Forecasting methods for financial support of military capability during the democratisation

Abstract

Background . The progressive exhaustion of Ukraine's economy due to the war, which, among other things, led to industrial, demographic, and environmental crises, forced the Government to look for reliable external sources of financial borrowing and material and humanitarian support as well as implementing efficient mechanisms of internal financial sources. During the first year of the Russian-Ukrainian war, international financial support, together with the monetary policy of the National Bank of Ukraine in terms of the emission of funds, was crucial to stabilising the stagnating economy. However, in the following years, the Government pursued an exceptional external and internal borrowing policy, which led us to identify the main bases for verification of the impact of financial support on the development and maintenance of an adequate level of Ukraine's military capability in the context of democratisation, – an essential requirement for Euro-Atlantic integration. The purpose of the article is to make predictions and provide practical recommendations for continuing the relatively successful policy of the Government of Ukraine and the National Bank of Ukraine to attract external and internal borrowing to fill the state budget, allocate funds for the needs of the Ministry of Defence of Ukraine and use financial resources efficiently to ensure national and economic security. The object of the study is the financial support of military capability, i. e. trust funds and Western aid. Methods . To achieve the research objective, we used the method of analysis and hypothesis formulation based on observations of the phenomena that most accurately describe military and economic indicators. The hypothesis was confirmed and established on regression analysis, trends, and forecasts. Results . The indicator of financial support to the state budget from democratic governments is highlighted as well as national trust funds. The variance indicators of democratisation, economic growth and military expenditures are determined. The data of the above indicators are analysed using the double-squared method, and their forecasting was made. Conclusions . It has been found that financial support, due to the appropriate democratisation of public administration processes, is the primary basis for developing Ukraine's military capability.