Academic journal article Journal of Entrepreneurship Education

The Influence of the Military and Political Shocks on the Economic Potential of Agribusiness Ukraine

Academic journal article Journal of Entrepreneurship Education

The Influence of the Military and Political Shocks on the Economic Potential of Agribusiness Ukraine

Article excerpt

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INTRODUCTION

The current political and economic situation is characterized by destabilizing processes that lead to significant complications of market conditions of enterprises performance, including ukrainian agribusiness enterprises. Recently, business activity of agribusiness enterprises in Ukraine is characterized by greater price uncertainty, not only while the purchasing of raw materials but also at selling their products. Such uncertainty affect numerous factors, reflecting the acceleration of markets redistribution, changes in pricing and fiscal policy, inflation, reducing the consumers purchasing power, but the most important among them are-the military and political factor. Under these conditions, the operating results of agribusiness enterprises are unpredictable; many of them teeter on the brink of zero return or are in zone of unprofitability and threatening of breakdown; so the scientists' attention is increasingly attracted to problem of solving the complex of issues to ensure stable operation of enterprises in difficult conditions of hybrid war in the country. There are currently several regions in the world, the economics of which are developing specifically and separately from the country to which they are included. This is Prydnistrovia, the territory of Moldova occupied by Russian troops in 1991, Abkhazia occupied the territory of Georgia with Russian troops in 2008 and Donbas, Crimea, the territory of Ukraine occupied by Russia in 2014.

THE ANALYSIS OF RECENT RESEARCH AND PUBLICATIONS

Theoretical and practical issues of formation and effective functioning of the agribusiness companies are the subject of research of Ukrainian scientists such as (Andrijchuk, 2005; Dem'ianenko, 2011; Il'chuk, 2002; Zbars'ky, 2010; Nelep, 2004; Olson, 2013; Sargan, 1958; Miller, 1985; Blair, 1985; Lenzen, 2001). In their works these scientists have disclosed the organizational and economic features of agribusiness enterprise functioning, assessed trends in their development, but the issue of agribusiness enterprises' activity during political, military and economic crises have not been considered in-depth.

Theoretical and methodological and practical aspects of constructing models of interindustry balance of the economies of the region have devoted their works to (Leontiev, 1997; Neumann, 1944). However, the scientific works of these scientists did not reflect the issue related to the assessment of modern economic systems in the region, using models of interregional balance in the concept of reintegration and development of agribusiness in the context of military conflicts in a separate region and the construction of such models at the regional level.

PROBLEM DEFINITION

The purpose of the article is to analyse the current state and the operation of agribusiness enterprises and define prerequisites for their further development to overcome the economic destruction caused by military operations in the Donetsk & Lugansk regions and the annexation of the Crimea.

PRESENTETION OF BASIC MATERIAL OF THE RESEARCH

The negative effects of internal political disruption and perturbations in the economy of Ukraine during 2014-2016, the annexation of Crimea and military actions in the Donbas has spread to most sectors of the domestic economy. As a consequence, the existing imbalances have deepen, there was a fall in GDP, the range of industrial production, works and foreign trade has reduced, volume of development of capital investments has also decreased.

The reduction in industrial production deepened in 2014 which was caused by stopping the industrial facilities of Lugansk & Donetsk regions and the loss of the Russian trading areas. The fall of industrial production in these two regions was the highest among the regions of Ukraine and negatively affected the performance of industrial production about Ukraine. According to the State Statistics Service in Donetsk region industrial production fell by 58. …

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