DEVELOPMENT OF INTERNATIONAL COOPERATION OF UKRAINIAN COMPANIES DURING WAR - Scientific conference
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Рік заснування видання - 2011

DEVELOPMENT OF INTERNATIONAL COOPERATION OF UKRAINIAN COMPANIES DURING WAR

17.01.2024 22:20

[2. Economic sciences]

Author: Краснянський Даніель, магістрант, Міжнародний університет фінансів


The war made its own adjustments not only to the lives of Ukrainians, but also to the international trade of our country. The war in Ukraine will affect changes in trading partners, export structure and volumes of foreign trade. Today, along with the export of agricultural products, Ukraine is developing the export of IT, which, in our opinion, can provide our country with victory in the war. The IT sector is one of the most developed in the world and brought more than 7 billion to our country’s economy in 2022. Thus, our country needs to export agricultural products, which constitute the largest part of the country’s exports, and rapidly develop the export of IT services and fulfill its contractual obligations. even during the period of hostilities and show their partners not only the strength of our Armed Forces, but also the power of the economy and business.

So, the dynamics of Ukraine’s exports and imports over the past eight years is shown in Figure 1.




Figure 1 – Analysis of the dynamics of exports and imports of goods and services in Ukraine for the period 2016-2022, billion dollars. USA

Source: [1]

This market shows how Russian aggression influenced Ukraine’s international activities. In 2014-2015 Due to the unstable situation in the East of Ukraine, there was a decrease in exports and imports. In 2022, due to the declaration of war and Russia's attack on Ukraine, there was a decrease in exports by 30.06% and imports by 1.79%. It was 2022 that became a turning point both in the history of our country and in the structure of trading partners. Starting in 2022, Ukraine finally took a pro-European direction and focused on strengthening trade relations with EU countries and Western partners.

We propose to analyze the structure of Ukraine’s main trading partners for the period 2021-2022 (Fig. 2).




 Figure 2 – Structure of Ukraine’s exports by region for the period 2021-2022, %

Source: [1, 2]

So, as can be seen from Figure 2, the share of CIS countries (primarily Russia, because it was one of Ukraine’s largest trading partners among the CIS countries) in 2022 decreased by 4.48%, while the share of European countries increased by 18. 75%. You can also see a decrease in the share of Asian countries by 11.63% due to Russia blocking the port in Odessa and restricting the movement of ships. It was 2022 that became the year of a complete change in Ukraine’s trading partners and a final orientation towards EU countries.

The following is proposed to determine the part of the EU countries in the structure of our country’s foreign trade turnover from 2015 (after the start of the ATO) and until 2022 – a full-scale war in Ukraine (Fig. 3).




Figure 3 – Analysis of changes in the dynamics of foreign trade turnover of the CIS countries and the EU in Ukraine – 2015-2022, %

Source: [1]

This graph is clear evidence of how Ukrainian foreign trade has changed: 2015 marked the beginning of dramatic changes in foreign policy and a review of Ukrainian patterns. Our country set its sights on Europe and from a share of 31% in 2015 to 59.6 in 2022. Ukraine’s pro-European sentiments had a particular impact on the country’s trade policy, which is clearly demonstrated in Figure 3.

Next, we will determine the structure of international trade by the share of exports of goods and services for the period 2016-2022 (Fig. 4).




Figure 4 – Dynamics of the share of exports of goods and services of Ukraine for the period 2016-2022, %

Source: [1]




As you can see, the share of exports of goods is much larger than the share of exports of services; on average for the analyzed period, the share of exports was 73.69%, and imports, respectively, 26.31%. However, in terms of growth rate, the shares of imports, despite the war, increased by 25.21%, while the share of exports decreased by 7.35%.

Next, we propose to study the export of IT services during war in 2022 compared to 2021; such a study can help us analyze the impact of war on the development of technology exports from Ukraine (see Figure 5)

We see that, despite the war in Ukraine in 2022, the export of IT services increased by an average of 16.4% over the year, which is a good result and indicates the efficiency of IT companies.

We see that, despite the war in Ukraine in 2022, the export of IT services increased by an average of 16.4% over the year, which is a good result and indicates the efficiency of IT companies.




Figure 5 - Dynamics of exports of IT technologies to Ukraine for the period 2021-2022, billion dollars. USA

Source: [3]

As a result, we propose to study the main international treaties that guide Ukraine when carrying out international trade (Fig. 6).




Figure 6 – list of main agreements in the implementation of international trade by Ukraine

Source: [4, 5, 6]

When carrying out international trade, Ukraine adheres to accepted international treaties and implements them in accordance with adopted legislation and global legal norms. Despite the war in Ukraine, our country fulfilled its treaty obligations to other countries.

As an example of fulfilling trade obligations, we propose to analyze the dynamics of exports of agricultural products as the most exported category of goods in Ukraine (Fig. 7).

As we can see in Figure 7, the dynamics of agricultural exports from Ukraine peaked in 2021, recovering from the Coronavirus Pandemic in 2020. However, a new wave of challenges for domestic agricultural exports was the war in Ukraine, which led to a decrease in export sales due to the inability of companies to export due to the blocking of ports.




Figure 7 – Dynamics of exports of Ukrainian agricultural products by category for the period 2011-2022, million dollars. USA

Source: [1]




On 12 May 2022, the European Commission presented its Roads of Solidarity action plan [7] to help Ukraine export its agricultural products as part of the EU's solidarity response with Ukraine.

Since August 2022, the Black Sea Grain Initiative [8], through the UN, has made it possible to increase the export of grain by sea routes and achieved the opening of a port in Odessa. According to the Ministry of Agriculture of Ukraine, total Ukrainian exports of grains, oilseeds and related products reached 6.6 million tons in September 2022, confirming the growth trend after 4.3 million tons in August, 2.8 million tons in July, 2.5 million tons in June, 2 million tons in May and 1.3 million tons in April.

For Ukraine, the export of agricultural products is an important source of revenue to the state budget and a strategic industry, the share of exports of which in 2022 was 53%. So our states need to stimulate domestic farmers to increase their volumes and support the development of exports of agricultural products.

Despite the war in Ukraine, our country fulfilled international trade obligations to other countries and exported even more agricultural products during the war than during the Coronavirus period. This fact once again demonstrates the fulfillment of our country’s trade obligations to its trading partners.

So, during the period of the war in Ukraine, we can observe the invincibility of Ukrainian exports and domestic companies that are fighting on the economic front to financially support our country. We can argue that our country needs to focus specifically on the development of the IT industry. After all, today the war is more technologically advanced and victory will be for those who have more drones, UAVs, missiles, and Ukraine has enough potential and highly qualified personnel who together create and will create reliable equipment for the Armed Forces of Ukraine, and in the future will export it to all countries peace. Ukrainian IT companies are the future of our country, working to win the war and provide economic support for the country through the export of their services.

References:

1. Statystyka zovnishnoho sektoru Ukrainy (2022) URL:   https://bank.gov.ua/ua/statistic/sector-external  (data zvernennia 09.01.2024)

2. Eksport Ukrainy u 2022 rotsi: holovni tendentsii, sektory ta rehiony (2022) URL:   https://export.gov.ua/news/4570-eksport_ukraini_u_2022_rotsi_golovni_tendentsii_sektori_ta_regioni  (data zvernennia 09.01.2024)

3. Forbs. Faktor uspikhu. Visim lideriv ukrainskoho IT-biznesu pro rezultaty 2022-ho i te, kudy rukhatymetsia rynok, URL https://forbes.ua/innovations/faktor-uspikhu-visim-lideriv-ukrainskogo-it-biznesu-pro-rezultati-2022-go-i-te-kudi-rukhatimetsya-rinok-28022023-11995 (data zvernennia 10.01.2024)

4. Videnska konventsiia pro pravo mizhnarodnykh dohovoriv : Konventsiia OON vid 23.05.1969. URL: https://zakon.rada.gov.ua/laws/show/995_118    (data zvernennia 10.01.2024)

5. Koziubra M. I. Spivvidnoshennia natsionalnykh i mizhnarodnykh pravovykh system. Naukovi zapysky NaUKMA. Yurydychni nauky. 2016. T. 181. S. 5

6. Pro mizhnarodni dohovory Ukrainy : Zakon Ukrainy vid 29.06.2004 № 1906-IV. Vidomosti Verkhovnoi Rady Ukrainy. 2004. № 50. St. 540.

7. Solidarity Lanes Action Plan (2022) URL: https://transport.ec.europa.eu/news/european-commission-establish-solidarity-lanes-help-ukraine-export-agricultural-goods-2022-05-12_en (data zvernennia 12.01.2024)

8. Black Sea Grain Initiative  (2022) URL:   https://www.un.org/en/black-sea-grain-initiative (data zvernennia 12.01.2024)

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Науковий керівник: Коба Наталія Вікторівна, кандидат економічних наук, доцент



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