activity, supporting the budget balance and
ensuring stability in financial markets.
Dynamically changing conditions of economic
development enhance the importance of credit policy
instruments. Within the framework of such regulation,
Research Article
STATE CREDIT AS AN ELEMENT OF THE FINANCIAL SYSTEM OF THE
REPUBLIC OF UZBEKISTAN
Submission Date:
November 20, 2024,
Accepted Date:
November 25, 2024,
Published Date:
November 30, 2024
Crossref doi:
https://doi.org/10.37547/ijlc/Volume04Issue11-10
Kadirova Kamolakhon Azizjon Qizi
Areas Of Focus: Public Finance And International Finance, Graduate Student Of Tashkent State University Of
Economics, Uzbekistan
N.E. Jiyanova
Scientific Supervisor, Graduate Student Of Tashkent State University Of Economics, Uzbekistan
Journal
Website:
https://theusajournals.
com/index.php/ijlc
Copyright:
Original
content from this work
may be used under the
terms of the creative
commons
attributes
4.0 licence.
Volume 04 Issue 11-2024
77
International Journal Of Law And Criminology
(ISSN
–
2771-2214)
VOLUME
04
ISSUE
11
P
AGES
:
76-79
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
public debt management methods acquire a key role,
which become a central element of monetary policy. It
is assumed that through the effective use of credit
policy instruments and public debt management, the
state is able to form an optimal interest rate structure.
Public debt management should be focused on
ensuring economic stability, which implies the
flexibility of the state in the redistribution of financial
resources. During periods of economic growth, excess
resources can be directed to those areas and industries
that are in greatest need of them. The government can
replace long-term obligations while offering short-
term loans to market participants. During periods of
economic downturn, this approach makes it possible
to increase the volume of credit resources for long-
term loans, reduce market interest rates and stimulate
the growth of private investment.
Debt placement is a practice resorted to by both
developed and developing countries. The presence of
debt acts as an incentive for the state for economic
growth, optimization of budget expenditures,
development and implementation of effective tax
reforms, as well as creating conditions for increasing
investment activity. At its core, debt is financial
resources that one economic entity is obliged to return
to another within a specified period, taking into
account a certain fee.
In Western economics, debt is classified into public and
private debt. Public debt, in turn, is divided into public
debt (or sovereign debt) and obligations of lower-level
authorities, such as municipal debt[1].
In the Republic of Uzbekistan, according to Article 3 of
the Budget Code of the Republic of Uzbekistan, the
following definitions are given: "state borrowing is the
attraction of assets for which obligations of the
Republic of Uzbekistan arise as a borrower or
guarantor of repayment of loans (loans) of resident
borrowers", "state debt is obligations of the Republic
of Uzbekistan arising as a result of internal and external
borrowings" [2].
Within the framework of the financial system, public
credit plays an important role, ensuring the formation
and rational use of centralized monetary funds of the
state. These funds serve as a key source for financing
government needs, including covering budget deficits,
implementing strategic projects and maintaining social
stability.
As a type of loan, a government loan has a number of
specific characteristics that distinguish it from
traditional financial instruments such as taxes. The
main difference is that a state loan is a mutual financial
obligation, where the state acts as a borrower, lender
or guarantor, whereas taxes involve the unilateral
withdrawal of part of the income of citizens and
organizations in favor of the state.
So, the state loan has the following features:
- firstly, the state loan is voluntary. The state loan is
based on the voluntary provision of funds by investors,
unlike taxes, which are mandatory. This makes credit a
more flexible tool for resource mobilization;
- secondly, the state loan is characterized by
repayment and urgency. Funds raised through a
government loan are subject to repayment within a
certain period of time with interest payments, while
taxes are irrevocable;
- thirdly, government credit has a market nature.
Government credit is implemented through market
mechanisms, such as the issuance and circulation of
government securities, which contributes to the
development of the financial market.
Volume 04 Issue 11-2024
78
International Journal Of Law And Criminology
(ISSN
–
2771-2214)
VOLUME
04
ISSUE
11
P
AGES
:
76-79
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
- Fourthly, the existence of a dual role of the state.
Thus, in the system of public credit, the state can act as
a borrower, as well as a lender or guarantor, depending
on the situation and goals [3].
A government loan is different from other types of
credit. Thus, public credit differs from other types of
credit primarily by participants and goals. Unlike
private loans, where borrowers and lenders are
individuals or organizations, in a public loan, one of the
parties is always the state. It is used to finance socially
significant projects, cover budget deficits and stabilize
the economy, while private loans are usually directed
to meet personal or corporate needs.
Public credit attracts large amounts through the
issuance of bonds, international loans or domestic
loans, which makes it a large-scale tool for the
implementation of government tasks. Unlike a private
loan,
where
obligations
depend
on
the
creditworthiness of the borrower, a public loan is
secured by government guarantees, which makes it
more reliable.
Thus, the key principles of public credit are repayment,
urgency, payment and security. Repayment implies
that the funds raised through the loan must be
returned within the prescribed period. Urgency means
that the loan has a certain repayment period, after
which the state is obliged to repay the borrowed funds.
Payment assumes that the state is obliged to pay
interest for the use of borrowed funds. The security lies
in the fact that the state loan is guaranteed by all the
property of the state, which makes it one of the most
reliable instruments in the financial system.
Additionally, the state loan is characterized by a high
degree of trust on the part of investors, which makes it
possible to attract significant amounts of financial
resources. These principles help to maintain the
financial stability of the state, ensure the stability of
the economic system and solve key tasks such as
financing infrastructure projects, developing the social
sphere and supporting economic growth.
As an economic category, public credit performs three
key functions: distributive, regulatory and control.
The distribution function. Public credit allows the
redistribution of financial resources between different
sectors of the economy, regions and social groups. This
is done by attracting funds from the public, businesses
or international investors to finance government
needs. For example, money received through the
issuance of bonds or other credit mechanisms can be
directed to social programs, infrastructure projects,
education and healthcare development. Thus, public
credit contributes to the redistribution of resources in
favor of socially useful goals.
The regulating function. Government credit is actively
used as a tool for regulating the economy. It allows the
government to manage the money supply, interest
rates and liquidity in the country. During periods of
economic recovery, government credit can be used to
stabilize the market situation and attract additional
funds to expand infrastructure. In times of economic
downturn or crisis, government credit can help
maintain liquidity, stimulate private investment, and
reduce economic pressure. This is an important
function that helps the state to pursue a flexible
economic policy depending on the situation.
The control function.The state loan also performs a
control function, monitoring the use of attracted funds
and their effectiveness. Credit transactions, especially
in the domestic and foreign markets, are subject to
strict government regulation to prevent abuse and
ensure that funds are used for their intended purpose.
In this context, the State, through various financial and
Volume 04 Issue 11-2024
79
International Journal Of Law And Criminology
(ISSN
–
2771-2214)
VOLUME
04
ISSUE
11
P
AGES
:
76-79
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
supervisory authorities, monitors debt obligations,
monitors compliance with the terms of loan
agreements and monitors the fulfillment of debt
repayment obligations. This helps to maintain financial
discipline and economic stability.
CONCLUSIONS
Thus, public credit relations can be considered as a
complex component of the financial system for several
reasons. First, if we consider the financial system in
material terms, it can be argued that funds raised
through a government loan are part of both
centralized funds (for example, in the case of external
loans) and decentralized funds (for example, when
issuing government securities). Secondly, if we
consider the financial system as a set of public
relations, we can conclude that relations related to
public credit are part of both the processes of
formation of centralized funds and the processes of
formation of decentralized funds. Thirdly, since public
credit is an integral part of the financial system, it is
possible to extrapolate conclusions about the impact
of both direct and feedback links on financial flows in
general.
REFERENCES
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M.: Unity-Dana, 2015. - 783 p.: tables, graphs,
diagrams - bibliogr. in the book. - ISBN 978-5-238-
01529-3. An electronic resource. Access mode:
http://biblioclub.ru/index.php?page=book&id=1148
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The Budget Code of the Republic of Uzbekistan. An
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resource.
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https://lex.uz/docs/2304140
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Abramova M. A. Money, credit, banks. Money and
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Avagyan, T.M. Khanina, T.P. Nosova.
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