Economy of Territorial Communities: Trends in the Wartime Conditions and Post-War Recovery Strategizing

Abstract

The development of the economy of territorial communities largely depends on the presence of business entities within their boundaries and the ability of local self-government bodies to create an environment conducive to the development and functioning of business in the community. The ongoing war has exacerbated the challenges associated with the functioning of business entities, and therefore the development of the economy of territorial communities. Local self-government bodies have a considerable set of tools for local economic development to respond to these challenges. However, the following questions remain open: how and what tools of local economic development do local governments use to stimulate the development of the local economy? The purpose of the study is to identify obstacles to the functioning of business after the onset of russia’s full-scale armed aggression against Ukraine and analyze local economic development tools which local self-government bodies can use in strategic planning of post-war recovery and development of the economy of territorial communities. In the course of the study it is revealed that in the first months of russia’s full-scale armed aggression against Ukraine, there was a drop in entrepreneurial activity. However, the relative stabilization of the front line, the victories of the Armed Forces of Ukraine, and tax regulation measures aimed at mitigating the tax pressure on business during the war ensured a gradual resumption of entrepreneurial activity. At the same time, there was a territorial redistribution of business entities in favor of safer western regions of the country. The challenges of development of the local economy in territorial communities, associated with the conduct of entrepreneurial activity by economic entities (lack of qualified labor potential, low entrepreneurial activity among local residents, loss of logistics chains, declarative nature of business support by local governments) are disclosed and characterized. A classification of local economic development tools that can be used by local self-government bodies to increase the competitiveness of the economy of territorial communities is provided. The tools of local economic development, the use of which is declared by local self-government bodies in strategic documents for the development of territorial communities, are analyzed and critically evaluated.

Keywords

• territorial community
• local self-government bodies
• tools of local economic development
• business
• war