PODCAST #027 CONEXÃO CIDADÃO - DÍVIDA PÚBLICA

TCE Ceará

17 Jun 202111:24

Summary

TLDRThe video script discusses the critical topic of public debt, highlighting its importance and the constitutional provisions for federal intervention in states' finances. It delves into the concept of public debt, its classifications, and the factors influencing the debt situation in the state of Ceará. The script also features an interview with Professor Paulo Mattos, an expert in public finance, who provides insights into public debt management, the state's economic growth, and the challenges of external debt exposure. Additionally, it touches on the National Program for Corruption Prevention launched by the Union Court of Accounts to implement control mechanisms and combat corruption in public management.

Takeaways

📜 The public debt is a recurring topic in the news and is so important that the Constitution Federal of 88 includes it as one of the few cases where the Union can intervene in the states to reorganize finances when a state suspends public debt payments for more than two consecutive years.
🏦 Public debt is a set of obligations of governments with third parties, which can be contractual debts through loans or by issuing public securities, and can be long-term (fund debt) or short-term (floating debt).
🌐 Public debt can be classified by origin as internal or external, with external debt being in foreign currencies like the dollar or euro.
📊 The state of Ceará's public debt has been analyzed in technical notes produced by the Fiscal Monitor project from the Plácido Castelo Vale Institute, highlighting the importance of monitoring and managing public finances.
🎓 Professor Paulo Mattos, an expert in public finance with a doctorate from Fundação Getúlio Vargas, discussed the public debt process and the situation in Ceará, emphasizing the role of public investment in social well-being and economic growth.
💼 Governments often contract debt to finance public works, especially in areas where private initiative is lacking, such as basic sanitation, which is a social necessity that the state must provide if the private sector does not.
💡 The management of public debt involves various indicators, including solvency, transparency, resilience to economic shocks, average debt term, and cost.
📈 The state of Ceará has been growing economically, but there is a concern about the increasing external debt, which is mostly dollar-denominated and subject to exchange rate fluctuations.
🚨 Ceará is a leader in external debt relative to its size, which makes it vulnerable to exchange rate changes and requires careful financial management to protect against potential risks.
🛡 The state's external debt is around 97-98% dollar-linked, which requires strategies to mitigate the impact of exchange rate volatility.
📉 Despite the challenges, Ceará's debt situation is still within manageable limits, with the net consolidated debt per capita far from the alert or ceiling levels, suggesting ongoing monitoring and proactive management are necessary.

Q & A

What is the recurrent topic in the news related to the Brazilian Federal Constitution of 88?
-The recurrent topic is public debt, which is so important that one of the very few scenarios in the Brazilian Federal Constitution of 88 where the Union, via the federal government, can intervene in the states is to reorganize finances when a state suspends public debt payments for more than two consecutive years.
What is the basic concept of public debt according to the script?
-The basic concept of public debt is a set of obligations of governments with third parties, whether federal, state, or municipal, through loans known as contractual debt or by issuing public securities.
What are the two main classifications of public debt mentioned in the script?
-The two main classifications of public debt are based on the term, which can be long-term (consolidated debt) or short-term (floating debt), and based on the origin, which can be internal or external.
What is the difference between internal and external public debt?
-Internal public debt occurs in the domestic currency, while external public debt is in foreign currencies such as the dollar or the euro.
What is the Monitor Fiscal project and how does it relate to the state of Ceará's public debt?
-The Monitor Fiscal project is a research initiative of the Institute Plácido Castelo Vale that produces technical notes analyzing the state of Ceará's public debt. Its activities were mentioned in episode 21 of Conexão Cidadão, focusing on the chief scientist program.
What did the technical note #7 of the Monitor Fiscal analyze regarding the state of Ceará?
-The technical note #7 analyzed the relationship between debt and the economic growth of the state of Ceará and is aligned with studies conducted by Professor Paulo Mattos from the Federal University of Ceará.
What is the main reason for governments to incur public debt?
-Governments incur public debt mainly because investment in public services can be crucial for economic growth and social indicators, especially in areas where the private sector cannot or does not invest, such as basic sanitation.
How can public debt be managed according to the script?
-Public debt can be managed by monitoring various indicators such as solvency, transparency, resilience to economic shocks, average term and cost of debt, and the flow of interest and amortization payments.
What is the current situation of Ceará's public debt in terms of external and internal debt?
-Ceará's public debt situation has been analyzed, with external debt accounting for approximately 97-98% of the total consolidated debt, which is mostly dollar-denominated and thus subject to exchange rate fluctuations.
What is the National Program for the Prevention of Corruption in Ceará and how does it aim to combat corruption?
-The National Program for the Prevention of Corruption in Ceará is an initiative of the Union's Court of Accounts aimed at public managers to implement control and prevention mechanisms. It provides a self-assessment tool with guidelines and trainings to identify and address corruption-prone areas.
How does the National Program for the Prevention of Corruption in Ceará help public managers?
-The program offers public managers the opportunity to answer a questionnaire with 45 questions, and the system generates a diagnosis that helps in building action plans. Partners of the control networks then offer models and trainings for the implementation of these plans.

Outlines

00:00

📊 Public Debt and Its Management

The first paragraph discusses the significance of public debt, highlighted by its constitutional importance and the potential for federal intervention in state finances. It outlines the basic concept of public debt as obligations of governments to third parties, either through contractual debt or the issuance of public securities. The paragraph also differentiates between long-term funded debt and short-term floating debt, as well as internal and external debt. The situation of public debt in the state of Ceará is analyzed, referencing the Fiscal Monitor project's technical notes, which were previously mentioned in a TV program. The discussion invites Professor Paulo Mattos, an economist with expertise in Public Finances, to talk about the process of public indebtedness and the state's debt situation, emphasizing the role of public investment in economic growth and social indicators, especially in the Northeast of Brazil.

05:01

📉 Debt Management Indicators and Ceará's Economic Vulnerability

The second paragraph delves into the management of public debt, presenting various indicators used to monitor it, such as solvency, transparency, and resilience to economic shocks. It discusses the importance of understanding the average term and cost of debt, as well as the state's ability to cover payments for interest and amortization. The paragraph expresses concern over Ceará's leadership in external debt relative to its size, with a significant portion of its debt linked to the US dollar, making it susceptible to exchange rate fluctuations. The discussion notes that while Ceará has been growing economically, its debt is increasingly external, which poses a vulnerability that needs to be addressed. The paragraph concludes with an overview of Ceará's debt situation, indicating that despite being far from alert limits, continuous monitoring and strategies to mitigate external debt exposure are necessary.

10:01

🛡️ National Program for Corruption Prevention in Ceará

The third paragraph shifts focus to the issue of corruption, starting with a stark statistic about Brazil's position in the corruption perception index and the economic impact of corruption. It introduces the National Program for Corruption Prevention in Ceará, an initiative by the Union's Audit Court aimed at public managers to implement control mechanisms. The program offers a self-assessment tool with guidelines and training to identify corruption-prone areas. Public managers in Ceará can use this tool to evaluate their practices and develop action plans. The paragraph mentions the involvement of the Ceará Audit Court's External Control Deputy Secretary and provides information on how to access the program for further participation, emphasizing the continuous development of the tool for broader engagement.

Mindmap

Keywords

💡Public Debt

Public debt refers to the money owed by a government to its creditors, which can be either domestic or foreign entities. It is a central theme in the video, discussing its importance and the specific case of the state of Ceará in Brazil. The script mentions the constitutional provision for federal intervention in states that default on their public debt for over two consecutive years.

💡Constitutional Federal

The term 'Constitutional Federal' is used in the context of the Brazilian Constitution of 1988, which outlines the conditions under which the federal government can intervene in state finances, such as reorganizing finances when a state has suspended debt payments.

💡State Financial Reorganization

State financial reorganization is the process of restructuring a state's finances when it is unable to meet its debt obligations. The video script discusses this as one of the very few scenarios where the federal government can intervene in state affairs.

💡Public Debt Contractual

Public debt contractual is a type of public debt that arises from loans or financing agreements made by the government. The script explains that this form of debt constitutes the majority of the state's debt obligations.

💡Long-term and Short-term Debt

The script differentiates between long-term debt, which is part of the funded debt, and short-term debt, known as floating debt. These terms are used to classify the duration of the financial obligations of the state.

💡Domestic and External Debt

Domestic debt is debt incurred in the local currency, while external debt is in foreign currencies like the dollar or euro. The video discusses the state of Ceará's external debt, which is a significant concern due to its exposure to exchange rate fluctuations.

💡Fiscal Responsibility

Fiscal responsibility is the obligation of governments to manage public finances prudently and transparently. The script mentions that public debt is part of the government's accountability, which is assessed by audit courts.

💡Economic Growth

Economic growth is a key factor in the video's discussion about the relationship between debt and economic development. It is mentioned in the context of the state of Ceará's debt and its impact on the state's economic health.

💡Financial Management

Financial management of public debt involves strategic planning and oversight to ensure debt sustainability. The script discusses various indicators used to monitor public debt, such as solvency, transparency, and resilience to economic shocks.

💡Exchange Rate

The exchange rate is the value of one country's currency in terms of another. It is relevant in the video's discussion of external debt, as the state of Ceará's debt is largely dollar-denominated, making it susceptible to exchange rate fluctuations.

💡National Program for Corruption Prevention

The National Program for Corruption Prevention is an initiative mentioned in the script, aimed at combating corruption through the implementation of control mechanisms and good governance practices. It is a recent program launched to raise awareness and provide tools for public managers.

Highlights

Public debt is a recurring topic in the news and is so important that one of the few scenarios in the 1988 Federal Constitution for the Union to intervene in states is to reorganize finances when a state suspends public debt payments for more than two consecutive years.

Public debt is one of the items in the government's accountability that is assessed by the courts of accounts.

Basic concept of public debt is the set of obligations of governments with third parties, such as federal, state, or municipal governments, through loans or issuance of public securities.

Public debt can be classified as long-term, forming the funded debt, or short-term known as floating.

Public debt can also be classified by origin as domestic or external, with external debt occurring in foreign currencies like dollars or euros.

The state of Ceará's public debt has been analyzed in technical notes produced by the Fiscal Monitor project of the No Pesque research core at the Plácido Castelo Vale Institute.

The Fiscal Monitor's activities were mentioned in episode 21 of Conexão Cidadão about the chief scientist program.

Fiscal Monitor Technical Note No. 7 analyzed the relationship between debt and economic growth in Ceará, aligning with studies conducted by Professor Paulo Mattos of the Federal University of Ceará.

Professor Paulo Mattos, with a doctorate in economics from Fundação Getúlio Vargas, has numerous scientific works in the field of public finance and was a speaker at the 13th PSDB edition on Ceará's public finances.

States can contract debt in three main ways: obtaining loans or financing from national or foreign creditors, through precatory payments, and through renegotiation of debts.

Investment in public works is important for growth, especially in Brazil, where the private sector cannot cover all social well-being needs, and the state must step in to complement the market.

Managing public debt involves monitoring indicators such as solvency, transparency, resilience to economic shocks, average debt term, and cost.

Ceará is a national leader in financial diplomacy, with a significant portion of its debt being external and largely dollar-denominated, raising concerns about exchange rate fluctuations.

Ceará's public debt situation has been growing, with external debt accounting for about half of it, posing a vulnerability that needs to be addressed.

In 2020, Brazil ranked 94th in the corruption perception index, with corruption estimated to cost between 160 and 365 billion reais annually.

A solution to combat corruption is the integration of control bodies, managers, and society, with the launch of the National Corruption Prevention Program in Ceará by the Union Court of Accounts.

The National Corruption Prevention Program offers a self-assessment tool with guidelines and trainings for implementing control and prevention mechanisms.

The program aims to help managers identify corruption-prone points through a questionnaire and generate action plans with the support of control network partners.