Public administration of international trade: regional aspect

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Institute of public administration and civil service

candidate of economic sciences, associate professor, postdoctoral researcher of the department of regional policy, educational and scientific

Abstract

Key words: public administration, international trade, Chamber of Commerce and Industry of Ukraine, region.

Анотація

Кіфоренко Оксана. Публічне управління міжнародною торгівлею: регіональний аспект

Глобалізаційні процеси стають інтенсивнішими, роблячи всі суб'єкти глобальної системи функціонування взаємозалежними один від одного. Одним із плюсів глобалізації є можливість обміну товарами та послугами між суб'єктами як на глобальному, так і на регіональному рівнях. Такий обмін товарами та послугами вважається міжнародною торгівлею. Міжнародна торгівля здійснюється у формах експорту та імпорту. Міжнародна торгівля впливає на економічне функціонування будь-якого регіону, включаючи динаміку та мінливість економічного зростання, а також показники ринку праці. Публічне управління включає в себе державне управління (здійснюється органами державної влади), регіональне та місцеве управління (здійснюється регіональними та місцевими органами влади) та громадське управління (здійснюється недержавними організаціями, громадськими організаціями, тощо). Суб'єктом публічного управління міжнародною торгівлею, якому приділено увагу в даному дослідженні, є Торгово-промислова палата України, яка є недержавною неприбутковою самоврядною організацією, що об'єднує юридичних осіб та громадян України, зареєстрованих як підприємці, а також їх об'єднання, на громадських засадах. Регіональна структура торгово-промислових палат включає центральну Торгово-промислову палату України та 25 регіональних палат. Торгово-промислова палата України є членом Міжнародної торгової палати та Всесвітньої федерації торгово-промислових палат, а також Асоціації торгово-промислових палат Європи. Ефективність державного управління міжнародною торгівлею оцінювалася через його опосередкований вплив на показники функціонування регіону в цілому. Із цією метою було візуалізовано, проаналізовано та порівняно обсяги валового регіонального продукту по регіонах України та їх частки у валовому регіональному продукті країни. У статті також визначено суб'єктів використання самого дослідження та його результатів, сформульовано перспективи та обмеження подальшого розвитку дослідження.

Ключові слова: публічне управління, міжнародна торгівля, Торгово-промислова палата України, область.

Main part

The globalisation processes, though being a little bit slowed down by the COVID-19 pandemics, are still expanding, making all the subjects of the global functioning system, being it a country, a company or a single human being, more and more interdependent on each other. Such interdependence has its pros and cons, however, like everything in this world. One of the biggest pros of the globalisation and interdependence spoken above is the possibility to exchange goods and services between the subjects either on the global or regional levels. Such an exchange of goods and services mentioned previously is considered international trade. International trade has long become a part of everyone's life, whether it is the fruit we have at breakfast or the electrical devices we use, our daily routine depends on complex trade flows and production processes scattered across multiple countries (European Commission, 2019). International trade is carried out in the forms of exports and imports. There many definitions of both notions mentioned above, but the essence is generally the same and that is that exports are defined as movable goods and services produced within the boundaries of one country and traded with another country. The sale of the said goods and services generates foreign currency earnings for the country that produces them and boosts its economic growth (Focus-Economics, n.d.). Due to the viewpoint expressed earlier, any country does its best to increase its exports amount, but that, in turn, has also two sides, simply to say the positive and the negative one, though the more detailed research of the said matter would be a topic of another research. It should also be added, that imports are goods or services bought in one country that was produced in another (Segal, 2021). More than that, international trade gives countries the opportunity to sell the goods and services of which they have some surplus, spending more decent amounts of money to import the goods and services they either don't produce or which production is either cost or labour too intensive.

But the international trade is very important not only for the whole countries or countries unions, but for single regions as well, because it influences the region's economic performance, including dynamics and volatility of economic growth as well as labour market performance (Uminski & Nazarczuk, (2021). Thanks to international trade, a vast amount of jobs are created, that, in turn contribute to both local and regional economic and social development. Many companies - big, medium and small - are being created and expanded thanks to the necessity to satisfy the needs of international trade. Everything stated above and far more contribute to the manufacturing output growth on both regional and country levels, satisfying both the needs for exports and the local ones. So, taking into account both the pros and cons of international trade, all the regional subjects can benefit a lot from it either for themselves alone or the whole region as well in case of its effective public administration. Just as a reminder, it should be stated here, that public administration includes state governance (executed by the state authorities), regional and local governance (executed by the regional and local bodies of state power) and public governance (carried out by the non-state entities, NGOs, etc).

The subject of international trade public administration to be paid attention at in this research is the Chamber of Commerce and Industry of Ukraine, which is a non-governmental non-profit self-governing organization that unites legal entities and citizens of Ukraine registered as entrepreneurs, as well as their associations, on a voluntary basis (Chamber of Commerce and Industry of Ukraine, 2022). The Chamber of Commerce and Industry is a legal entity. The members of the Chamber of Commerce and Industry of Ukraine are chambers of commerce and industry established in accordance with the Law of Ukraine `On Chambers of Commerce and Industry in Ukraine', legal entities established and operating in accordance with the legislation of Ukraine, citizens of Ukraine registered as entrepreneurs, and their associations (Law of Ukraine `On Chambers of Commerce and Industry in Ukraine', 2022). Talking about the international level of functioning, it should be noted, that the Chamber of Commerce and Industry of Ukraine has 70 representatives in 56 countries. Another fact pointing the international expansion of the mentioned Chamber activity is, that it is a member of the International Chamber of Commerce and the World Federation of Chambers as well as the Association of European Chambers of Commerce and Industry (Chamber of Commerce and Industry of Ukraine, 2022). In addition, within the Chamber of Commerce and Industry of Ukraine the International Commercial Arbitration Court and the Maritime Arbitration Commission operate, whose activities are regulated by the legislation of Ukraine (Law of Ukraine `On Chambers of Commerce and Industry in Ukraine', 2022).

The regional structure of chambers of commerce includes the central Chamber of Commerce and Industry of Ukraine and 25 regional Chambers (Chamber of Commerce and Industry of Ukraine, 2022). The members of the regional chambers of commerce and industry are simultaneously the members of the Chamber of Commerce and Industry of Ukraine (Law of Ukraine `On Chambers of Commerce and Industry in Ukraine', 2022). The chambers mentioned above provide practical assistance to entrepreneurs in conducting trade and economic operations either on domestic or foreign markets, contribute to the development of the Ukrainian goods and services export, providing their members with a wide range of professional services, including consulting on foreign trade and market evaluation. They also carry out an independent examination of goods as well as carry out an assessment of movable and immovable property and intangible assets. In addition, they provide bar coding and patent licensing services, draw up documentation to ensure protection of intellectual property rights, etc (Chamber of Commerce and Industry of Ukraine. 2022). As 85% of Chamber members are small and medium-sized businesses while 15% are large companies, branch committees of entrepreneurs operate under the said Chamber. They conduct independent examinations of normative legal acts regulating business and foreign economic activity as well as examinations of issues related to the rights and interests of entrepreneurs, plus they prepare proposals for their improvement to state authorities on behalf of the Chambermembers (Chamber of Commerce and Industry of Ukraine, 2022). In such a way, the Chamber takes an active part in the public administration of not only the international trade issues, but of many other spheres of the economic and social functioning of a single region or the whole country. Participating in such a way in the life and functioning of a country as a whole and every single region in particular, the Chambers mentioned above contribute to the overall development of a region/a country and not only to the international trade functioning. Therefore, the more effective the said Chambers work, the more businesses get involved into international trade, increasing their revenues, contributing to the more intensive development of many other spheres for the human activity either a single region or the whole country. But how should one assess the effectiveness of a public administration subject functioning? Of course, there are some complicated techniques of the public officials decisions effectiveness evaluation, but they are either too complicated to be implemented right away or they assess only one aspect of the decision making process. It is being suggested in the research presented in this paper to evaluate the activity effectiveness for the public administration institution mentioned above by analysing the ranking of the Ukrainian regions as for the Gross Regional Product (further - GRP) amount in 2020. Of course, it would be more logical to analyse the exports amount or the ranking of the regions as for the share in the said total amount of Ukraine. But that would be the so-called the first step analysis, simply saying the assessment for the direct impact of the institutions spoken about previously. It would be more interesting and useful to evaluate the public administration of international trade effectiveness through its indirect impact on the regional performance in general, meaning the amount of Gross Regional Product (Figure 1).

Source: author’s own elaboration on the basis of the data from (State Statistics Service of Ukraine, 2022)

Figure 1. Gross Regional Product of Ukraine in 2020, mln UAH

Having considered the data depicted in the figure given above, we can see, that, visually judged, the ranking for the regions of Ukraine according to their GRP amount can be provisionally divided into two parts - the lower part includes the regions from Luhansk to Mykolaiv included and the upper part - from Cherkasy to Kyiv city included. Though, the GRP of Kyiv city is so big, that it stands out from all the other regions of Ukraine. It should be explained here, that due to the special status the capital of Ukraine has, it is included in all the statistical tables and lists separately from Kyiv region. Having double checked the assumption expressed earlier, it was proved by the GRP amount figures, that the lower part of the ranking for the regions of Ukraine

presented in Figure 1 includes the regions from Luhansk through Mykolaiv included, having the GRP amount from approximately four to ten bln UAH. The upper part of the said ranking includes the regions from Cher - kasy to Kyiv city included, having the GRP amount from ten to trillion UAH (in case of Kyiv city). If we pay a special attention at the top three regions from the ranking presented above, we see, that three different macro regions of Ukraine are presented there, meaning - the Northern, the Central and the Eastern ones. The highest position the representative of the Western macro region takes is 5, while the Sothern macro region is represented on its highest sixth position. To see what place in the ranking for the Ukrainian regions as for their share in the GRP total every region takes and to compare them to those taken in the ranking according to the GRP amount, let's follow the data presented in Figure 2.

public administration trade

Source: author's own elaboration on the basis of the data from (State Statistics Service of Ukraine, 2022)

Figure 2. Regional Share of Gross RegionalProduct ofUkraine in General Total in 2020, %

Having compared the positions of the regions in the rankings depicted in Figures 1 and 2, we see, that four regions changed their places in Figure 2 if compared to those in Figure 1. These are - Khmelnytskiy region took the 13^th place after Mykolaiv in Figure 1, having changed their places with each other in Figure 2. In addition, Kirovohrad region took the 19^th place in Figure 1 right after Volyn, having changed their positions with one another in Figure 2. All the other regions didn't change their places in the ranking as for the share in the GRP compared to those of the GRP amount. If we talk about the share of the GRP of each Ukrainian region, we cannot divide the ranking into two or three groups just like we did in the case with the previous ranking as the values of the said shares are not that clearly different as in the previous case. But we can group the regions according to the share values in the following way - the shares from one to two per cents of the GRP take Luhansk, Chernivtsi, Zakarpattya, Ternopyl, Kherson, Rivne, Volyn, Kirovohrad and Sumy regions. The shares from two to three per cents take Chernihiv, Ivano-Frankivsk, Zhytomyr, Mykolayiv, Khmelnytskiy and Cher - kasy regions. Vinnytsia region alone takes a little bit more than three per cents of the GRP, while the list of the region, taking from four to five per cents of the GRP is a little bit longer - Zaporizhzhya, Poltava and Donetsk. Odesa, Lviv and Kyiv regions take from five to six per cents of the GRP, while Dnipropetrovsk takes almost 9.5% with Kyiv city being the very top, making 24% of the GRP.

So, the effective public administration of any sphere of a human activity contributes not only to the faster and better development and more successful functioning of the said sphere but to the other spheres connected with it directly or indirectly. Effective public administration does not mean, that only one institution being it a state, local or civil one, should do one's best to deliver the best services possible, but the joint efforts of all the state and non-state institutions and organisations should serve the public good to the highest extend possible, especially in the times of such difficult challenges. The example of such a timely response to the needs of time is the decision of the Chamber of Commerce and Industry of Ukraine to simplify the procedure for certification of force majeure circumstances, given the extremely difficult situation our country is facing nowadays (Press service of the Chamber of Commerce and Industry, 2022). The results of the research show how effective the public administration of the Ukrainian regions work judging by the results of the Gross Regional product amounts and the shares the regions take in the said GRP. But, as it has been already stated above, the showed results are not to be praised/condemn for the Chamber of Commerce and Industry of Ukraine and its regional Chambers alone. The research showed the results of the joint work of the public administration officials and institutions of not only those indulging into the international trade issues alone, as no region can depend on only one economy sphere to function stably, but all those on whom the stable and successful functioning of any single region in particular and therefore of the whole country in general depends. The research itself as well as its results will be interesting and useful for the public administration officials, institutions and their employees indulged into all the spheres connected with international trade, representatives of academic world as well as decision makers of all the levels. The extreme importance of international trade in general and the agricultural products trade in particular, especially under the difficult challenges of nowadays, makes the presented research worth to be expanded and deepened. Though, the very challenges spoken above as well as their consequences are to be eventual limitations for the further research conduction.

References

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