Conceptual Fundamentals of Providing Long-Term Economic Growth as a Factor of Economic Security of Ukraine

Abstract

AbstractThe article provides an overview of factors ensuring long-term economic growth in Ukraine basing on the interpretation of its compliance with economic security. Upon the different theories of economic growth, an understanding of causes why Ukraine has not achieved high long-term economic growth, widening social and economic gaps with other countries and, consequently, not providing an acceptable level of economic security since the 1991. The authors conclude that Ukraine hasn’t seized a window of opportunity provided by market transformation of the economy to increase productivity, which significantly reduced national economic security. Prolonged restrictive monetary and non-stimulating economic policy has led to restraint of money supply, scarce funding and non-strategic structural change, and has prevented effective capacity development and timely expansion of the internal market. It keeps small size of the national economy and led to the outflow of labour and capital resources from the country. The small size of the national economy and absence of significant results in the scalability of the economy are two sides of Ukraine's central economic problem, which leads to a critical compression of development resources and economic reproduction in the long run. Thus, economic policy of Ukraine should be modernized in terms for economic growth and economic security, focusing on measures to radically expand demand (expanding investments, rising household’s income, increasing lending to the economy) while removing barriers to development from the supply side (in such spheres as entrepreneurship, industry, services and agriculture). The authors prove the prospects of optimizing budget expenditures to increase productivity in Ukraine basing on factors and criteria for ensuring national economic security. Output, create employment opportunities and improve global competitiveness.KeywordsEconomic security of the stateLabour productivityEconomic growthGovernment expendituresBanking lendingInvestments