FINANCING THE NEEDS OF THE DEFENCE SECTOR IN UKRAINE
DOI:
https://doi.org/10.37332/2309-1533.2020.7-8.3Keywords:
Key words, state budget, expenditures, budget request, functional classification of expenditures, military activity, national security.Abstract
Vatamanyuk-Zelinska U.Z., Bednarchuk V.V., Mlintsova A.O. FINANCING THE NEEDS OF THE DEFENCE SECTOR IN UKRAINE
Purpose. The aim of the article is to comprehensive study of the financing of expenditures for the needs of the defence sector in Ukraine, practical study and analysis of their composition and dynamics for the national security and defence of the state in the ongoing aggression of the Russian Federation.
Methodology of research. A set of general scientific research methods was used to achieve the defined goal and objectives, which made it possible to present directions for improving the process of financing the expenditures of the State Budget of Ukraine for the needs of the defence sector. The scientific literature, normative and legislative documents on the topic of scientific research are considered. Thus, descriptive statistics were used in the analysis of data on the amount of financial support for military expenditures from the state budget. A method of comparison was used to identify trends and patterns in the financing of expenditures for the needs of the defence sector of the state. It allowed to identify the dynamics of defence expenditures on their functional basis.
With the help of a systematic approach it was possible to study the patterns of financing the expenditures of the Ministry of Defence of Ukraine and to identify the need to provide budget funds for innovative developments and capital investments in the production of military equipment and military education. Methods of classification (typology) were identified to systematize the factors that have a significant impact on strengthening the defence and national security of Ukraine, and thus on the social and economic development of our state.
Findings. The main reasons for the reduction of funding for expenditures for the needs of the defence sector in Ukraine are identified, which are primarily: the lack of budget requests from the Ministry of Defence of Ukraine, which are not registered by the State Treasury Service of Ukraine; imperfection of the legal and regulatory framework in the field of financing military expenditures in relation to their ratio to GDP; lack of financial component in the strategic plans for the development of the defence complex of Ukraine. This is accompanied by negative social and economic phenomena and a tense political situation in the country due to hostilities in the East. The main directions of solving problems in the field of financing defence expenditures in Ukraine are substantiated, which include: bringing in line with the provisions of certain regulations governing the relationship between expenditures for the needs of the defence industry and GDP; establishing the projected amounts of expenditures for the medium and long term, providing for their mandatory amounts in the financial component of the documents on the strategic planning of the development of the defence-industrial complex of Ukraine; increase in capital transfers of the special fund of the State Budget of Ukraine to finance the needs of the state defence sphere, taking into account the need for innovative developments and capital investments in the production of military equipment; formation of the state order for the industrial enterprises of machine-building branch, capable to make accessories for needs of a defence industrial complex; reducing corruption by ensuring greater transparency in the governance of military authorities and the implementation of NATO procedures, principles and standards.
Originality. The directions of improvement of practical approaches in the field of management of budgetary funds directed on financing of the defence sphere in Ukraine are singled out.
Practical value. The results of scientific research can be implemented in the activities of public administration in terms of the use of measures of operational management of public expenditures on defence and national security in a military conflict.
Key words: state budget, expenditures, budget request, functional classification of expenditures, military activity, national security.
References
Kyrylenko, O. (2019), “Modern tendency of defense expenditures from the State budget of Ukraine”, Svit finansiv, no. 3(60), pp. 179-188.
Romanovska, Yu.A. and Urbanovych, V.A. (2018), “Expenditure on defense: comparative analysis of the Ukraine and NATO countries”, Hroshi, finansy i kredyt, Iss. 28-2, pp. 117-120.
Cheberiako, O. and Smal, A. (2012), “The impact of macroeconomic indicators on the financing of state defense needs”, Visnyk Kyivskoho natsionalnoho un-tu imeni Tarasa Shevchenka,Ser. “Ekonomika”, no. 138, pp. 45-49.
The Verkhovna Rada of Ukraine (1996), The Constitution of Ukraine dated 28.06.1996, no. 254k/96-VR. Update date: 01.01.2020, available at: https://zakon.rada.gov.ua/laws/show/254%D0%BA/96-%D0%B2%D1%80#Text (access date October 11, 2020).
The Verkhovna Rada of Ukraine (2018), The Law of Ukraine “On the national security of Ukraine” dated 21.06.2018, no. 2469-VIII. Update date: 24.10.2020, available at: https://zakon.rada.gov.ua/laws/show/2469-19#Text (access date October 25, 2020).
The Verkhovna Rada of Ukraine (2010), The Law of Ukraine “Budget Code of Ukraine” dated 08.07.2010, no. 2456-VI, Vidomosti Verkhovnoi Rady Ukrainy, no. 50-51, art. 572.
Ministry of Finance of Ukraine (2011), Decree “Functional classification of expenditures and budget lending” dated 14.01.2011, no. 11, available at: https://zakon.rada.gov.ua/rada/show/v0011201-11#n30 (access date October 12, 2020).
Anokhin, V.M. and Semenikhin, I.M. (2007), Finansove zabezpechennia viiskovoi chastyny [Financial support of the military unit], tutorial, VIKNU, Kyiv, Ukraine, 380 p.
“State Treasury Service : official site”, available at: https://www.treasury.gov.ua/ua (access date October 15, 2020).
“Service for determining the codes of economic activities according to NACE-2005 and CEA-2010”, available at: http://kved.ukrstat.gov.ua/KVED2005/75/22/KVED05_75_22_0.html (access date October 15, 2020).
“Ministry of Finance. Indexes”, available at: https://index.minfin.com.ua/ua/finance/budget/gov/ (access date October 16, 2020).
“Global military expenditure” / Stockholm international peace research institute, available at: https://www.sipri.org/media/press-release/2020/global-military-expenditure-sees-largest-annual-increase-decade-says-sipri-reaching-1917-billion (access date October 18, 2020).
“Ukraine in terms of defense spending in 2019 rose from 41st to 35th place - SIPRI : site ARMIIAINFORM”, available at: https://armyinform.com.ua/2020/04/ukrayina-za-obsyagom-oboronnyh-vydatkiv-u-2019-roczi-pidnyalasya-z-41-go-na-35-miscze-sipri/ (access date October 18, 2020).
“The draft budget for 2021 reduces funding for the Ministry of Defense : Industrial Portal. Site no. 1 about the development and industry of Ukraine”, available at: https://uprom.info/news/vpk/u-proyekti-byudzhetu-na-2021-rik-zmenshuyut-finansuvannya-ministerstva-oborony/ (access date October 20, 2020).
“Statistical collection of the Ministry of Finance "Budget of Ukraine - 2019"”, available at: https://mof.gov.ua/uk/statistichnij-zbirnik (access date October 20, 2020).
The President of Ukraine (2019), Decree “On proposals to the Budget Declaration for 2020-2022 on articles related to national security and defense of Ukraine” dated 25.04.2019 no. 167/2019, available at: https://zakon.rada.gov.ua/laws/show/n0003525-19#Text (access date October 20, 2020).
Downloads
Published
Issue
Section
License
Open-access articles (open-access journals)
Authors whose articles are published in open-access retain all rights to the content of the articles.
Open access articles are committed to be published under Creative Commons Attribution (CC BY) 4.0. This license allows others to distribute, edit, correct and build upon your work, even commercially, as long as they indicate your authorship. Detailed information at Creative Commons site: https://creativecommons.org/licenses/by/4.0/
Permissions for open-access journals
If the article is published in open-access under CC BY 4.0 or CC BY-NC 4.0 (which was possible till the 15th of December, 2018) licenses, users may reproduce it in accordance with their terms.
Additionally, if the article had been published under CC BY-NC 4.0 (this license authorizes others to download your works and share them with others as long as they indicate your authorship, but they can’t use them commercially in any case.), the use for the following commercial purposes requires permission:
– reproduction of content in a work or product intended for sale;
– reproduction in presentations, brochures or other marketing materials used for commercial purposes;
– distribution of the content to promote or market a person, product, course, service or organization;
– text and data mining for the purpose of creating a saleable product or product which benefits from promotional or advertising revenue;
– use of the content by a commercial entity or individual for the purposes of remuneration, directly or indirectly through sale, licensing, promotion or advertising;
– linking to the content (in an email, webpage, portable electronic device or otherwise) for the specific purpose of marketing or advertising a person, product, course, service or organization for commercial benefit.
For further details and permission requests, please contact.
