Financing Sustainable Development Amid the Crisis of 2020. A Research Note

Popkova, Elena G.; Oudah, Al-Muttar Mohammed Yousif; Ermolina, Liliya V.; Sergi, Bruno S.

Purpose: The purpose of this chapter is to study the problem of sustainable development financing in the conditions of the budget deficit and investment collapse during the 2020 crisis and to determine the perspectives of solving this problem. Design/Methodology/Approach: The authors determine regression dependence of the sustainable development manifestations on the possibilities of sustainable development financing: state budget surplus as the difference between revenues and expenditures, government debt, and volume of private investments. Forecasts of change of the indicators’ values, which characterize the opportunities for sustainable development financing, are developed. The established regression dependence helps to determine the consequences for sustainable development. Findings: A forecast of financing and sustainable development amid the crisis of 2020 is compiled. The budget deficit will be more vivid (surplus budget will decrease by 220.61%, and government debt will grow by 85.42%); the investment will shrink by 41.96%. State financing has more significant influence (regression coefficient equals 379.34 for state budget surplus and 67.41 for government debt on average); private investments (regression coefficient is −266.64 on average). Originality/Value: A far-reaching influence of deficit of financing for sustainable development is moderately negative on the whole – the expected decrease of all indicators of sustainable development under the control of the 2020 crisis compared to 2019, will constitute −0.55%. The perspectives of solving the problem of sustainable development financing in the conditions of the budget deficit and investment collapse under the influence of the 2020 crisis are connected to balancing the revenues and expenditures of government debt, limitation of borrowings, reduction of the volume of government debt, and attraction of investments in economy and restriction of their outflow.