Market conditions and the role of the state in post-war economic recovery of Ukraine

Abstract

Introduction. The loss of consumers of Ukrainian products from the former Soviet Union harmed the economy, especially industry. Along with a significant decline in demand for its products, payments to the budget and receipt of foreign currency decreased. Privatization, especially in industry, and the development of the basics of market relations did not provide the necessary impetus for the economy. Insufficient state participation in the innovative renewal of fixed assets and in supporting demand for Ukrainian products also hindered growth. Problem Statement. The combination of market relations with state regulation of the economy, particularly for the development of Ukraine's industrial sector. Methods. The study employs methods of critical analysis, summarizing the advantages and disadvantages of market mechanisms in Ukraine, systematization, and integration. The purpose is to carry out a systematic analysis of the results of the activities of enterprises over a 30-year period of their development in the conditions of market economy in Ukraine, the assessment of the support of state management bodies in the process of ensuring the efficiency of domestic economic entities in general, the comparison of the Ukrainian approach to the independence of enterprises in market conditions with the provisions of J. M. Keynes’ theory regarding the role of the state in the formation of demand for their products. Methods. The study employs methods of critical analysis, summarizing the advantages and disadvantages of market mechanisms in Ukraine, systematization, and integration. Results. State assistance in the renewal of fixed assets and the transition to innovative production from 1991 to 2021 was insufficient. Following the industrial decline of 1991, recovery in Ukraine was slow as enterprises paid insufficient attention to the aging of their assets and their financial condition. Many industrial enterprises failed to take advantage of opportunities to modernize production and maintain profitability. This resulted in their losses, reduced budget payments, and the loss of global market segments The results of the analysis showed that the construction of the market economy in Ukraine did not follow Keynesian principles, which led to the aforementioned problems. Conclusions. It was the balanced involvement of the state in post-war economic restructuring that brought success to Germany, South Korea, and Vietnam. After the war, certain key enterprises in Ukraine may face a shortage of resources due to incurred losses. This problem can only be resolved with state involvement. The authors identified strategic industrial sectors whose development will accelerate structural and innovative transformations in the national economy, including metallurgy, mechanical engineering, and construction.