Economic security strategy of Ukraine in the context of global transformations

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Economic security strategy of Ukraine in the context of global transformations

Kyiv, Ukraine

Mazaraki Anatolii,

DSc (Economics), Professor, Rector of Kyiv National University of Trade and Economics

MELNYK Tetiana,

The article analyses theoretical and conceptual approaches to define the essence of economic security. The global economic transformations are characterized in the context of the impact on the national economic security. Indicators of all economic security components are analyzed by comparing them in dynamics with the critical level and proposals for the implementation of economic policy measures which are provided to secure Ukrainian economic policy.

Keywords: national economic security, globalization, global transformations, national economy.

The article submitted to editor's office on 12.11.2021.

Мазаракі А., Мельник Т. Стратегія економічної безпеки України в умовах глобальних трансформацій.

Постановка проблеми. Внаслідок прояву глобалізаційних та інтеграційних процесів у світі відбувається посилення і поява нових загроз економічній безпеці України, оскільки вплив глобалізації на економіку держав має неоднозначний характер і виявляється як у позитивних, так і негативних рисах. Крім цього епідемія COVID-19 стала, мабуть, найбільш серйозним, глобальним викликом для людства за останні десятиліття, наслідки якої призведуть до суттєвих змін в економічній і соціальній сферах, що визначатиме розвиток суспільства у найближчі роки. Зважаючи на рівень значущостьі нових викликів і небезпек, особливої актуальності набувають питання дослідження та виокремлення загроз, що найбільше впливають на економічну систему держави, а також обґрунтування основних заходів протидії цьому впливу.

Аналіз останніх досліджень і публікацій показав, що теоретичні та практичні аспекти забезпечення економічної безпеки широко розглядаються вітчизняними та зарубіжними вченими, проте залишаються відкритими питання щодо появи загроз економічній безпеці України, які спричинені глобалізаційними процесами у світі.

Метою статті є дослідження впливу сучасних глобальних трансформацій на економічну безпеку держави з аналізом відповідних викликів і загроз у контексті забезпечення наукового підґрунтя для зміни державної політики у сфері економічної безпеки.

Матеріали та методи. У процесі дослідження використано методи статистичного аналізу, синтезу, групування, табличного та графічного зображення результатів.

Результати дослідження. Розглянуто теоретичні та концептуальні підходи до визначення сутності економічної безпеки. Охарактеризовано глобальні економічні трансформації у контексті впливу на економічну безпеку держави. Проаналізовано індикатори всіх складових економічної безпеки шляхом їх зіставлення в динаміці з критичним рівнем та надано пропозиції щодо впровадження заходів економічної політики, спрямованих на протидію викликам та загрозам економічній безпеці України.

Висновки. Ефективність підтримання економічної безпеки держави в умовах глобалізації визначається: здатністю національної економіки забезпечувати економічний суверенітет країни та лідируюче положення в глобальному світі, а також адаптуватися до мінливих зовнішніх умов; наявністю достовірної системи оцінок економічної безпеки; спроможністю державних інститутів ефективно протидіяти виникаючим глобальним економічним загрозам, у т.ч. через підвищення ефективності управління.

В Україні майже відсутнє підґрунтя для забезпечення національних економічних інтересів, а вплив глобальної пандемії СОУЮ-19 лише поглибив внутрішні загрози економічній безпеці держави, серед яких погіршення стану державних фінансів, накопичення заборгованості держустанов, зростання обсягів неплатежів та погіршення стану інфраструктури тощо. Це, а також незадовільний стан більшості індикаторів економічної безпеки вимагають удосконалення системи державного регулювання у сфері забезпечення економічної безпеки, у зв 'язку з чим окреслено основні напрями протидії викликам та загрозам національній безпеці. economic security national covid

Ключові слова: економічна безпека держави, глобалізація, глобальні трансформації, національна економіка.

Background

Globalization is an evolutionary trend in society's development. Its impact on the economies of states is ambiguous and manifests itself in both positive and negative terms. On the one hand, globalization contributes to provide all subjects of world economic relations with equal market conditions and increases their chances of effective economic development by applying all the advantages of free movement of capital and productive forces. On the other hand, the differentiation of incomes of the population is growing, which provokes an aggravation of social conflicts, thereby weakening domestic and external protective potentials of economic security. Economic society and commodity security problems are aggravating and becoming global.

In addition, the COVID-19 pandemic has become perhaps the most serious, global challenge for humanity in recent decades. Its consequences will lead to significant changes in the economic and social spheres, which will largely determine the development of society in the near future. Among the significant challenges of the global corona crisis is the sharp increasein credit risks, which can provoke a full-scale debt crisis, as well as a significant budget deficit in developing countries, which will lead to an increase in their external debt dependence.

Without a strong and effective economy, it is impossible to properly ensure the level of national competitiveness, scientific and technical development, reliable defense capability, military and political stability of the country, effective social policy, harmony in the moral and spiritual life of society, information protection and the key to a safe environmental condition. Consequently, effective economic security (ES) of the state is the guarantor of its sovereignty, independence and territorial integrity. However, there is still ambivalence of scientific approaches to the formation of the theoretical and methodological basis for ES provision.

As a result of the globalization and integration processes in the world, new threats to the ES of Ukraine are increasing and emerging. Crisis phenomena in the country, along with political and economic instability, have led both to the strengthening of the negative impact of internal and external threats and to the creation of new ones. Therefore, given the level of importance of new challenges and dangers, the research and identification of threats are appeared and had the greatest impact on the national economic system, as well as the justification of the main counter - measures to this impact is emerged.

Analysis of recent research and publications

Theoretical, methodological and practical issues of ES are revealed in the works of A. Grinenko and A. Novikova [1; 2]. The sectoral aspect of economic security has been studied by A. Denisov [3], the processes of formation and provision of international ES are revealed in A. Gapeeva [4], and social aspects of economic security are investigated by T. Tokarsky [5].

As the analysis of theoretical research has shown, the problems of ES are also widely represented in the works of modern foreign scientists. In particular, we can note the article of I. Kremer-Matishkevich and J. Chernius [6], in which the theoretical foundations of ES are thoroughly investigated. Financial and energy aspects of economic security are given in the works of M. Popescu [7], P. Partasarati and other scientists studying its social components - the level of income and health of the population [8]. Also noteworthy is the work of S. Tanga, which proposes a rethinking of the country's ES due to the strengthening of globalization processes [9].

At the same time, the issue of threats to Ukrainian economic security caused by globalization processes in the world is becoming more urgent. Features of the transformation of the global system require constant monitoring of trends in the economic sphere, identification of the main risks and threats of ES, formulation of state measures which are directed to minimize and eliminate negative impact.

The aim of the article is to study the modern global impact transformations on the national economic security with the analysis of relevant challenges and threats in the context of providing a scientific basis for changing state policy in the field of economic security.

Materials and methods

The theoretical and methodological basis for writing the article composed the modern scientific concepts and theoretical developments on ES and security policy, the results of analytical studies of international organizations, statistical data of the State Statistics Service of Ukraine and the National Bank of Ukraine. Achieving the goals of the study and implementing the tasks involved the use of statistical analysis methods, synthesis, grouping, as well as tabular and graphical representation of the results.

Results

Theoretical foundations of economic security.

In accordance with the Law of Ukraine "On National Security of Ukraine", National Security of Ukraine is the protection of state sovereignty, territorial integrity, democratic constitutional order and other national interests of Ukraine from real and potential threats [10].

The ES of the state plays a leading role in the national security system. It significantly affects the economic sovereignty of the state, its financial stability, economic development, the implementation of effective social policy, the provision of society from environmental elements, the growth of nation- nal competitiveness in conditions of international economic interdepend- dence. The effective functioning of the ES system of the state allows timely identification of threats to national economic interests and prevention of damage to the socio-economic system as a whole. It is especially important to improve the economic security system for those countries that are in a transformational crisis with an aggravation of its inherent contradictions [11].

Currently, many approaches have been published in the scientific literature to determine security and other basic concepts related to the problems of this area: security, economic security, threat, risk, interest, damage, source of threat, subject of threat and object of threat. Specialists do not have unity in the interpretation of the concepts of "economic security" and "risk". Accordingly, the content of economic security and risk management activities (prevention, minimization, etc.) is understood differently. This problem is aggravated by the fact that the basic concepts of security - threat and risk - do not have sufficient normative certainty. At the same time, a clear alternative system of views can also be built in the modern sense of the term "economic security". For adequate forecasting and risk management, it is necessary to consider society as a large complex organizational system with a networkcentric, fractal structure and mechanisms of self-organization. Thus, for comprehensive risk analysis and strategic planning of national and public interests, the United States has created a strategic management environment that combines 50 states and 3 100 SPAS districts into a single set of federal-level strategies. There is a system of global information monitoring, monitoring of technology and market development, financial flows. 35 000 of the most successful innovative companies are constantly monitored. As part of deoff- shorization, a system of automatic information exchange on financial flows is being formed, which provides additional advantage to the countries with advanced intellectual processing of information flows. The EU has a world research center - the World Economic Forum (WEF) in Davos, which has 400 employees and attracts hundreds of external experts to conduct research on the future of mankind.

Summarizing the theoretical developments of national and foreign scientists, it is possible to distinguish individual and macroeconomic approaches to the study of ES (Figure 1).

Figure 1. Theoretical and methodological approaches to the interpretation of the term "economic security"

Source: summarized by the authors according to [12].

An individual approach (Figure1) to the interpretation defines human ES as the presence of a stable income and other sources to maintain a standard of living in the present and near future, that is constant solvency, estimated cash flow, effective use of human capital.

The formation of a macroeconomic approach has a complex history, as the period of its development coincides with the times of two world wars. In particular, the formation of such approach is supported by the Russian economic school, which tried to quantify ES using critical (threshold) values. This approach includes a model developed by Professor Lino Briguglio, who evaluates ESs taking into account the economic vulnerability and level of the country's sustainability.

The economic security of a household or individual is the object of research at the microlevel, in particular, the human ES is investigated by P. Partasarati (2014), J. Hacker and others. (2014), N. Hsi (2015), J. Maruti and D. Lewis (2016), focusing on the importance of savings and threats to the life quality of adults and the elderly [8; 13-15]. These scientists give a general definition of economic security: ensuring personal financial resources, social integration, health safety strategy, guaranteeing dignity and quality of life.

Studying household behavior, S. Mueller (2015) and I. Nam (2016) also emphasize that long-term economic security and family development depend to a large extent on savings and wealth accumulation. These scientists describe ES as a measure of individual or home ability [16; 17].

L. Maurice and L. Deprez (2013) analyze the financial resources, quality of life and women competitiveness of working age in the labor market of the United States, so their understanding of ES is greatly simplified and focused on the individual ability to be independent. In their opinion, economic security is a financial situation where a person can live the way he wants [A1], not the way he lives [18]. J. Queen and K. Kyle (2016) analyzed the impact of various measures of economic vulnerability on the overall situation of the individual economic security [19]. Thus, their definition of ES is similar to those already mentioned, that is, the availability of financial opportunities, solvency, social well-being and resistance to external threats.

The economic security of companies is analyzed at the microlevel. ES business structures are studied by G. Misko and A. Maluta (2015), N. Kasyanova and A. Kasyanov (2015), M. Baldzhi (2017). According to these scientists, EM is a condition where resources are effectively used to prevent threats and ensure the functioning and stable development of the company. They characterize ES as a combination of qualitative and quantitative indicators [20-22]. To achieve the highest level of ES, companies must ensure maximum safety of the main functional components. Researchers analyzing ES companies distinguish the following elements: finance, human resources, technology and innovation, political and legal environment, environmental ecology and information security.

Considering ES at the macrolevel, we can make assumptions about the economic security of the country.

Research by domestic and Russian scientists uses models for assessing the ES of the country or region on the basis of critical boundaries. In particular, K. Tokarev (2008) describes methods for determining the economic security of the state and identifies its three main indicators: economic, describing the level of development of the country's economy; social, determining the level of social development of the state; financial, assessing the policy of budgetary, credit and tax budgeting of the country [23]. H. Blinich- kina (2015) describes the conditions for economic security, proposes to calculate ES indices using the determinant system [24]. These scientists describe ES as the formation of economic sustainability using available resources. They also complement this definition by introducing ES as a prerequisite for the development of the national economy. C. Dadalko et al. (2017) argue that ES is one of the key functions of state regulation. Ensuring economic security leads to the implementation of other functions [25]. According to these researchers, EB support is especially necessary in times of crisis, as the number of risks and threats increases, and mechanisms to prevent them during the crisis lose efficiency.

Summarizing the ES study, several definitions can be given depending on the approach (Table 1).

Table 1

Approaches to the economic security interpretation

Source: summarized by authors [23-25].

Sue Moon Tang in his study "Rethinking Economic Security in a Globalized World" (2015) proposes to consider the concept of ES in the context of the impact of globalization. In his opinion, ES should be understood not only as sufficient financial support for survival, but also as combating poverty and unemployment, dangers and threats, as preventing legal violations and corruption. This is not only an existential issue - economic security should become a priority in the development of general state security [9].

In Ukraine, the normatively enshrined concept of ES can be found in the methodological recommendations for calculating the level of ES of Ukraine approved back in 2013. According to them, economic security is a state of the national economy that allows you to maintain resistance to internal and external threats, ensure high competitiveness in the world economic environment and characterizes the ability of the national economy for sustainable and balanced growth [26].

The recently adopted Economic Security Strategy lacks a specific definition of ES. It is considered from the point of view of implementing the priorities of national interests [27], which, in turn, involve sustainable development of the national economy, equal mutually beneficial economic cooperation with other states and Ukraine's integration into the European economic space.

Summarizing, we can cite such a comprehensive definition of economic security - an instrument of economic regulation (regulation mechanism), which helps to use available resources, provides a sufficiently high and stable growth trend in economic indicators, fights poverty and unemployment, expands social security, prevents loss of competitiveness, effectively solves economic needs, responds in a timely manner, neutralizes threats, forms national security.

Based on the results of the analysis of foreign and domestic theoretical research on this issue [15; 19; 22; 28-31], the conceptual foundations of the economic security of the state (Figure 2) are formulated, which in turn can be the basis for the methodology for assessing its level.

Figure 2. Conceptual principles of national economic security

Source: built by the authors on the basis of [15; 19; 22; 28-31].

Threats to economic security are phenomena and processes that negatively affect the country's economy and infringe on the economic interests of the individual, society and the state. Constant monitoring and identify- cation of the main threats of ES contributes to its maintenance at the proper level, as well as allows for the timely development and implementation of practical measures aimed at their elimination or minimization of the impact of threats [32].

The National Economic Security Strategy of Ukraine until 2025 identifies priority areas at which state policy measures in the field of countering and minimizing threats are aimed [27]:

• the financial security;

• the occupational safety;

• the foreign economic security;

• the Investment and innovative security;

• the macroeconomic security.

Modern global transformations.

The current state of the domestic economy is characterized by instability, the presence of a large number of threats that cause significant risks, undermine the possibilities of implementing the goals of socio-economic development, strengthening the country's defense capacity, in general creating economic problems to ensure national security. Any modern economic system at the country level is an open system, includes many interrelations between economic entities, various state and public institutions, the change and functioning of which takes place dynamically and non-linearly. These processes are mainly used by the most economically developed countries and transnational corporations (TNCs) to achieve their economic and political goals - globalization and the ideology of open markets allow you to quickly capture market sectors in different countries, suppressing local producers.

The transformation of the world economic system changes the idea not only of the patterns of globalization, but also of the mechanism of functioning of the economy of each individual state. Now no one denies that globalization is a key process influenced by the economy and politics of each individual country. There is growing reason to argue that the degree of integration of the state into the global economy depends on the interest of the global economic system in its market space and economic resources.

On the other hand, this statement could be denied, since there are quite a large number of states in the world that actively resist the integration process. In particular, these include Iran, Iraq, Afghanistan, North Korea. Indeed, the economic life of these countries is largely based on the principles of autarky. However, there is another point of view. The national economic policies of these countries adhere to the principles of autarky not only because their political leadership has made such a decision or has a clear need for it. The fact is that the leading countries of the global economic space have built a certain system that these states are almost unable to violate on their own. All their international economic contacts should be coordinated with the leading countries through different institutions; this is very clearly monitored when any unauthorized actions cease, both on the part of these states and on the part of those who would like to expand economic relations with them.

Thus, the essence of globalization in its modern understanding is to dramatically expand and complicate the interrelations and interdependencies of different states. This is a new stage of economic development, a new quality of relations between countries and their economies. Globalization consists of many deep transformations which take place in different areas of human activity (not only in economic activity). From this point of view, globalization is a system of new rules (and even barriers) between different countries and their economies. And this does not contradict to general understanding that globalization leads to a reduction in barriers between different economies, the rice in world production of goods and services in order to expand trade and other international exchange processes which are integrated and supranationally regulated by the world economy. Therefore, the essence of globalization is also considered as an increase in the interdependence of economic agents to the extent that the action of each of them affects the interests of everyone else and at the same time affects processes and phenomena in other (non-economic) fields of society. This opens up great opportunities associated with the rapid expansion of goods, information flows and the emergence of a broader interaction between states, firms and people than before. Scientific and technological progress also plays an important role in the field of transport, telecommunications and information technology. As well as the educational improving level of people, it contributes to the convergence of all modern world components: distances are reduced, new opportunities for transportation and communication arise, transaction costs associated with trade and financial transactions are significantly reduced.

As the result, the most important contradiction of globalization was revealed: this process as expands relative freedom for states and their economic entities as compresses it, bringing the economic entities actions not as to economic benefits as to compliance with certain, even unwritten rules. It is in this direction that scientists around the world have been investigated the problem of globalization in recent years.

The state of the country's inclusion in the world economy, namely the degree of globalization of the country, shows the KOF Index of Globalization calculated by the Swiss Economic Institute, consisting of three subindexes: economic globalization, social globalization and political globalization (Table 2). The economic component of the Globalization Index assesses the volume of international trade, investment and income received relative to GDP, the impact of restrictions imposed by the country on commercial and financial flows [33].

Table 2 World country ranking of globalization (KOFGlobalisationIndex - 2020)