Determining risks and threads in the conditions of factual loss of part of territory and economic potential of old industrial regions

Olena Yu. Snigova

Abstract


The article argues that escalation of the conflict at Donbas region has the primordial influence on the situation in Ukrainian economy. The statistical analysis of economic situation in Donetsk and Lugansk regions has been conducted. The financial and economic consequences of control loss over parts of Donetsk and Lugansk regions have been studied. It has been determined that Ukraine is subject to credit risks, despite restructuring and plans of reforms. It has been revealed that the most negative influence on the economy of Ukraine goes from the instability and uncertainty of situation at the East of Ukraine, loss of a prevalent part of industrial and natural potential of old industrial regions, investment attractiveness reduction and loss of confidence for banking sector. It has been argued that natural potential losses roughly deteriorate the energy security of a country based on coal share enlargement in energy balance and shell gas role increase in the fight for gas independence and natural gas price reduction. It has been determined that the loss of a part of industrial and natural potential, based at the territory uncontrolled by Ukraine, has been added by the increased risks for industrial enterprises‟ functioning practically at all territory of those and frontier regions due to diversions and terrorist acts threats. The factors deteriorating investment attractiveness of Donetsk and Lugansk regions have been found out. The possible losses of banking sector have been estimated connected with cancelling of clients‟ service at the territory, uncontrolled by Ukrainian authority. The influence of banking sector crisis on business activity shortening in Ukraine, and, in particular, on the industrial enterprises, forming basic branches of old-industrial regions, has been revealed. Risks and threats for Ukraine caused by the conflict at the East of Ukraine, have been determined. Recommendations as to stabilize macroeconomic processes and ease consequences for Ukraine have been given.

Keywords


national economy; old industrial regions; loss of territory and economic potential; risks and threats; mitigating / overcoming risks and threats

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References


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DOI: https://doi.org/10.15407/econindustry2015.02.020

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