DOI: https://doi.org/10.34069/AI/2024.81.09.5
How to Cite:
Rohatiuk, I., Ivchenko, B.-Y., Kanfui, I., Solovyov, E., Yermenchuk, O., & Denysenko, O. (2024). Economic security of Ukraine in wartime: challenges and prospects. Amazonia Investiga, 13(81), 78-85. https://doi.org/10.34069/AI/2024.81.09.5
Economic security of Ukraine in wartime: challenges and prospects
Економічна безпека України у воєнний час: виклики та перспективи
Received: July 1, 2024 Accepted: September 15, 2024
Written by:
Ihor Rohatiuk
https://orcid.org/0000-0002-3374-4597
WoS Researcher ID: GCP-0395-2022
Doctor of Law Sciences, Professor, Professor of the department of criminal procedure and forensics at the National Academy of Security Service of Ukraine, Ukraine.
Bohdana-Yuliya Ivchenko
https://orcid.org/0000-0002-5810-6065
WoS Researcher ID: LLK-9378-2024
Candidate of Law Sciences, Inspector of the Department of Educational and Methodical Work at Kharkiv National University of Internal Affairs, Ukraine.
Ivan Kanfui
https://orcid.org/0009-0003-2083-9647
WoS Researcher ID: LFV-2421-2024
Candidate of Law Sciences, Associate Professor of the Department of Criminal Law and Procedure of the Kyiv University of Law of the National Academy of Sciences of Ukraine, Ukraine.
Eduard Solovyov
https://orcid.org/0000-0001-6433-004X
WoS Researcher ID: HFU-6297-2022
Chief of the Investigation Department of the Main Directorate of the National Police in Mykolaiv region, Ukraine.
Oleksandr Yermenchuk
https://orcid.org/0000-0001-5722-7183
WoS Researcher ID: AAP-5548-2021
Doctor of Law Sciences, Associate Professor, Leading researcher of the Research Laboratory, National Academy of Internal Affairs, Ukraine.
Olga Denysenko
https://orcid.org/0009-0004-6945-1843
WoS Researcher ID: LKN-6178-2024
Ph.D., student of the Department of Postgraduate and Doctoral Studies at the at the National Academy of Security Service of Ukraine, Ukraine.
Abstract
The Russian invasion of Ukraine has dramatically impacted the country’s economic security. This paper investigates the critical role of economic security within the broader framework of national security in Ukraine under wartime conditions. The study highlights the significant overlap between economic stability and national resilience while analyzing Ukraine’s current economic security model, detailing components such as financial, industrial, food, and energy security. The authors argue that legal and institutional reforms, alongside strategic efforts to enhance market competition, investment climate, and technological innovation, are crucial for sustaining economic growth amidst conflict. Additionally, the research draws parallels between Ukraine’s security framework and similar strategies in the EU countries and the United States, suggesting that a more integrated approach to economic and national security could bolster Ukraine’s long-term stability and global competitiveness. The authors, with their academic perspectives and expertise as law professors and enforcement officials, provide in-depth insights into the legal and institutional challenges faced by Ukraine in maintaining its economic security during wartime.
Keywords: national security strategy, economic security strategy, gross domestic product, public corruption, economic crime, law enforcement.
Анотація
Російське вторгнення в Україну кардинально вплинуло на економічну безпеку країни. У цій статті досліджується критична роль економічної безпеки в ширшому контексті національної безпеки України в умовах воєнного часу. Дослідження підкреслює суттєве збігання між економічною стабільністю та національною стійкістю під час аналізу поточної моделі економічної безпеки України, деталізуючи такі компоненти, як фінансова, промислова, продовольча та енергетична безпека. Автори стверджують, що правові та інституційні реформи разом із стратегічними зусиллями щодо посилення ринкової конкуренції, інвестиційного клімату та технологічних інновацій є вирішальними для підтримки економічного зростання в умовах конфлікту. Крім того, дослідження проводить паралелі між структурою безпеки України та подібними стратегіями в країнах ЄС і Сполучених Штатах, припускаючи, що більш інтегрований підхід до економічної та національної безпеки міг би зміцнити довгострокову стабільність і глобальну конкурентоспроможність України. Автори, завдяки їхнім академічним поглядам і досвіду як професорів права та співробітників правоохоронних органів, пропонують глибоке розуміння правових та інституційних проблем, з якими стикається Україна під час підтримки своєї економічної безпеки в умовах війни.
Ключові слова: стратегія національної безпеки, стратегія економічної безпеки, валовий внутрішній продукт, публічна корупція, економічна злочинність, правоохоронна діяльність.
Introduction
As a universal concept within the broad scope of global security architecture, economic security strategy can be defined as a comprehensive plan devised by a government to ensure stability, resilience, and sustainable growth of the national economy. It is of mostly protectionist nature (which makes sense) and is also aimed at protecting nation against various economic threats, at maintaining public confidence in the economy and its key parameters, while also serving to strengthen the national security framework by addressing economic vulnerabilities and leveraging economic growth opportunities.
Among various approaches to better interpretation of economic security as a complex, interdisciplinary phenomenon, we were able to outline its key elements, which include: risk assessment, policy framework, developing and implementing policies that address risks and promote economic stability; institutional capacity; economic diversification; infrastructure development; military capabilities research and development; international cooperation with partners and allies.
Effective economic security strategy (National Security and Defense Council of Ukraine, 2021), which obviously any modern nation seeks to implement, integrates these elements into one robust framework, which safeguards the economy from potential threats while fostering sustainable development and resilience of a given nation.
It is noteworthy that economic security is not an isolated phenomenon but rather a component of national security. According to some scholars, “the further development of Ukraine, the implementation of the European integration course, and the very existence of our state in a period of threats and danger even more than in peacetime require the activation of radical reform processes, first of all, in the field of organization and activity of the national security and defense sector” (Chernysh et al., 2023).
The purpose of this research paper is to clarify the essence and key elements of the national security and economic security models of Ukraine as well as to determine the nature of their relationship. On the basis of such a complex analysis with elements of scientific comparison, which form the conceptual basis of the mechanism for ensuring the security of the state, it is planned to determine the main parameters of the security model of Ukraine at the current stage of its statehood development.
The concepts of economic and national security are indeed deeply integrated. In fact, they cannot be exercised separately by the national government: economic security is one of the core pillars of the national security framework; at the same time, national security provides economic stability and development, enables competitive forces of the market economy and also protects national markets from external threats, such as war, annexation, embargo, etc.
The structure of the paper is as follows: 1) the legal framework, in particular, the Law of Ukraine “On the National Security of Ukraine” is researched; 2) national economic security components, including industrial, demographic, energy, foreign economic, investment and innovation, macroeconomic, food, social, and financial security, are discussed; 3) authors’ comments are presented, suggesting that further in-depth research into Ukraine’s economic strategy under wartime conditions is required. Overall, our analyses reflects the intricate relationship between the economic and security sectors in Ukraine, highlighting the importance of both for the country’s stability and future development
Literature review
Our analyses of the available academic literature on the topic at hand reveals that issues of economic security remain a central part of the agenda for both policy makers, private sector representatives and academic researchers. Even more so, this topic is of extreme practical importance, not as some hypothetical concept.
A few scholars have devoted their research to the concepts of national and economic security and their individual components, including such authors as T. Podkovenko (2021), V. Tretyak & T. Gordienko (2010), Yu. Khatnyuk (2020), V. Antonov (2017). One of the co-authors of this paper has also partially explored the issues of economic security within the broader parameters of national security (Kamensky, 2023). At the same time, important theoretical and applied issues of the correlation between provisions of the National Security Strategy and the Economic Security Strategy of Ukraine remain outside the focus of the scientific community today, as well as very limited (fragmentary) consideration of similar program documents in the partner countries of Ukraine.
A group of Ukrainian legal and economic scholars have recently published a comprehensive research paper on the topic of ensuring economic security of Ukraine within the context of the association agreement with the European Union. It highlights key areas of cooperation, including trade, energy, and institutional reforms, aimed at aligning Ukraine with European standards. The authors underline the fact that the agreement provides opportunities for sustainable economic growth, though challenges, such as political instability and external pressures, remain strong. The study calls for strategic efforts to ensure long-term economic stability. Also, a conclusion is formulated that in the modern world, national security cannot be achieved without ensuring a sufficient level of economic security. Using the analytical system applied by the authors, current values of specific indicators can be calculated, thus allowing for a comparison with standard values to analyze various elements of Ukraine’s economic security (Mohilevskyi et al., 2021).
A recently published paper “Economic Security of Ukraine and its Structural Components: Economic and Legal Aspects” examines the economic security model of Ukraine, while focusing on a combination of economic and legal dimensions. It analyzes key indicators of economic security and compares them to standard benchmarks, also identifying the risks and vulnerabilities that threaten Ukraine’s economic stability. The authors of the paper emphasize the importance of timely and effective management of these risks, they also advocate for robust legal frameworks and economic policies to mitigate negative factors and strengthen the nation’s overall security (Kuchmak et al., 2024).
Finally, a recently published paper on the essential elements and purpose of the state’s economic security strategy emphasizes the critical role of creating a secure environment for effective public administration, which relies heavily on achieving the goals of economic security. This involves addressing various structural components and challenges unique to economic security, distinguishing it from other security levels. The text highlights pressing issues, which threaten Ukraine’s economic security, such as high inflation, lack of competitiveness, weak investment policies, high level of unemployment, and corruption, which necessitate immediate government action (Golovko, 2019). It elaborates the concept that national security, through effective public administration, is central to achieving the ultimate goal of economic security and prosperity.
The reader should bear in mind that despite its prominence in recent debates, the term ‘economic security’ is only vaguely, if at all, defined. As Western commentators put it, this term has been used in varying contexts, and at times has been employed as a catch-all for policies aimed at mitigating all kinds of economic shocks, as well as a wide range of ‘national/physical security’ measures. This conflation of different types of risk can unsurprisingly lead to poorly targeted government interventions (McCaffrey & Poitiers, 2024).
Thus, we should be aware of different approaches to measuring economic security parameters as well as understanding the impact of war not only on the national but on the global economy as well.
Methodology
This paper employs several analytical methods with the goal of providing a better academic understanding of the concept of economic security and its key elements. These methods are worth explaining as used to further the research goals.
In summary, the methods include a combination of legal analysis, comparative analysis, content analysis, synthesis, critical review, case-based reasoning, and interpretation to explore the relationship between Ukraine’s national and economic security strategies. These methods help in structuring the research, understanding policy impacts, and providing recommendations for future policy and research directions. Carefully crafted research tools have enabled us to better analyze key features of the national economic security model as well as to compare this model with the overall national security paradigm.
Results and Discussion
We would like to start our analyses with a critical acknowledgment of its limits and potential analytical deficiencies. Though the study presents a thorough theoretical and analytical exploration of Ukraine’s national and economic security, there are notable limitations that should be acknowledged. First, the research lacks quantitative data to substantiate the relationships between different components of economic and national security, such as the direct impact of military threats on economic stability. While qualitative analysis and theoretical models are valuable, the absence of statistical data or empirical measurements limits the study’s ability to quantify the magnitude of the identified threats and their economic consequences.
Additionally, the focus on Ukraine’s unique geopolitical and wartime context poses challenges in generalizing the findings to other countries or regions. Ukraine’s experience, particularly with external aggression and internal economic instability, may differ significantly from the security conditions faced by other nations, making the transferability of these insights to different contexts less applicable. These limitations suggest the need for further research that incorporates quantitative methods and comparative studies across other geopolitical settings.
As stated in the academic literature, formation and implementation of the state policy of the national security in Ukraine is one of the most important problems of effective management of a society that is being transformed. Ukrainian practice demonstrates that the implementation of doctrines, strategies, concepts and programs in the field of national security must integrate all aspects of the political activity of the state and is based on sound theoretical foundations, as well as on historical experience. Today, the theory of national security is undergoing a stage of dynamic development in view of the unprecedented conditions in which our state has found itself due to unprovoked military aggression.
It should be emphasized that the Law of Ukraine “On the National Security of Ukraine” (Law of Ukraine No. 2469-VIII, 2018) is the key official “guideline” regarding the concept and content of national security in this country. This law provides, in particular, that the national security of Ukraine essentially embodies protection of state sovereignty, territorial integrity and the democratic constitutional order as well as other national interests of Ukraine from real and potential threats. In turn, state security is the protection of state sovereignty, territorial integrity, democratic constitutional order and other vital national interests from real and potential threats of non-military nature. Therefore, a critical comparison of both normative definitions demonstrates that national security is aimed at protecting Ukraine from threats of primarily military nature; instead, state security represents the state of protection of Ukraine from various threats of a different, non-military nature. This distinction is of key importance in the context of the development of various government strategies in Ukraine, as well as in the activity of authorized state authorities and, to a lesser extent, local self-government bodies.
Further, part 1 of Art. 3 of the discussed Law specifies the main vectors of state policy in terms of national security and defense. It is aimed at protecting: a person and a citizen – their life, dignity, constitutional rights and freedoms, as well as ensuring safe living conditions; separately, society – its democratic values, well-being and conditions for sustainable development; the state itself – its constitutional system, sovereignty, territorial integrity and inviolability; territory and natural environment – from emergency situations (Law of Ukraine No. 2469-VIII, 2018). Thus, we are referring to the main parameters of protecting interests of key “stakeholders” for any modern state – a person (citizen), society, state, territories (environment). These key elements are arranged in the order of their importance for the statehood – person and citizen are put in the first place, which emphasizes the human-centered approach by the democratic, rule of law-based state.
Once again, it is important to underline the fact that key tasks of national and economic security overlap. In particular, Sec. 53 of the National Security Strategy emphasizes the need to ensure sustainable and dynamic growth. To this end, the following measures are proposed: 1) developing market competition, ensuring demonopolization of the economy and the removal of economic relations from the shadows; 2) protecting property rights; 3) ensuring deregulation and preventing pressure on business; 4) creating competitive conditions for attracting investments, in particular foreign ones; 6) ensuring stable functioning of the financial system, consistency of the monetary policy and increase of trust in national financial institutions; 7) improving the legislation on the organization of judicial power and ensuring fair justice; 8) developing research infrastructure, ensure effective interaction of scientists with the public and private sector, stimulate innovation and introduce the latest technologies; 9) modernizing transport infrastructure, including roads, railways, pipelines, airports, sea and river ports (Decree of the President of Ukraine No. 392/2020, 2020).
One should also keep in mind that ensuring Ukraine’s national security in the context of ongoing European integration relies, among other factors, on the the system of state and private actors (Nakonechna et al., 2022).
Based on the results of our own analyses of the National Security and Economic Security Strategies of Ukraine, we were able to elaborate on the comprehensive structure of the latter. Thus, the economic security model of Ukraine includes several integrated components, as reflected in the following diagram.
Figure 1. Key elements of the economic security framework in Ukraine.
Source: Authors’ own research.
An interim conclusion here: national and economic security strategies are related documents, at least partially, in their content. A careful analysis of their provisions demonstrates that the national security and defense capability of the country cannot be ensured without a strong economic basis, without economic stability of the state. Conversely, it is impossible to develop one’s own national model of a market economy without ensuring a regime of its protection against both external (for example, military aggression, terrorism, cyberattacks and various hybrid threats) and internal (economic crime, insecurity of property rights, widespread corruption, prevalence of fraudulent practices in business relations) threats.
In particular, various issues related to the so-called “shadow economy” and, more specifically, to the white-collar crimes remain a big challenge for both policy makers, law enforcement agencies and members of the legitimate business community. We have previously addressed such challenges in our research (Minchenko et al., 2021; Kamensky et al., 2023).
As explained by Ukrainian economists, the main pillars of Ukraine’s economic security within its national security framework include industrial, demographic, energy, foreign economic, investment and innovation, macroeconomic, food, social, and financial security (Macroeconomic Digest of Ukraine, 2024). Each of them is an element of the much more complex and wide scale phenomenon of economic security. In the current context, ensuring economic security is especially significant, since it remains fundamental to maintaining sovereignty, competitiveness, defense capabilities, and social stability, while also impacting global economic dynamics (Kuchmak et al., 2024).
As a personal reflection, we and some other commentators believe that some of the mentioned national programs, such as energy security and food security strategies, should be viewed as part of the broader Economic Security Strategy (National Security and Defense Council of Ukraine, 2021). Indeed, prior analyses has revealed that Russian missile and drone strikes against Ukrainian energy grid have targeted mostly Ukrainian industrial production capabilities, the country’s ability to provide various services (Sullivan & Kamensky, 2024).
A recently published report “Toward a U.S. Economic Security Strategy”, prepared by a group of American experts, explores how the United States can strengthen its economic security in response to various global challenges, such as supply chain disruptions, technological shifts, and geopolitical tensions. It assesses U.S. economic tools, including tariffs, export controls, and sanctions, while also identifying areas for improvement in domestic agency coordination and international cooperation. The report recommends further enhancement of strategic collaboration with G7 partners by promoting investment, while also building technological resilience, with a focus on long-term economic security and global competitiveness (Benson et al., 2024).
This policy report and similar documents by leading policymakers and experts reveals the fact that every nation has a vested interest in strengthening its national security model, while also understanding all challenges of the modern globalized world. Ukraine is not and should not be an exception here.
At the same time, the space for future scientific research in this direction remains open. We believe that this paper will at least partially address new concepts, principles and challenges that Ukrainian economic strategy faces, especially under the wartime conditions.
Other researchers propose to widen the scope of challenges that the Ukrainian economy currently faces. Among them: the presence and aggravation of the economic crisis in Ukraine in the context of armed aggression by the Russian Federation; growth of corruption; overall deterioration of the population’s welfare and increase of unemployment; significant “black market” component in the economic structure; sharp drop in real GDP value due to a number of macro factors; loss of investment attractiveness of Ukraine (Skoruk, 2016). Unfortunately, these obstacles have been negatively affecting Ukrainian emerging economy model for several years now.
Conclusion
Based on our research of some pressing issues of the Economic Security Strategy, the following conclusive remarks can be formulated.
First, this study presents a novel perspective by emphasizing that economic security is not just a component but a critical pillar of Ukraine’s national security framework. It demonstrates that economic stability and resilience are indispensable for safeguarding sovereignty and territorial integrity, while also playing a vital role in enabling military defense, social cohesion, and institutional reforms amidst ongoing conflict.
Second, a key contribution of this research lies in its identification of the primary threats to Ukraine's economic security – corruption, political instability, energy dependence, and external economic pressures – within the specific context of wartime conditions. The study offers strategic recommendations, such as legal reforms and enhanced market regulation, which are tailored to reducing economic vulnerabilities in sectors like energy and trade, directly addressing the challenges heightened by external aggression.
Third, the originality of this work is further highlighted by its call for continued research into the correlation between national and economic security, particularly by advocating for integrated policy frameworks that reflect Ukraine’s unique geopolitical challenges. This study sets the stage for future explorations into how global economic trends intersect with Ukraine’s security, and assesses the effectiveness of existing strategies in countering both domestic and foreign threats.
Finally, the study provides a unique contribution to the discourse on institutional reform, emphasizing that strengthening Ukraine's capacity in law enforcement and judicial reform is fundamental to securing long-term economic stability. It specifically underlines the importance of addressing systemic challenges like property rights protection, anti-corruption measures, and business transparency to create a stable economic environment that can attract sustainable investments, particularly in a post-war reconstruction context.
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