Efficiency of management on the economic development of the regions of Ukraine in the conditions of wartime

Source: Compiled and calculated by the authors based on (Official website of the State Statistics Service of Ukraine, 2022)

The monetary base shows a negative trend during the entire studied period. In 2020, this figure decreased by UAH 64,932.2 million or by 9.3 %, in 2021 this figure decreased by UAH 33,236.9 million or by 5.3 %. Cash in circulation shows a reverse trend and its volume increases annually. In 2020, by 2,533.7 million UAH, in 2021 by 17,205.9 million UAH. A trend towards stable growth was observed in relation to indicators of transferable deposits of depository corporations and transferable deposits of other sectors of the economy during the entire studied period (Vdovenko & Titov, 2019).

The large-scale military aggression of the Russian Federation caused a number of threats and challenges that persist to this day, and a final assessment of their consequences is practically impossible. These negative points, which will have a long-term effect on the economy of the region, concern primarily resources - potential and real (https://www.ukrstat.gov.ua/).

According to studies by financiers, spending on national defense and the rule of law, as well as spending on social assistance to displaced people, has increased significantly. There is an increase in the budget deficit of all levels due to the disproportion between income and expenditure. According to data (In April, revenues of the consolidated budget continue to fall 2022), as a result of a decrease in tax revenues and introduced tax benefits, the revenues of the consolidated budget in April? 2022 decreased by 18 % (23.9 billion UAH) to 109.4 billion UAH. Tax revenues in April were 23 % (23.4 billion UAH) less than a year ago and amounted to 77.3 billion UAH, personal income tax - by 5 %, i.e. (1.3 billion UAH) less than in 2021, VAT on imported goods accounted for 28% (7.9 billion UAH) of revenues in April 2021, import duty - 8 % (0.2 billion UAH); internal excise duty decreased by 74 % (5.4 billion UAH), import - by 36 % (2.4 billion UAH). To all this, we add the fixed exchange rate of foreign currencies and inflation caused by objective and speculative price increases.

So, for example, with regard to the front-line Kharkiv region, you can learn from the website of the State Statistics Service that in the first half of 2022, the regional volume of foreign trade of the Kharkiv region amounted to 421 million US dollars, which is 52 % of the volume for the first half of last year (that is, almost twice). According to the State Statistics Service, 118,270 individual entrepreneurs were registered in the Kharkiv region by mid-summer, while there were 116,670 as of January 1, 2022.

On the other hand, it is not known what their current turnover is and how actively they work. Another problem (which again relates to the open data crisis) is that the total number of FOPs of Ukraine on the website of the State Statistics Service is 1.38 million, but the website opendatabot.ua in the "Foponomics" section claims that there are currently 1.99 million. a rather large deviation, which calls into question the official number of working entrepreneurs in the Kharkiv region (https://cost.ua).

The second observation is the actual reduction of the budget compared to 2021. In the first half of last year, the city budget received 8.2 billion hryvnias, now - 7.6 billion hryvnias (it is worth remembering about the depreciation of money itself).

A reduction in the expenditure part is more likely - UAH 7.5 billion in the first half of 2021 against the current UAH 5.3 billion in 2022 against UAH 1.43 billion for the same period last year). And the most significant is the "reduction" of local taxes and fees - by more than UAH 510 million. (in particular, taxes on immovable property - rent from legal entities, land tax and real estate tax). It is worth noting that the revenues of the single tax to the city budget remained approximately at the level of last year (1.43 billion now and 1.37 billion last year).

Although military actions naturally seem to be the most influential factor in the implementation of local budgets, the indicators in this chart, for example in Mykolaiv and Ivano-Frankivsk, show that it is not the only factor. First, the war factor probably correlates more with the expenditure than with the income component (lowest percentage in Chernihiv, Kharkiv, Kyiv, Mykolaiv, and Sumy). And secondly, the degree of budget implementation is not a direct reflection of the state of the city's economy, but rather an important parameter of the city's "fiscal capacity" - whether residents have lost official incomes, whether workplaces have closed, whether legal entities and individuals pay property taxes, etc. And, unfortunately, Kharkiv lost the most in this "tax capacity" of all regional centers (https://lb.ua/blog).

Therefore, the management of the regional economy requires immediate action, and therefore, first of all, it is necessary:

development of a new approach to fiscal and economic regulation of political processes, in particular reorientation of partial management of local taxes to territorial management, directing investment funds to the development and improvement of the economy of regions, cities and towns located in the war zone;

- a more flexible approach to the development of strategic plans for a shorter period and the determination of effective tactical measures, and it is possible to develop several options taking into account current events and after the end of the war with the aggressor;

- reforming the administrative-territorial system, revising the creation of territorial communities, especially in the regions most affected by the attacks of the occupiers;

- business support from the state (relocation of enterprises), in particular, the adoption of a number of laws and regulatory documents that would more effectively organize the processes of relocation of enterprises and contribute to increasing the mobility of the workforce. It will also create new jobs for immigrants;

- strengthening cooperation with donor organizations of European countries in the development and modernization of the infrastructure of individual municipalities, as well as preparation for the implementation of post-war socio-economic development projects (Kibik et al., 2022).

The process of economic policy under martial law requires constant adjustment of the economic management system in order to preserve or improve its condition based on the control of the economic situation, which is necessary for making immediate management decisions in case of unpredictable changes in the economy, internal and external environment. The economy in the conditions of war means the economy, the purpose of which is the concentration and use of one's own resources for effective countermeasures against threats to the security of territories. The impact of threats on local economic processes leads to disruption of the sustainable functioning of the regional economy, as a result of which the regional system management apparatus loses control over the stages of reconstruction of the aggregate social product (Bezverkhyi et al., 2022).

The conducted research demonstrates the difficult situation in the economy of Ukraine, large-scale missile strikes by the russian federation on the energy system of Ukraine do not allow to start the recovery of the economy of the regions in full force. To date, it is still very difficult to assess the consequences of military actions, because the war continues today, and all this has a negative impact on the economic processes of the regions, which used to be the driving force of Ukraine's industrial potential (Buriak, 2022).

Conclusions

Since the start of the full-scale russian attack, the economy and financial system have shifted from market-based to manual management to meet the unprecedented challenges. This approach worked. This made it possible to overcome the panic and stabilize the work of the financial and economic system. Therefore, in the current situation, it is necessary to quickly solve the issue of managing the economic development of the regions.

The proposed processes of regulation and stabilization of the development of the economies of the regions should contribute to the acceleration of socio-economic development, the determination of the main priorities for solving important problems according to the innovative and progressive scenario, the implementation of a system of urgent, renewable actions to manage the development of the economy of the regions of Ukraine.

At the same time, timely decisions will help minimize the problems described above, reduce pressure on the financial system of Ukraine's regions, in particular on the national currency, and facilitate the process of transition from "manual" to market management, taking into account the requirements of military legislation. law. This will reduce existing imbalances and bring the system to new conditions. This topic should become central in further scientific research to stabilize the life of the population.

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