New challenges for the defense industrial enterprises of Ukraine in the conditions of the global pandemic
Keywords:
defense budget, defense industrial enterprises, defense equipment and weapon, global pandemic, Ukraine.
Abstract
The global COVID-19 pandemic has made significant corrections to international trade in many countries around the world. The article is devoted to topical issues of identifying new challenges that have arisen at entities of the defense industry of Ukraine in the context of the COVID-19 pandemic. Comparative analysis of forced changes in defense budgets of different countries and statistical analysis of industries that are connected by supply chains with enterprises of the defense industry of Ukraine, which suffer from the introduction of quarantine restrictive measures, proves restrictions on interstate trade, disruption of domestic and global supply chains and significant losses in the economy. This situation may have medium-term consequences for the country's defense budget, and the Ministry of Defense of Ukraine will be forced to apply optimization plans for effective measures of such a scale as modern sequestration. India, Thailand, and South Korea are identified as the most risk-sensitive counterparties of Ukrainian defense exporters due to the reorientation of finances to the priority segment of medicine to eliminate the consequences of the pandemic. To minimize the risk of non-performance of contractual obligations, it is recommended to review the basic terms of supply of goods under the contracts with risk-sensitive counterparties and make adjustments to force majeure clauses in regard to epidemics, as well as possible revise the contract's payment terms.
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Вaltnews. (2020). don’t have war? How a pandemic will force you to cut defense spending. Recovered from https://lv.baltnews.com/mir_novosti/20200502/1023864651/Ne-do-voyny-Kak-pandemiya-zastavit-sokratit-traty-na-oboronu.html
Вaltnews. (2020). How the coronavirus "undermined" the American defense. Recovered from https://lv.baltnews.com/mir_novosti/20200310/1023737840/Kak-koronavirus-podtochil-amerikanskuyu-oboronku.html
Begma, V. & Skliar, N., (2013) Impact of export control functions on the level of national security. Economic Annals-XXI. 7-8(1), 18-21.
Darling, D. (April 16, 2020). South Korea Plans Defense Budget Reduction in Wake of COVID-19 Pandemic [Message in a blog]. Defense & Security Monitor. Recovered from https://dsm.forecastinternational.com/wordpress/2020/04/16/south-korea-plans-defense-budget-reduction-in-wake-of-covid-19-pandemic/
Decree No. 61/202, President of Ukraine. On the structure of the defense plan of Ukraine, Kyiv, Ukraine, 03 March 2020. Recovered from https://zakon.rada.gov.ua/laws/show/61/2020
Decree № 59/2020, President of Ukraine. On the Decision of the National Security and Defense Council of Ukraine of February 18, 2020 "On the main indicators of the state defense order for 2020 and 2021, 2022", Kyiv, Ukraine, February 27, 2020. Recovered from https://zakon.rada.gov.ua/laws/show/59/2020#Text
Defense Industrial Courier. (2020). Ukraine will buy three large consignments of weapons from the United States. Recovered from http://opk.com.ua/%D1%83%D0%BA%
Egel, D., Shatz, H., Kumar, K. & Harshberger, Т. (2020). Defense Budget Implications of the COVID-19 Pandemic. RealClearDefense. Recovered from https://www.realcleardefense.com/articles/2020/04/07/defense_budget_implications_of_the_covid-19_pandemic_115178.html
Erlanger, S. (2020). Pandemic Erodes Europe’s Ambitions for a More Independent Military. The New York Times, p.9, Section A. Recovered from https://www.nytimes.com/2020/05/23/ world/europe/defense-autonomy-europe-coronavirus.html
Gilani, І. (2020). COVID-19 affects India’s defense spending, acquisition. Anadolu Agency. Recovered from https://www.aa.com.tr/en/asia-pacific/covid-19-affects-india-s-defense-spending-acquisition/1833527
Global Preparedness Monitoring Board. (2019). A world at risk: annual report on global preparedness for health emergencies. Geneva: World Health Organization. Recovered from https://apps.who.int/gpmb/assets/annual_report/GPMB_annualreport_2019.pdf
Gorbulin, V. (2019). Ensuring the defense and security of Ukraine: current problems and ways to solve them. Bulletin Of The National Academy Of Sciences Of Ukraine, (9), 3-18.
Hordon. (2020). Ukroboronprom suggests that the coronavirus will strike at arms exports. Gordonua. Recovered from https://gordonua.com/ukr/news/money/-ukroboronprom-dopuskaje-shcho-koronavirus-vdarit-po-eksportu-ozbrojen- 1497672.html
Institute of Tax Reforms. (2020). Letter from think tanks to the Government, the Verkhovna Rada of Ukraine and the President on quarantine measures and their impact on the economy dated March 24, 2020. Kyiv, Ukraine: Institute of Tax Reforms. Recovered from https://ngoipr.org.ua/news/lyst-vid-analitychnyh-tsentriv-do-uryadu-vru-ta-prezydenta-shhodo-karantynnyh-zahodiv-ta-yih-vplyvu-na-ekonomiku/
Korb, L.J. (2020). Pandemic spending will force US defense budget cuts—some of which should come from nuclear weapons programs. Bulletin of the Atomic Scientists. Recovered from https://thebulletin.org/2020/05/pandemic-spending-will-force-us-defense-budget-cuts-some-of-which-should-come-in-nuclear-weapons-programs/
Kramar, A. (2020). Litmus paper. The Ukrainian Week. Economy. Recovered from https://tyzhden.ua/Economics/242175
Ministry of Economic Development, Trade and Agriculture of Ukraine. (2019). Export strategy of Ukraine: Sectoral and cross-sectoral export strategies. Recovered from https://www.me.gov.ua/Documents/MoreDetails?lang=uk-UA&id=4caaddb5-094f-4dab-8ac9-da323b41ad65&title=SektoralniTaKrossektoralniEksportniStrategii
Ministry of Finance of Ukraine. (2020). In November 2020, the general fund of the state budget received UAH 85.5 billion - with over the fulfillment of UAH 5 billion. Ministry of Finance of Ukraine. December 01, 2020. Recovered from https://mof.gov.ua/uk/news/u_listopadi_2020_roku_do_zagalnogo_fondu_derzhbiudzhetu_
nadiishlo_855_mlrd_grn__z_perevikonanniam_na_5_mlrd_grn-2571
Rojas-Bahamón, M., & Arbeláez-Campillo, D. (2020). Panorama de la implementación de los sistemas de gestión ambiental en la Amazonia Colombiana. Revista Científica Del Amazonas, 3(6), 48-64. https://doi.org/10.34069/RC/2020.6.04
Techakitteranun, H. (2020). Coronavirus: Thai army slashes budgets amid backlash over armament procurement. The Straits Times. SPH Digital News. Recovered from https://www.straitstimes.com/asia/se-asia/coronavirus-thai-army-slashes-budgets-amid-backlash-over-armament-procurement
Tkachenko, N., Kurmaiev, P., Seliverstova, L., & Pozhydaeva, M. (2020). Features of financing NATO’s armed forces. Amazonia Investiga, 9(26), 117-124. https://doi.org/10.34069/AI/2020.26.02.13
Tolok, P. (2020). Financial security of Ukrainian defense companies in cooperation with the environment (PhD thesis). National Institute for Strategic Studies. Kуiv, Ukraine. Retrieved from https://niss.gov.ua/sites/default/files/2020-02/tolok_disertacia.pdf
Trade unions of aircraft builders of Ukraine. (2020). Results of the Rating among enterprises aviation industry of Ukraine for 9 months of 2020. Recovered from http://www.ukrprofavia.org.ua/2011-01-24-12-40-38.html
Ukrainian Military Pages. (2020). How much and which weapons will the Ministry of Defense buy in 2020. 11 May 2020. Recovered from https://www.ukrmilitary.com/2020/05/zakupivli-mou.html
Yeo, М. (2020). China announces $178.2 billion military budget. Defense News, Asia Pacific. Recovered from https://www.defensenews.com/global/asia-pacific/2020/05/22/china-announces-1782-billion-military-budget/
Zgurets, S. (2019). The pursuit of combat high-tech. Defense Express, October 08, 2019. Recovered from https://old.defence-ua.com/index.php/statti/8630-zbroya-ta-bezpeka-2019-startuyemo-zavtra
Published
2021-03-05
How to Cite
Skliar, N., Begma, V., & Vrublevska, O. (2021). New challenges for the defense industrial enterprises of Ukraine in the conditions of the global pandemic. Amazonia Investiga, 10(37), 45-55. https://doi.org/10.34069/AI/2021.37.01.4
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