Imbalances and risks of the regional development of Ukraine’s economy under conditions of instability

Abstract

Purpose. The research aims to detect main trends of regional development of Ukraine’s economy, and substantiate imbalances and risks, which must be taken into account in the formation of a new model of regional development of Ukraine and improving financial-economic resilience under conditions of modern turbulence. Methodology / approach. The general theoretical scientific methods, fundamental principles of regional economy, which are highlighted in the works of both Ukrainian and foreign scientists on spatial development. The following research methods were used to perform to fulfill the tasks: abstract-logical, comparative and correlation analysis, graphic visualization, statistical. Results. The research puts forward a rage of hypotheses: the regions with higher economic activity concentration develop faster; the regions oriented on technology-intensive economic activity types and with high innovation activity level have higher chances for economic growth; economic growth can result in growing interregional inequalities and imbalances in a long run; economically powerful regions are more resilient to financial and economic crises. Their verification shows that the economic development of Ukrainian regions is determined by factors other than initial economic capacity. Ukrainian regions are hardly developing according to the recognized global development principles. Their economic success is ensured by orientation on the agricultural output (usually low-margin) rather than technology-intensive economic activities and dynamic innovative activity. Interregional comparisons of business environment condition and economic growth of Ukrainian regions prove that the regions-leaders by economic growth paces are characterized by the relatively higher quality of entrepreneurial climate. Moreover, recently, they have been improving their positions in regional doing business rankings. Meanwhile, the largest group of Ukrainian regions, which still have positive rates of economic development, is the outsider in terms of both the business climate quality and loss of ranking positions. The most difficult situation with entrepreneurship environment is in Zaporizhzhia, Poltava, and Kherson oblasts. Therefore, the regions that used to be oriented on large enterprises of the industrial sector have not managed to reorient themselves on the support of entrepreneurship and stimulation of entrepreneurial activity. However, a positive sign is a significant improvement of Zaporizhzhia and Dnipropetrovsk oblasts positions in the rankings. Originality / scientific novelty. Based on the studying of regional development trends under crisis conditions of financial-economic turbulence, the research outlines current risks of regional economic growth, including the risk of further loss of economic capacity of Ukraine and its regions to achieve resilient growth, the risk of delayed effect of economic growth slowdown in a short-term period, the risk of growing economic development imbalances of Ukrainian regions. Practical value / implications. The value of the study lies in the use of identified trends and risks in building a new methodology of state regional policy and updating tools to stimulate economic development of Ukraine, which will increase the stability of the economy under conditions of financial and economic turbulence.

Keywords

• regional development
• economic growth
• risks
• trends
• new regional development model.