Losses of endogenous potential of the regions of Ukraine during war

Abstract

The problems of the economic development of the regions of Ukraine caused by the war are considered. The destructive impact of the war on the economic development of the regions manifested in disintegration, loss of production connections, and violation of spatial disparities between regions, is shown. The article determines that the greatest economic losses are experienced by industrial regions where active hostilities are taking place. The industries suffering the highest losses include mining, oil-refining, by-product coke industry, metallurgy, food, etc. The article reveals that the distribution of economic losses caused by the war depends on the economic structure of the region. The volumes of production and export of products are subject to the destructive influence of the war, regardless of whether the hostilities are directly at the territory of the region. Interestingly, the strengthening of the endogenous potential of Ukrainian regions will depend on the opportunities for the development of industry and agriculture with a higher added value. The hostilities and the disruption of logistical ties have become a new challenge to endogenous development for regions specializing in agricultural production. The article reveals that agricultural regions should respond to new challenges by diversifying production lines and developing the agro-processing sector. Ukraine's entry into the single energy market with EU countries will contribute to the growth of endogenous potential. The advantages of joining the European energy grid are outlined, including higher stability of the energy system, increase in network capacity, creation of a common energy market, development of green energy, etc. Ukraine has received the opportunity to actively export electricity to the EU countries, which will allow the power industry to have taken second place in the country's balance of payments after the export of agricultural products by the end of the first half of 2022. It is emphasized that the obtained opportunities in energy are actively destabilized by the aggressor state in order to reduce the endogenous potential of the regions and export opportunities. The export of electricity was stopped as 40% of the country's energy infrastructure was destroyed as a result of missile attacks on the energy system of Ukraine. The article determines that the threat of active hostilities on the territory of the Zaporizka NPP has a scale not only of local but also of global significance. In the energy industry, the renewable energy sector has suffered large-scale destruction: 70% of wind power plants were destroyed, 50% of industrial solar power plants were damaged, 15% of bioenergy capacities were destroyed, etc. The significant losses in the renewable energy sector are caused by the location of the main facilities in the regions of active hostilities. The situation with the maintenance of the stable functioning of power grids in the regions of Ukraine remains difficult, affecting their economic development. The post-war restoration of the energy infrastructure on the basis of the green economy will become the basis for the energy security of the state and the endogenous development of the regions.