Issued since 1995
Welcome to the Finance of Ukraine site (demo).
Login | Register
ACADEMY
OF FINANCIAL
MANAGEMENT
.


№ 7/2022

№ 7/2022

Fìnansi Ukr. 2022 (7): 7–31
https://doi.org/10.33763/finukr2022.07.007

ECONOMIC SECURITY: THEORY, PRACTICE, MANAGEMENT

OPARIN Valerij 1, VOLKOVSKYI Ievgen 2, VOLKOVSKA Natalia 3

1SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0002-5181-4333
2Kyiv National Economic University named after Vadym Hetman
OrcID ID : https://orcid.org/0000-0001-5904-919X
3Ministry of Finance of Ukraine
OrcID ID : https://orcid.org/0000-0001-5247-5735


Security factor in the context of financial support for sustainable development


Introduction. The issue of timely response of the global financial community to escalating military threats in certain regions of the world through targeted investments or financial assistance depends largely on the actualization of the issue of security as a leading factor of sustainable development in the global economy. The solution to this problem is possible with the introduction of innovative financial instruments, which could provide timely financing of security infrastructure.
Problem Statement. The onset of military conflict brings with it enormous losses of socio-economic development. To a large extent, the risk of military conflict and its consequences can be reduced by financing the necessary measures to improve the defense capabilities of the country. According to the worldwide trend of implementing the concept of sustainable development, such funding is possible within one of the seventeen sustainable development goals.
Purpose. To determine the main sources of financial aid except for the governments‘ aid of the world countries, to search for the possibilities of applying innovative mechanisms of financial support for sustainable development in the event of an aggravation of the security situation.
Methods. General scientific and special methods were used: analysis, synthesis, grouping, description, comparison, theoretical generalization and classification.
Results. It has been found that the security factor as a separate goal of sustainable development was established seven years ago, accordingly, the financing of security risks and military conflicts is carried out according to the principle of elimination of consequences. Therefore, there is a problem that requires the development of new tools for guaranteeing peace, which should be bonds, which are a financial tool for sustainable development in the event of increased risks of military aggression. The mechanisms of issuance must take into account different levels of risk. Which, in turn, should determine the requirements for the possibility of issuing such bonds and the results to be achieved.
Conclusions. Under the present conditions, Ukraine has a unique opportunity to act as a catalyst for the recognition of the security factor as one of the defining components of the sustainable development concept, without which the achievement of sustainable development goals in the environmental, social and governance components is impossible. This increased focus on the security factor will require the search for and application of innovative financial instruments, one of which should be peace bonds.

Keywords:military conflict, sustainable development goals, humanitarian impact bonds, international financial institutions, military bonds, peace bonds, forecast-based financing

JEL: E44, E51, E63


Oparin V. . Security factor in the context of financial support for sustainable development / V. . Oparin, I. Volkovskyi , N. Volkovska // Фінанси України. - 2022. - № 7. - C. 7-31.

Article original in Ukrainian (pp. 7 - 31) DownloadDownloads :120
1. Becker, T., Eichengreen B., Gorodnichenko, Yu., Guriev, S., Johnson, S., Mylovanov, T. et al. (2022). A Blueprint for the Reconstruction of Ukraine. London: CEPR Press. Retrieved from cepr.org/system/files/2022-06/BlueprintReconstructionUkraine.pdf.
2. Masterson, V. (2022, April 26). These 3 charts show the impact of war in Ukraine on global trade. World Economic Forum. Retrieved from www.weforum.org/agenda/2022/04/ukraine-war-global-trade-risk/.
3. Ruta, M. (2022, May 3). How the war in Ukraine is reshaping world trade and investment. Retrieved from blogs.worldbank.org/developmenttalk/how-war-ukraine-reshaping-world-trade-and-investment.
4. Marshuk, L., Movchan, D., & Pokoiovyi, A. (2022). Peculiarities of the financial system during the war. Economy and Society, 37 [in Ukrainian]. doi.org/10.32782/2524-0072/2022-37-61
5. Rybak, O. M., & Paratsii, H. V. (2014). Optimizing the structure of financing state borrowings at the expense of domestic state loan bonds. Innovative economy, 3, 208–212 [in Ukrainian].
6. Storonianska, I. Z., & Pelekhatyi, A. O. (2015). Sources of formation of the financial resources of the state in the conditions of military aggression in the east of Ukraine. Global world, 1 (1), 82–87 [in Ukrainian].
7. Osetskyi, V. (2015). The genesis of the functions of government debt securities. Bulletin of Taras Shevchenko National University of Kyiv. Economics, 6 (171), 54–60 [in Ukrainian]. doi.org/10.17721/1728-2667.2015/171-6/10
8. Shyshkov, S. Ye. (2022). Imposition of martial law and its consequences for Ukrainian capital markets. Ukrainian Society, 1 (80), 63–86 [in Ukrainian]. doi.org/10.15407/socium2022.01.063
9. Svynchuk, A. A. (2015). Social bonds as a financial tool for the development of social enterprises in Ukraine. Science and Economy, 2, 7–12 [in Ukrainian].
10. Borowy, I., & Schmelzer, M. (Eds.). (2017). History of the future of economic growth: historical roots of current debates on sustainable degrowth. Routledge. doi.org/10.4324/9781315543000
11. Kim, T.-Y, & Heshmati, A. (2014). Economic growth: The new perspectives for theory and policy. Springer. doi.org/10.1007/978-3-642-40826-7
12. Hardin, G. (1068). The tragedy of the commons. Science, 162 (3859), 1243–1248. doi.org/10.1126/science.162.3859.1243
13. Meadows, D. H., Meadows, D. L., Randers, J., & Behrens, W. (1972). The Limits to growth; a report for the Club of Rome’s project on the predicament of mankind. New York: Universe Books. Retrieved from www.donellameadows.org/wp-content/userfiles/Limits-to-Growth-digital-scan-version.pdf.
14. United Nations. (1972). Report of the United Nations Conference on the Human Environment, Stockholm, 5–16 June 1972. Retrieved from digitallibrary.un.org/record/523249.
15. Brundtland, G. (1987). Our Common Future (Report of the World Commission on Environment and Development, United Nations General Assembly document A/42/427). Retrieved from www.are.admin.ch/dam/are/en/dokumente/nachhaltige_entwicklung/dokumente/bericht/our_common_futurebrundtlandreport1987.pdf.download.pdf/our_common_futurebrundtlandreport1987.pdf.
16. Elkington, J. (1994). Towards the Sustainable Corporation: Win-Win-Win Business Strategies for Sustainable Development. California Management Review, 36 (2), 90–100. doi.org/10.2307/41165746
17. United Nations. (2021). Principles for responsible investments. Retrieved from www.unpri.org/download?ac=10948.
18. United Nations. (1992). United Nations Conference on Environment and Development, Rio de Janeiro, Brazil, 3–14 June 1992. Retrieved from www.un.org/en/conferences/environment/rio1992.
19. United Nations. (1992). Agenda 21. United Nations Conference on Environment and Development, Rio de Janeiro, Brazil, 3 to 14 June 1992. Retrieved from sustainabledevelopment.un.org/content/documents/Agenda21.pdf.
20. United Nations. (2000). Millennium Summit, 6-8 September 2000. Retrieved from www.un.org/en/conferences/environment/newyork2000.
21. World Bank. (n. d.). Millennium Development Goals. Retrieved from www5.worldbank.org/mdgs/.
22. United Nations. (2000). Report of the World Summit on Sustainable Development, Johannesburg, South Africa, 26 August - 4 September 2002. Retrieved from digitallibrary.un.org/record/478154.
23. United Nations. (2005, March 21). In larger freedom: towards development, security and human rights for all (Report of the Secretary-General (A/59/2005)). Retrieved from documents-dds-ny.un.org/doc/UNDOC/GEN/N05/270/78/PDF/N0527078.pdf?OpenElement.
24. United Nations. (2005). Resolution adopted by the General Assembly on 16 September 2005 (A/RES/60/1). Retrieved from www.un.org/en/development/desa/population/migration/generalassembly/docs/globalcompact/A_RES_60_1.pdf.
25. United Nations. (2012, September 11). The future we want on (Resolution Adopted by the General Assembly on .on 27 July 2012 (A/RES/66/288)). Retrieved from documents-dds-ny.un.org/doc/UNDOC/GEN/N11/476/10/PDF/N1147610.pdf?OpenElement.
26. Wikipedia. (n. d.). List of wars: 1945–1989. Retrieved from en.wikipedia.org/wiki/List_of_wars:_1945%E2%80%931989.
27. Roser, M., Hasell, J., Herre, B., & Macdonald, B. (n. d.). War and Peace after 1945. OurWorldInData.org. Retrieved from ourworldindata.org/war-and-peace.
28. World Bank. (n. d.). Military expenditure (% of GDP). Retrieved from data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS?end=2020&start=1960&view=chart.
29. OECD. (n. d.). The SDG Financing Lab. Retrieved from sdg-financing-lab.oecd.org/.
30. World Bank. (2022). Classification of Fragile and Conflict-Affected Situations. Retrieved from www.worldbank.org/en/topic/fragilityconflictviolence/brief/harmonized-list-of-fragile-situations.
31. World Bank. (n. d.). Classification of Fragility and Conflict Situations for World Bank Group Engagement. Retrieved from thedocs.worldbank.org/en/doc/8bc2ffd2ca0d2f174fee8315ad4c385b-0090082021/original/Classification-of-Fragility-and-Conflict-Situations-web-FY22.pdf.
32. FY22 List of Fragile and Conflict-affected Situations. (n. d.). Retrieved from thedocs.worldbank.org/en/doc/bb52765f38156924d682486726f422d4-0090082021/original/FCSList-FY22.pdf.
33. World Bank. (n. d.). State and Peacebuilding Fund. Retrieved from www.worldbank.org/en/programs/state-and-peace-building-fund/overview.
34. World Bank. (n. d.). State and Peacebuilding Fund (2019 Annual Report). Retrieved from thedocs.worldbank.org/en/doc/814741589500593627-0090022020/original/WBGSPFAnnualReport2019.pdf#page=48.
35. World Bank. (2022, March 7). World Bank Mobilizes an Emergency Financing Package of over $700 million for Ukraine. Retrieved from www.worldbank.org/en/news/press-release/2022/03/07/world-bank-mobilizes-an-emergency-financing-package-of-over-700-million-for-ukraine.
36. International Monetary Fund. (2022, March 17). Joint Statement of Heads of International Financial Institutions with Programs in Ukraine and Neighboring Countries. Retrieved from www.imf.org/en/News/Articles/2022/03/17/pr2280-joint-statement-heads-ifis-programs-ukraine-neighboring-countries.
37. Ministry of Finance of Ukraine. (2022). Announcements and results of auctions. Retrieved from mof.gov.ua/uk/ogoloshennja-ta-rezultati-aukcioniv [in Ukrainian].
38. National Bank of Ukraine. (2022, June 9). The National Bank of Ukraine purchased military government bonds for UAH 70 billion and emphasizes the need to intensify market debt borrowing. Retrieved from bank.gov.ua/ua/news/all/nbu-zdiysniv-vikup-viyskovih-ovdp-na-70-mlrd-grn-ta-nagoloshuye-na-neobhidnosti-aktivizatsiyi-rinkovih-borgovih-zaluchen [in Ukrainian].
39. Cabinet of Ministers of Ukraine. (2022, June 1). In May 2022, the general fund of the state budget received 101.3 billion UAH. Retrieved from www.kmu.gov.ua/news/u-travni-2022-r-do-zagalnogo-fondu-derzhavnogo-byudzhetu-nadijshlo-1013-mlrd-grn [in Ukrainian].
40. Cabinet of Ministers of Ukraine. (2022, May 2). Ministry of Finance: In April 2022, the general fund of the state budget received 76.2 billion UAH. Retrieved from www.kmu.gov.ua/news/minfin-u-kvitni-2022-roku-do-zagalnogo-fondu-derzhavnogo-byudzhetu-nadijshlo-762-mlrd-grn [in Ukrainian].
41. Cabinet of Ministers of Ukraine. (2022, April 1). Ministry of Finance: In the conditions of martial law, the monthly schedule of the state budget of Ukraine has been completed by 92.9%. Retrieved from www.kmu.gov.ua/news/minfin-v-umovah-voyennogo-stanu-misyachnij-rozpis-derzhavnogo-byudzhetu-ukrayini-vikonano-na-929 [in Ukrainian].
42. European Commission. (n. d.). European Peace Facility. Retrieved from fpi.ec.europa.eu/what-we-do/european-peace-facility_en.
43. European Peace Facility: Strategic Compass. (2022, June). Retrieved from www.eeas.europa.eu/sites/default/files/documents/EU-peace-facility_June2022.pdf.
44. Council Decision (CFSP) 2022/338 on an assistance measure under the European Peace Facility for the supply to the Ukrainian Armed Forces of military equipment, and platforms, designed to deliver lethal force. (2022, February 28). Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32022D0338.
45. Council Decision (CFSP) 2022/471 amending Decision (CFSP) 2022/338 on an assistance measure under the European Peace Facility for the supply to the Ukrainian Armed Forces of military equipment, and platforms, designed to deliver lethal force. (2022, March 23). Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32022D0471.
46. Council Decision (CFSP) 2022/636 amending Decision (CFSP) 2022/338 on an assistance measure under the European Peace Facility for the supply to the Ukrainian Armed Forces of military equipment, and platforms, designed to deliver lethal force. (2022, April 13). Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32022D0636.
47. Council Decision (CFSP) 2022/809 amending Decision (CFSP) 2022/338 on an assistance measure under the European Peace Facility for the supply to the Ukrainian Armed Forces of military equipment, and platforms, designed to deliver lethal forces. (2022, May 23). Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2022.145.01.0040.01.ENG&toc=OJ%3AL%3A2022%3A145%3ATOC.
48. Council Decision (CFSP) 2022/339 on an assistance measure under the European Peace Facility to support the Ukrainian Armed Forces (2022, February 28). . Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32022D0339.
49. Council Decision (CFSP) 2022/472 amending Decision (CFSP) 2022/339 on an assistance measure under the European Peace Facility to support the Ukrainian Armed Forces. (2022, March 23). Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32022D0472.
50. Council Decision (CFSP) 2022/637 amending Decision (CFSP) 2022/339 on an assistance measure under the European Peace Facility to support the Ukrainian Armed Forces. (2022, April 13). Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32022D0637.
51. Council Decision (CFSP) 2022/810 amending Decision (CFSP) 2022/339 on an assistance measure under the European Peace Facility to support the Ukrainian Armed Forces. (2022, May 23). Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2022.145.01.0042.01.ENG&toc=OJ%3AL%3A2022%3A145%3ATOC.
52. Impact Investing Institute. (2021, April). CRC Humanitarian Impact Bond (Case Study). Retrieved from www.impactinvest.org.uk/case-studies/icrc-humanitarian-impact-bond/#:~:text=The%20Humanitarian%20Impact%20Bond%20(HIB,populations%20living%20in%20conflict%20zones.
53. Impact Investing Institute. (2021). ICRC Humanitarian Impact Bond ICRC, supported by Kois. Retrieved from www.impactinvest.org.uk/wp-content/uploads/2021/04/ICRC-Humanitarian-Impact-Bond%E2%80%8B.pdf.
54. OECD. (2019). Social Impact Investment 2019: The Impact Imperative for Sustainable Development. Paris: OECD Publishing. doi.org/10.1787/9789264311299-en
55. Rundell, S. (2019, November 27). SDG 16: How to invest in peace. Retrieved from www.top1000funds.com/2019/11/sdg-16-how-to-invest-in-peace/.
56. Phenix Capital. (2020, September 16). Thematic deep-dive: SDG 16 as a pathway to justice and equality (Workshop). Retrieved from www.phenixcapitalgroup.com/day-2-defining-impact-investing-themes-and-frameworks/2020/9/28/thematic-deep-dive.
57. Interpeace. (n. d.). Finance for Peace Initiative. Retrieved from www.interpeace.org/finance-for-peace/.
58. Reichelt, H., & Keenan, C. (n. d.). The Green Bond Market: 10 years later and looking ahead. Retrieved from thedocs.worldbank.org/en/doc/554231525378003380-0340022018/original/publicationpensionfundservicegreenbonds201712.pdf.
59. Robeco. (2022, July). Exclusion Policy Robeco. Robeco institutional asset management. Retrieved from www.robeco.com/docm/docu-exclusion-policy.pdf.
60. International Federation of Red Cross and Red Crescent Societies. (n. d.). Forecast-based Financing: A new era for the humanitarian system. Retrieved from www.forecast-based-financing.org/wp-content/uploads/2019/03/DRK_Broschuere_2019_new_era.pdf.
61. The Institute for Economics and Peace. (n. d.). Retrieved from www.economicsandpeace.org/.