INTERNATIONAL INSTITUTIONAL FINANCING OF THE STRATEGIC STATE-OWNED ENTERPRISES ON THE BASIS OF MODERN SMART-CONTRACT TECHNOLOGY

Abstract

The modern mechanisms of raising the financial resources on international capital markets, covering debt financing and share participation, are analyzed. The financing by the international financial institutions is reviewed separately. It is noted that strategic state-owned enterprises are limited in terms of the choice of mechanisms for raising capital in the equity and debt securities markets due to preventing (i) the growth of the share of foreign capital in strategic sectors of the economy, as well as (ii) an increase in the level of the state-guaranteed debt limited by the criteria of the IMF program.
A universal mechanism of international institutional financing of the strategic state-owned enterprises based on modern smart-contract technology is proposed. It is shown that the appropriate mechanism will overcome the institutional barriers for the implementation of an investment project funded by the IFIs in terms of improving approaches to institutional support for the implementation of bilateral agreements. The author outlines universal markers of economic efficiency and transparency that will activate the revolving financing mechanisms, automatically identifying opportunities for continuing cooperation between the MFI-donor and the state-owned enterprise-recipient on the pre-contracted terms. It is emphasized that the smart-contract design allows neutralizing the influence of political pressure on the decision-making process regarding the allocation of the next tranches of funding through automatization processes and thanks to well-defined markers that are consistent throughout the contract period and cannot be changed depending on the change in the balance of political power. It is known that the Blockchain technology, which is the basis of a smart-contract, allows leveling off of the risks associated with corrupt mechanisms by eliminating the human factor from the decision-making scheme, making thus mutually beneficial contractual relationships between key persons impossible within the decision-making system. At the same time, certain shortcomings of the proposed technology are noted, namely, the lack of flexibility of the smart-contract design after the inclusion of basic information to the Blockchain register. The role of smart-contracts in adapting the mezzanine financing to the needs of a strategic state enterprise in the context of creating prerequisites for managing externalities is considered.