Economic security of Ukraine in the context of modern challenges and threats

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Размещено на http://www.allbest.ru/

Economic security of Ukraine in the context of modern challenges and threats

Pikulyk O., Lesya Ukrainka Volyn National University

Introduction

economic security state

The issue of ensuring Ukraine's economic security in the face of modern challenges and threats is becoming particularly urgent. The economic security of the state plays an important role in ensuring sustainable economic development, achieving the economic sovereignty of the state, implementing an effective social policy of the state, increasing the competitiveness of national goods and services in the conditions of globalization and growing international economic interdependence.

The national interests of Ukraine correspond to the sustainable development of the national economy, the integration of Ukraine into the European economic space, the development of equal and mutually beneficial economic cooperation with other states [1]. The emergence of new threats to the economic security of Ukraine, connected with the full-scale war unleashed by Russia on the territory of Ukraine, requires a comprehensive study of the main threats to the economic security of Ukraine and the search for ways to overcome them.

Presenting main material

Historically, the problem of economic security of the country arises simultaneously with the formation of statehood, the formation of national interests in general and economic interests in particular. Therefore, in the history of any country, you can find periods when this problem either worsened or became less noticeable, but it always existed.

The issue of economic security is especially urgent for those countries whose economies are going through a transformational crisis. The transformation of any social system mostly takes place in crisis conditions, which under certain circumstances can turn into immediate threats to the existence of the system itself [2].

The concept of economic security in modern scientific literature is interpreted by various authors who emphasize the most significant components of this category. In the Modern Economic Encyclopedia, the concept of economic security is considered as a complex multifactorial category that characterizes the ability of the national economy to expand reproduction in order to meet the needs of the population and the state at a certain level; resistance to the destabilizing effect of factors that threaten the sustainable and balanced development of the country; ensuring the competitiveness of the national economy in the global economic system [3].

In 1985, at the 40th session of the UN, a resolution was adopted, which determined that economic security is a state in which the people can sovereignly, without interference and pressure from outside, determine the ways and forms of their economic development. In Ukraine, this term began to be used only in the early 1990s. According to the Law "On the Basics of National Security of Ukraine" (2003), economic security is a leading component of Ukraine's national security. The criteria of economic security characterize the state of material potential and the presence of a set of effective relations (economic mechanism) that coordinates the interests of active subjects to preserve and strengthen the state by creating incentives for effective work for the benefit of society and effective entrepreneurship in the strategic direction of the general reproductive process [3].

Economic security is interpreted by scientists as:

- availability of sufficient opportunities in the state to ensure the reproduction of production potential in industry, agriculture and in all areas of socially useful work, as well as to ensure the stability of the social order, the sovereignty of the state;

- the ability of the state to ensure the protection of national economic interests from external and internal threats, to carry out progressive economic development in order to maintain the stability of society and sufficient defence potential under any conditions and variants of the development of events;

— the ability of the state to independently develop and implement its own economic policy, as well as to determine and implement its own national interests, etc.;

— the ability of the national economy to expand its selfreproduction in order to meet the needs of its own population and the state at a certain level, to resist the destabilizing effect of factors that threaten the country's development, to ensure the competitiveness of the national economy in the world economic system [4].

Makstutis A. (2006) considers economic security as a certain state of economic and state institutions, which ensures the protection of priority national interests, guarantees the harmonious, socially oriented development of the country, as well as a good economic and defence potential, regardless of the positive or negative development of internal or external processes [5]. The scientist singles out several goals of economic security:

— the stability of economic power and the ability to finance defense needs;

— provision of "strategic products" (for example, energy, etc.);

— diversification of foreign trade;

— independence from dominant players in the international economy;

— protection against economic espionage;

— good macroeconomic indicators;

— security of property;

— social protection of a person at a certain level of livelihood;

— employment provided with jobs;

— efficiency of economic activity [5].

In the economic literature, the security system of the state economy is represented by internal and external subsystems, which have their own components:

— external security subsystem - technological,

commercial, financial;

— subsystem of internal security - technical and production, food and raw materials, energy, environmental, information.

In general, the economic security of the state acts as a system, the main functions of which are divided into five groups: protective, regulatory, preventive, innovative and social. It should be noted that this classification of the functions of the economic security system of the state is conditional, since these functions are interconnected and mutually conditioned, and often the features of one function can be repeated when defining another function. The effectiveness of ensuring the economic security of the state depends on the ability to fully function these functions together and at the same time. In addition, the issues of these functions can be changed when providing certain components of economic security [6].

Macroeconomic, financial, foreign economic, investment, scientific and technological, energy, production, demographic, social, food security are distinguished by functional areas. By subject -- the economic security of a person, subject of economic activity (enterprise), region, state, country is distinguished [3].

Economic security is traditionally considered as the most important qualitative characteristic of the economic system, which determines its ability to maintain normal living conditions of the population, stable provision of resources for the development of the economy, as well as consistent implementation of nationalstate interests. In general, security means, first of all, the protection of the country from existing or potentially possible threats. Thus, the essence of Ukraine's economic security is:

— the ability of the national economy to ensure its free, independent development and maintain the stability of civil society and its institutions, as well as the country's sufficient

defense potential under all kinds of adverse conditions and options for the development of events;

- the ability of the Ukrainian state to protect national economic interests from external and internal threats [2].

The strategic goal of ensuring economic security is to achieve such a level of economic development that would create optimal conditions for the growth of individual well-being, socioeconomic and military-political stability of society and preservation of the integrity of the state, successful resistance to the influence of external and internal threats [7].

Important components of the concept of "economic security" are the recognition of national-state interests and goals of Ukraine both inside the country and outside: support of state sovereignty and independent development; the international position of Ukraine, its place in the world division of labor, specialization and cooperation of production, world trade, international financial and banking systems, important markets of goods and services, securities; self-preservation, self-defence and self-development of the country [4].

Ensuring the national economic security of Ukraine involves the implementation of purposeful activities of state and public institutions, as well as citizens to identify and prevent threats to the economic security of the individual, society and the state and countering these threats as a mandatory and indispensable condition for the protection of national economic interests [8].

The strategic goal of ensuring economic security is to achieve such a level of economic development that would create optimal conditions for the growth of individual well-being, socioeconomic and military-political stability of society and the preservation of the integrity of the state, successful resistance to the influence of external and internal threats [4].

The state strategy of the country's economic security should be primarily focused on maintaining a sufficient level of

production, scientific and technical potential; preventing the population's standard of living from falling to threshold, limit values, the violation of which can cause social tension; prevention of conflicts between individual strata and population groups, nations and nationalities. The state strategy in the field of ensuring economic security is developed and implemented within the framework of the implemented economic policy, the main priorities of which are to ensure the stability of the economic condition of the individual, the socio-economic and militarypolitical stability of society, the state, the preservation of the constitutional rights and freedoms of the person, legality and law- abidingness of all, primarily state authorities [4].

Ukraine's priorities in the sphere of ensuring economic security are the sustainable development of the national economy, the development of mutually beneficial economic cooperation with other countries, and integration into the European economic space [1]. Such priorities correspond to the national economic interests of Ukraine. It is important in this context to increase the resilience of the economy to existing and new internal and external threats. That is why it is necessary to develop a mechanism for counteracting the risks of destabilizing phenomena in the economy. And the integration of Ukraine into the European and international economic space requires an internal innovative renewal of the national economy in order to increase its competitiveness on the international and European markets.

National economic interests are a set of objective economic needs of the country, the satisfaction of which ensures the effective functioning and sustainable development of its economic system, and through it, the economy. Economic interests are an objective expression of the functioning of the country's economic sphere. They act as a leading component of the systemic aggregate of national interests. It is also important to determine the relationship between national economic interests, threats to

economic security, and the set of state policy priorities for ensuring economic security.

The purpose of realizing national economic interests is to maintain such a state of the state's economic sphere, which is characterized by balance, resistance to negative factors, the ability of this sphere to ensure the effective functioning of the state's economy and economic growth [2].

Threats to the economic security of the state can be both internal and external, that is, they can arise both in the country itself and outside its borders. At the same time, they may disappear automatically under conditions of normal functioning of the national economic system (market regulation mechanisms), or may require neutralization with the help of state regulation mechanisms. In this context, the system of early detection and prevention of threats to the economic security of the state, which is the basis of its provision in modern conditions, should be based on a comprehensive multi-criteria in-depth analysis of threats to the economic security of the state, which will allow to systematize them and choose the most effective means and mechanisms for countering these threats [7].

Changes in the volume and distribution of income and wealth, sharp changes in the level of employment, inflation, market access contribute to the emergence of security threats, which worsen the condition of economic entities and slow down the pace of economic development [4]. Threats to foreign economic security are the result of emerging contradictions both in the country's internal economic space and beyond. In the theory of the international economy, the main areas of threats to the country's foreign economic security are traditionally considered: the structure of foreign trade (the country's trade balance), its international investment position, currency and financial relations, and the influence of international economic organizations [9].

In the field of foreign economic security, Ukraine primarily faces such threats as high import dependence of the economy and insufficient diversification of foreign trade flows, the predominance of raw materials in exports and high-tech goods in imports [1]. In particular, in 2021, the structure of Ukraine's imports was dominated by machinery, equipment, vehicles and devices (31%), and products of the chemical and related industries (21%) (Fig. 1.).

Fig. 1. Commodity structure of Ukraine's imports in 2021 (according to KPB6).

Compiled by the author based on: [10].

Food products and raw materials for their production (43.9%) and ferrous and non-ferrous metals and their products (24.9%) take the largest share in the commodity structure of exports (Fig. 2) [10].

Fig. 2. Commodity structure of Ukraine's exports in 2021 (according to KPB6)

Compiled by the author based on: [10].

The full-scale war led to a significant deterioration of Ukraine's foreign trade position. Because of the war, the traditional trade deficit in goods widened. The export of agricultural products suffered the greatest losses, since it had the largest share of transportation by sea. Despite the reorientation to land transport and the use of Danube ports, the capacity of the existing logistics corridors is only about 25-30% of pre-war export volumes. The gradual expansion of export routes and bottlenecks in the infrastructure both in Ukraine and on the part of European partners will contribute to increasing the supply of key food products.

The export of products of the mining and metallurgical complex was also significantly affected by the naval blockade. In addition, the metallurgical sector not only reduced production volumes due to proximity to hostilities, but also suffered significant destruction of production capacities. Therefore, even with the restoration of full access to sea routes, the export of mining and metallurgical products will remain significantly lower than in previous years. In the II quarter of 2022, the export of goods almost halved. It will remain depressed until the end of 2022 due to logistical problems, forced production cuts and a significant increase in the cost of goods [11].

Considering the economic security of Ukraine in the context of European integration processes, it is worth emphasizing the issue of the competitiveness of Ukrainian exports, as well as the ability of national producers to adapt to changes in the conditions of commodity markets [4].

With the beginning of the war, the structure of trade in services also changed fundamentally. Exports decreased in almost all types. In particular, the export of transport services decreased due to the blocked port infrastructure, the closure of airspace, as well as Russia's unjustified reduction in payments for the transit of natural gas. The export of tolling services also decreased

significantly as a result of both the temporary shutdown of certain plants at the beginning of the war and the transfer of some production facilities from the territory of Ukraine. IT services expectedly decreased the least. They were among the first to start recovering since April. Over the forecast horizon, IT services will remain the main driver of service export growth at a consistently high rate (10-14%) [11].

The financial security of the state is inseparable from the processes of ensuring other types of economic and national security. It serves as a unifying basis for creating conditions for economic security. Financial security is a concept that includes a set of measures, methods and means to protect the economic interests of the state at the macro level, corporate structures, financial activities of economic entities at the micro level [9].

One of the most important aspects of the economic security of the state is the state of its financial system, the ability of this system to provide the country with financial means in the amount sufficient to fulfill its external and internal functions. First of all, the stable and safe development of the entire economy as a whole depends on the development of the situation in the financial sectors of the economy, which are intertwined by numerous and diverse connections. It is necessary to understand that in today's conditions, financial relations often not only do not make a positive contribution to reforming the Russian economy, but often hold back, which ultimately leads to crisis situations [9].

If we consider the financial component of the economic security of Ukraine, it is worth noting such challenges and threats as a high level of shadowing of the economy, a significant demographic burden on the pension system, the presence of a number of unresolved financial issues in the temporarily occupied territories of Ukraine, a low level of stock market liquidity, an insufficient level of long-term lending , as well as the presence of such negative phenomena as the legalization of illegally obtained income [1].

The main factors contributing to the spread of the shadow economy in Ukraine are the following:

- significant spread of barter relations;

- a high share of cash in the money supply;

- low payment discipline of enterprises, lack of an effective mechanism for repayment of mutual debts, debt collection, etc.;

- low payment discipline of the state, non-fulfillment of its obligations regarding the financing of budgetary institutions and public procurement, which is the basis for corruption;

- the weakness of state bodies, which should exercise control over the implementation of economic legislation, payment of taxes, etc.;

- a significant number of tax, customs and other benefits;

- inconsistency and lack of transparency of the state economic policy.

Currently, there is a noticeable intensification of the fight against the shadow component of the national economy [4].

Industrial security is the state of the country's production sphere, which ensures the most effective use of the available production capacities in the country, their modernization and expanded reproduction, the increase in the level of innovativeness of production and the increase in the level of competitiveness of the national economy [12].

In the sphere of industrial safety of Ukraine, the main threats are: the loss of part of the industrial potential as a result of the armed aggression of the Russian Federation and the temporary occupation of part of the territory of Ukraine; low level of resource efficiency of the economy; insufficient involvement of Ukraine in global production chains; low level of introduction of the latest production technologies; unsatisfactory technical condition and level of protection of critical infrastructure objects, insufficient investment in its renewal and development; high wear and tear of fixed assets in the main types of economic activity;

deterioration of the ecological situation and climate change; ineffective management of waste, its processing and disposal, slow introduction of low-waste technologies; lack of production of a full cycle of products critically important for ensuring human life in the conditions of the manifestation of the latest trends in the spread of pandemics, sanctions policies and other isolation processes in the world [1].

A full-scale military invasion of Russia on the territory of Ukraine has particularly catastrophic consequences for the development of Ukraine's industry. In such conditions, the rate of deindustrialization of the economy is increasing due to the constant reduction of the role of industry in it. The reduction of metallurgical production after the beginning of the war stimulated the export of ore products, which brought it to the first positions in exports in March 2022. The important role of Ukraine as one of the leading suppliers of food and guarantors of global food security stimulates the preservation and increase of the production of agricultural products. Thus, the economy of Ukraine falls into the trap of agrarianization, which significantly limits the potential and rates of economic growth in the future.

In the eastern and southern regions of Ukraine, there is a critical reduction in industrial production as a result of the shutdown and physical destruction of industrial facilities. According to the estimates of the European Bank for Reconstruction and Development, regions with active hostilities account for 60% of Ukraine's GDP. Therefore, the inevitable consequences of the war will be a significant reduction in production in Ukraine, which, according to IMF forecasts, will reach at least 25-35% in 2022. Until the middle of April 2022, active hostilities continued in the territory of 9 regions of Ukraine and the city of Kyiv, the total share of which in the volume of sales of industrial products in 2021 was almost half (44.5%). The industrial potential of the leaders of industrial development - the

Dnipropetrovsk and Zaporizhia regions, which have already suffered infrastructure destruction as a result of missile strikes - is under threat. The shares of these regions in the structure of the sale of industrial products in 2021 were 18.7% and 8.4%, respectively [13].

Due to the fighting in the eastern regions, Ukraine is losing about a third of its metallurgy potential, which resulted in a reduction in the production of steel in the 1st quarter of 2022 by 31.2%, iron by 34.1%, and rolled steel by 34.2%. As of mid-April 2022, the production of fertilizers in Ukraine has actually stopped. As a result of the bombings, state enterprises in the machinebuilding industry strategically important for the economy and security of the state were damaged to varying degrees.

Another threat to Ukraine's production security is the loss of key segments in the domestic and foreign markets of industrial products due to the decrease in the competitive positions of domestic manufacturers as a result of the increase in production and logistics costs. Producer prices in 2021 increased by 40.8% compared to 2020, and in January - February 2022 - by 61% compared to the same period in 2021. In the conditions of war, industrial enterprises have almost no opportunity to replace natural gas with other energy resources - for this requires significant investment. Therefore, the preservation of high global gas prices will contain the risks of the closure of many enterprises, primarily energy-intensive industries, the increase in producer prices and the reduction of revenues to the state budget [13].

The destructive influence of the Russian military on the logistics infrastructure breaks supply chains within the country and makes it impossible to export finished products. Thus, blocking the Black Sea ports by the Russian occupiers prevents the export of 80-90% of industrial goods. The reorientation of freight transportation from waterways to land is limited by a significant increase in the cost of logistics and insufficient capacity of railways and roads.

A negative trend is the primitivization of industrial production due to the significant predominance of low-tech and raw materials in its structure, which make up more than two-thirds (67.3%) of production. Thus, the share of the extractive industry in the volume of sales of industrial products in 2021 was 16.1%, the low-tech industry segment - 23.9%, the medium-low-tech industry - 27.3%. The threat of the subsequent loss of the production potential of technologically complex products is growing due to the fact that Russia purposefully destroys the industrial facilities of those segments of the industry that belong to higher technological structures - knowledge-intensive engineering industries, arms and ammunition industries, chemical industry, etc.

In Ukraine, there is an increase in the dependence of the domestic market on the import of industrial products. In general, in 2021, the share of imports in the total volume of domestic consumption of industrial products increased to a record 53.4%, that is, it increased by 5.8%. compared to 2020. The machinebuilding industry needed imports the most - 94.4% of domestic consumption; the share of imports in the consumption of chemical and petrochemical products was significant - 77.3%. In the metallurgical and food industries, the level of import dependence was 36.9% and 22.6%, respectively.

The temporary or complete shutdown of many industrial enterprises in Ukraine during the war and the liberalization of import conditions to close deficits are likely to lead to a sharp increase in import dependence for a number of industrial products [13].

Another negative trend is the deterioration of the dynamics of investment processes in industry, which may cause an aggravation of the investment crisis and deprive the industrial sector of resources for future recovery. For many years, Ukraine has been systematically underinvested, significantly inferior to neighboring countries in terms of investment. Thus, the growth of capital investments in industry in 2021 was 10.8%.

The restoration of the destroyed industrial infrastructure and the implementation of structural modernization will require significantly larger amounts of investment. However, in the conditions of hostilities and high risks of repeated Russian aggression, Ukrainian industry will remain unattractive for private investors.

Ensuring the full-fledged operation of the industrial sector should be considered as one of the key factors of the stability of the economy in the war and post-war periods, which will provide an opportunity not only to restore domestic production, but also to prevent excessive inflation, deterioration of the foreign trade balance, and a decrease in tax revenues to the state and local budgets.

During martial law and during the period of achieving a level of security sufficient for powerful investment in the reconstruction and structural modernization of the industrial complex, it is important to promote the stable operation of the existing industrial complex, in particular by way of relocation of enterprises from regions with a high risk of the spread of hostilities, provision of targeted credit support for the restoration of production in safer regions, maintenance of sustainable logistics support, formation of alternative ways of transporting exports, etc. While developing the strategic foundations of the post-war revival of the Ukrainian industry, it is necessary to overcome the identified threats to industrial safety - this will guarantee the sustainable development of the domestic industry in the medium and long term [13].

Macroeconomic security is another important component of Ukraine's economic security. Macroeconomic security is a state of the economy in which macroeconomic reproductive proportions are balanced [12]. According to the economic security strategy of

Ukraine, the main challenges and threats in the field of macroeconomic security are:

— the slowdown in the world economy development in the conditions of the COVID-19 pandemic and the related decrease in world prices for the main commodity groups of domestic exports;

— the preservation of the risks of increased inflation and exchange rate fluctuations in the conditions of the existence of monopoly markets and insufficient development of competition, as well as the constant deficit of the current account of the balance of payments and certain uncertainty of exogenous factors due to the COVID-19 pandemic;

— intensive processes of labor migration, which lead to the outflow of qualified personnel;

— high level of unemployment (compared to other European countries) in conditions of existing disproportions between demand and supply of labor on the market, as well as high competition on the labor market in industries with high wages;

— significant uneven distribution of the population's income regionally, which provokes excessive internal labor migration;

— a high level of informal employment (compared to lower wages than in other European countries), which will keep labor migration flows at a high level in the future;

— low growth rates of labor productivity;

— the low level of well-being of the population, which leads to the narrowing of domestic consumption and savings, the growth of poverty, in particular, among working people [1].

In recent years, Ukraine has observed a trend towards GDP growth and improvement of macroeconomic indicators (Fig. 3.) [14]. However, in the current conditions of the war, the macroeconomic situation in Ukraine has significantly worsened. Fighting in the

east and south, the destruction of infrastructure in other regions, the blockade of seaports and low demand in most sectors will hold back economic recovery in the coming months. A significant contribution to the fall in GDP will be a decrease in activity in agriculture due to temporary occupation and mining of land, loss of machinery and elevators, as well as in some cases untimely and insufficient treatment of land with fertilizers and plant protection products [11].



Fig. 3. Gross domestic product of Ukraine in 2012-2021 (million UAH).

Compiled by the author based on: [14].

According to the updated forecast of the European Bank for Reconstruction and Development, in 2022, due to the war, the Ukrainian economy will shrink by 30%. At the end of March, the EBRD predicted a 20% drop in GDP. The International Monetary Fund also predicts that the Ukrainian economy will shrink by a third. According to World Bank estimates, Ukraine's GDP will decrease by at least 45%. After all, according to various data, from 30% to 50% of enterprises in Ukraine have completely ceased their activities; about half of all workers lost their jobs and earnings.

Simulations using the most recent macroeconomic projection show that the share of the population with incomes below the actual Subsistence Minimum (the national poverty line) may reach 70 percent in 2022, up from 18 percent in 2021. In the absence of a massive post-war support package, this indicator would still be higher than 60 percent by 2025. Based on the international upper middle-income poverty line (US$5.5 a day), poverty is projected to increase to 19.8 percent in 2022, up from 1.8 percent in 2021, with an additional 59 percent of people being vulnerable to falling into poverty [15].

According to the Ministry of Economy of Ukraine and the Kyiv School of Economics, as of August 1, 2022, the amount of direct losses to the Ukrainian economy from damage and destruction of infrastructure is $108.3 billion. 44.3% of them are losses of residential infrastructure.

In general, the losses of the Ukrainian economy, both direct and indirect, such as the fall in GDP, the cessation of investments, the outflow of labor force, etc., reach 600 billion US dollars. According to government estimates, this number could rise to $1 trillion in the long term.

Destroyed facilities and infrastructure, the occupation of part of the territory of Ukraine, logistical difficulties, which most significantly affected the volume of exports, the drop in domestic demand are holding back the recovery of the economy - both in the production and service sectors. As a result, the real GDP of Ukraine in the II quarter of 2022, according to National Bank of Ukraine estimates, decreased by almost 40% [11].

The full extent of economic damage will depend on how long the war lasts. Even when it ends, the World Bank predicts a slow recovery and a growing threat of mass poverty. In the medium term, the loss of production and export capabilities, combined with the loss of human capital, is expected to have lasting economic and social consequences [16].

At the same time, the economic effect of the war will be felt not only in Ukraine, but also far beyond its borders. The consequences of the war extend to trade, financial and migration links in the European region, resulting in significant economic damage to neighbouring countries [16].

Energy security is an important component of the economic security of the state. Energy security is a state of the economy that contributes to the effective use of the country's energy resources, the presence of a sufficient number of energy producers and suppliers on the energy market, as well as the availability, differentiation and environmental friendliness of energy resources [12]. Energy security, as a component of economic security, involves ensuring the stability of physical supplies of energy carriers for domestic consumption and adapting the national economy to the new world prices for them. In the conditions of informatization and globalization of the world economy, the smooth functioning of financial markets largely depends on the coordinated operation of the energy industry. Energy is such a universal product, even a temporary absence of which can disrupt the entire course of reproduction, stop the operation of computers, the Internet, and can dramatically undermine the functioning of both the traditional economy and the high-tech economy [9].

Russia's military invasion of Ukraine has caused catastrophic destruction of the energy infrastructure, forcing suppliers to make enormous efforts to provide electricity, heat and hot water to domestic and industrial consumers, hospitals and schools. Ukrainian energy companies face growing needs to replace and restore distribution and transmission networks, including substations damaged as a result of Russian aggression. To meet these growing needs, the Secretariat of the Energy Community established the Energy Support Fund of Ukraine, which, in cooperation with the Ministry of Energy of Ukraine, will combine and coordinate the contributions of development partners, investors and the private sector for the recovery and reconstruction of the Ukrainian energy sector.

As part of a joint Memorandum of Understanding, the USAID Energy Security Project will provide procurement services to the Energy Support Fund for Ukraine in a transparent and efficient manner, creating a supply chain of critical equipment to meet the urgent needs of Ukrainian energy companies, suppliers and technical personnel.

The USAID Energy Security Project (ESP) works with the Government of Ukraine, private and public sectors to strengthen Ukraine's energy security and transform the country's energy sector into a modern, market-oriented and EU-integrated growth driver.

Thanks to close cooperation with the USAID Energy Security Project, NEC Ukrenergo successfully disconnected from the Russian power grid a few hours before the start of the invasion, and on March 16, 2022, Ukraine and Moldova successfully synchronized with the energy system of continental Europe (ENTSO-E). USAID continues to support Ukraine as it seeks long-term energy security and moves toward market-oriented energy policies to achieve full integration with Europe [17].

The war has especially negative consequences for the demographic situation in the country. The demographic component of economic security is manifested in the stabilization of the population of Ukraine and the formation of prerequisites for further demographic growth. The country's demographic situation generally reflects its socio-economic well-being [9].

The demographic impact of the war was felt not only during the war, but also for decades to come. This war could be particularly devastating because of the pre-war situation: the country's population was already declining, and the birth rate and life expectancy were low compared to its neighbors.

It is worth noting that there were demographic problems in Ukraine even before the start of the war. The population has been declining since 1990, when it reached a maximum of 51.6 million. In 2022, according to UN estimates, the population was 43,792,000, but the UN includes the population within the internationally recognized borders of Ukraine. Therefore, before the full-scale invasion of Russia, the demographic crisis in Ukraine, caused by the Russian annexation of Crimea and the occupation of part of Donbas, as well as emigration and a low birth rate, led to a decrease in the population by more than 26% during the years 1990-2022. Now the population of Ukraine has decreased even more. The state has all the elements that can cause a demographic catastrophe: additional deaths due to war, huge internal displacements, increased emigration (refugees), lower birth rates.

According to studies [18], financed by the Council of the EU, the population of Ukraine may decrease by 24-33% depending on the duration of the war. The effect will be especially noticeable for children and the population of productive age.The researchers note that these estimates do not take into account an additional factor: increased mortality due to the long-term impact of the health care crisis caused by injuries, infectious diseases and other injuries. This situation can be defined as a demographic tragedy for several reasons.

The first reason for the deterioration of the demographic situation in Ukraine is the loss of lives. The war caused an unknown number of military and civilian deaths (exact data unavailable). This number varies in different sources. Another reason is the effect of the war on the geographical distribution of the population. It has been constantly and completely changed by the massive internal displacement of people that is ongoing. The International Organization for Migration estimates that more than 7.1 million people (16% of the country's population) have become internally displaced persons [18].

Another reason for the deterioration of the demographic situation is that many refugees have moved to other countries, leaving behind their families, property, education and work. According to the UN High Commission for Refugees, the number of refugees from Ukraine since February 24 was 6.6 million. It is impossible to estimate how many refugees will return. This will depend on many factors, including the length of the war, its intensity in places of permanent residence of the refugees, and the situation in the country after the end of the war. The likelihood that Ukrainians will return or be able to return to their homes will be low in regions occupied by Russia, such as Donbas.

In the future, a decrease in the birth rate in Ukraine is also expected due to the consequences of the war and a possible decrease in the birth rate due to a smaller number of women of reproductive age. It also remains highly likely that the country's new age structure will have fewer young people and more older people, putting additional pressure on the economy during reconstruction.

A more positive demographic perspective, required for the economic recovery and reconstruction of the country, should be based on the implementation of a demographic policy that will contribute to the recovery of the birth rate. The basis of such a policy should be significant investments in health care and mortality reduction, improvement of human capital. In addition, an active immigration policy is needed, which will return Ukrainians and attract workers from other countries to fill the gaps in the sex-age structure of the population. This policy should support the quantity and quality of the workforce. Demography will be an important element of rebuilding a strong Ukraine [18].

The investment-innovation component of economic security can be defined as the ability of the state to receive, place and use domestic and foreign loans and investments, as well as settle on them within the limits that ensure the stable functioning of its monetary and financial system and the satisfaction of public needs in adverse external and internal economic conditions, which will ensure long-term positive economic dynamics with the appropriate level of financing of the scientific and technical sphere, the creation of innovative infrastructure and adequate innovative mechanisms [9]. The level of investment and innovation security of Ukraine indicates the impossibility of ensuring sustainable economic growth in the conditions of the current insufficiency and resource orientation of investments.

The main challenges and threats in the sphere of investment and innovation security of Ukraine, according to the Strategy of Economic Security of Ukraine, are:

— lack of favorable conditions for attracting investment and reinvestment, as well as insufficient institutional support for these processes;

— lack of a mechanism for evaluating (screening) direct foreign investments involved in objects of strategic importance for the national security of Ukraine;

— the imperfection of the regional and purposeful image investment policy, the lack of scientifically based monitoring of the investment potential of Ukraine and its regions;

— poorly developed innovation infrastructure in general, and in particular for conducting business and implementing innovations by small and medium-sized enterprises;

— lack of favorable conditions for the creation and development of technological companies and innovative enterprises, startups;

— unsatisfactory condition of research infrastructure facilities;

— insufficient volume of financing of scientific, scientific and technical and innovative activities;

— insufficient volume of fixed capital financing to ensure intensive development of the economy in the long term;

— lack of effective economic incentives, favorable conditions for innovative renewal of production, low demand for innovative products in the domestic market;

— insufficient level of protection of intellectual property rights;

— illegal directions to domestic technological developments and innovations by foreign entities and the risks of their unauthorized leakage abroad; low protection of property rights; corruption [1].

In the context of new challenges and threats to economic security, an important task today is the development and implementation of an effective plan for the recovery of Ukraine and the creation of appropriate structures for its implementation.

On April 21, 2022, the National Council for the Recovery of Ukraine from the Consequences of the War was established - a consultative and advisory body whose task is to develop a recovery plan. The main principles on which this plan is based are full access to the EU and G7 markets; construction of the economy based on the principles of deregulation and liberalization; establishment of logistics routes in the western direction; the transition from the export of raw materials to processing in those industries that provide the largest export revenue; development of the domestic military-industrial complex; self-sufficiency in energy (increasing production of own gas and development of nuclear energy); climate modernization; localization of at least 60 % [19].

The main tasks of the Council are:

--the development of a plan of measures for the post-war recovery and development of Ukraine, which, in particular, will provide for the restoration and development of transport, medical, social, communal, industrial infrastructure and housing, energy infrastructure, communications, military infrastructure and the military-industrial complex, structural modernization and restart of the economy, measures to overcome unemployment, support families with children, vulnerable sections of the population, people who found themselves in difficult life circumstances as a result of the war, restoration and preservation of cultural heritage objects;

--definition and development of proposals for priority reforms, the adoption and implementation of which are necessary in the war and post-war periods;

--preparation of strategic initiatives, projects of regulatory and legal acts, the adoption and implementation of which are necessary for the effective work and recovery of Ukraine in the war and post-war periods [20].

It is important that the created institution - National Council for the Recovery of Ukraine - combines the actions of international donors and the Government of Ukraine, and as a connecting link between donors and national bodies for the coordination of international aid and project management, carries out effective sectoral coordination [21].

The main prerequisite for the post-war reconstruction of the economy is Ukraine's obtaining reliable security guarantees with the impossibility of resuming hostilities on our territory.

After fulfilling this basic condition, the key goals of the post-war reconstruction of the economy should be:

a) reconstruction of property and infrastructure destroyed or damaged as a result of the war;

b) quick recovery of economic activity;

c) return of refugees and internally displaced persons to Ukraine and their inclusion in economic processes;

d) formation of foundations for sustainable economic growth [22].

Reparations from the aggressor country and assistance from the international community should be the most significant sources of financing for the post-war reconstruction of Ukraine. In

the provision of international aid for the reconstruction of Ukraine, the EU, the governments of partner countries and international institutions - the World Bank, the International Monetary Fund, the European Investment Bank, the European Bank for Reconstruction and Development and other international institutions - should play a key role. Ukraine's post-war reconstruction program should be harmonized with the tasks of EU membership and ensure Ukraine's inclusion in European preaccession training programs.

The development of the plan for the reconstruction of Ukraine provides for measures that should be implemented within the framework of certain stages of reconstruction. The first stage should be aimed at measures to restore infrastructure, social facilities and provide humanitarian aid. In particular, it is about the need to repair and rebuild highways, bridges, railway tracks, railway stations, electrical networks and substations, residential buildings, schools, hospitals, administrative buildings, water supply and drainage systems, agricultural lands. At the next stage, an important task is to create the foundations of sustainable economic growth, while gradually reducing the scale of rescue measures in the social sector and the sector of critical infrastructure. The issues of job creation and permanent sources of income generation will be especially relevant.

In general, the recovery of the economy destroyed after the war should take place in the following main directions:

— reconstruction of physical infrastructure and restoration of the natural environment;

— reconstruction of housing stock;

— rehabilitation of victims, restoration of social infrastructure and the sphere of social services;

— revitalization of the industrial sector, creation of new jobs and support of small and medium-sized enterprises;

— creation of production capacities and formation of state orders to strengthen the country's defense capabilities;

— improving the quality of public administration and strengthening the institutions of the market economy [22].

Representatives of the Ukrainian authorities presented the Recovery Plan of Ukraine, which provides for three stages:

1. Stability. These are measures to restore the most important objects of critical infrastructure until the end of 2022. In particular, it is about repairs of boiler houses, networks, housing, business support with a focus on small and medium-sized enterprises.

2. Restoration - 2023-2025. This stage involves the implementation of most of the projects of the entire plan, the reconstruction of social sphere objects, the construction of housing.

3. Modernization - 2026-2032, provides measures for Ukraine's accession to the EU. [23]

At the same time, as evidenced by the experience of the Balkan countries, in particular the post-war reconstruction of Bosnia and Herzegovina, the sectoral focus of international aid may include the following measures:

— emergency aid and reconstruction: food aid, temporary housing for internally displaced persons, other rescue measures;

— social infrastructure and public services: education, health care, water supply and purification, public administration and social services;

— economic infrastructure: transport and logistics, communication, energy, business services, financial services;

— production sector: industry, agriculture and forestry, construction, tourism, trade activities and regulation;

— assistance with goods, general program assistance;

— support of civil society and non-governmental organizations [22].

On July 4, 2022 in the Swiss city of Lugano, Ukraine presented a post-war recovery plan worth more than $750 billion, which will include 850 projects for the reconstruction of the country. The plan is designed for 10 years - from 2023 to 2032 - and will take place in two waves. The first will last in 2023-2025, in which most of the mentioned projects (580) are planned to be implemented. These three years will cost more than 350 billion dollars. The second wave will contain a smaller number of projects, but will require more financing - more than 400 billion dollars. At the same time, the plan stipulates that the Ukrainian economy will grow by 7% every year during these 10 years.

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