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18THE ROLE OF THE ECONOMIC AND SOCIAL STRATEGY IN ENSURING THE ECONOMIC SECURITY Rzayev M.A.-R. (Republic of Azerbaijan) Email: [email protected]
Rzayev Mirza Agha-Rza oglu - PhD in Economics, Associate professor,
DEPARTMENT OF INDUSTRY ECONOMICS AND MANAGEMENT, FACULTY OF ECONOMICS AND MANAGEMENT, AZERBAIJAN STATE UNIVERSITY OF OIL AND INDUSTRY, BAKU, REPUBLIC OF AZERBAIJAN
Abstract: the realization of Azerbaijan's national interests is possible only on the basis of sustainable economic development. Therefore, the national interests of Azerbaijan in this sphere are principal. It is conditioned by the fact that all kinds of security cannot be effectively secured without economic component, which is defined as Stability and dynamics of economic development; The increase in employment and the growth of its revenues; Improving the life quality; Optimization the use of industrial and raw material potential of the country; Effective inclusion of the national economy into the world economy. Keywords: economic security, open economy, economic policy, social policy, macroeconomics, national security.
РОЛЬ ЭКОНОМИЧЕСКОЙ И СОЦИАЛЬНОЙ СТРАТЕГИИ В ОБЕСПЕЧЕНИИ ЭКОНОМИЧЕСКОЙ БЕЗОПАСНОСТИ Рзаев М.А.-Р. (Азербайджанская Республика)
Рзаев Мирза Ага-Рза оглы - кандидат экономических наук, доцент, кафедра экономики промышленности и менеджмента, факультет экономики и менеджмента, Азербайджанский государственный университет нефти и промышленности, г. Баку, Азербайджанская Республика
Аннотация: реализация национальных интересов Азербайджана возможна только на основе устойчивого экономического развития. Поэтому национальные интересы Азербайджана в этой сфере являются главными. Это обусловлено тем, что все виды безопасности не могут быть эффективно обеспечены без экономической составляющей, которая определяется как стабильность и динамика экономического развития; увеличение занятости и рост доходов; повышение качества жизни; оптимизация использования промышленного и сырьевого потенциала страны; эффективное включение национальной экономики в мировую экономику. Ключевые слова: экономическая безопасность, открытая экономика, экономическая политика, социальная политика, макроэкономика, национальная безопасность.
UDC 338.23
Many countries of the world face with problems of ensuring the economic security, stable economic development of the state and society. The current socio-economic situation in Azerbaijan causes extreme urgency of state purposeful activity in the sphere of ensuring the economic security of the country and each citizen individually.
The concept of "economic security" is inseparably linked with the concept of "national security." The term "national security" has become commonplace in the modern world and it is a part of domestic and foreign policies of many countries.
Problems of ensuring the economic security of Azerbaijan as a prerequisite for the stabilization of its current state and development have attracted increasing attention of scientists and the public. Such attention is not accidental. It is essential to reveal the essence
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of the problem, expose real threats, and offer reliable and effective methods of countering them. In most cases the realization of Azerbaijan's national interests is just possible when there are sufficient economic opportunities and sustainable economic development. Thus, we can say that the economic security has the determinative place in the overall system of national security.
The structure of economic security is essentially presented in the proposed deployed wording and consists of three parts, in our opinion.
The first is the sufficiency of financial and economic resources to provide the required level of national security in the country, first of all, its defense at the expense of improvement and development of the armed forces. This component is inherent in all of the most developed world countries and in essence does not cause any doubts. State provides it exclusively at the expense of budgetary funds.
The second is the creation of favorable conditions for sustainable economic development in the country, and for all legal sectors. These conditions must be applied to public and private sectors, including private enterprise, i.e. to all levels of state, society and the individual. At the same time the creation of these conditions will contribute to the growth of the budget filling, i.e. securing the first component.
The third is the protection of economic interests of the state, society and the individual from external and internal threats. This component is necessary for all countries covered by the global economy. In terms of international cooperation any changes, all the more catastrophic, in the global economy, are reflected in all its participants in one way or another. Therefore we need effective adequate measures in case of occurrence of such situations.
All three components are closely interrelated, interchangeable and therefore they are given in the same definition.
One of the leading tendencies in world economic development of post-war decades was the transition of many countries from the closed national economy to the open economy.
An open economy presupposes the integrity of the economy. This is a single economic complex, integrated into the world economy, the world market. An open economy requires the active use of various forms of joint business, the organization of free economic areas, and the effective use of the comparative advantages principle of the country in IDL. An important criterion for the economy openness is a favorable investment climate, stimulating the inflow of capital, technology and information, determined by economic expediency. An open economy implies accessibility of the internal market. It is a country that is involved in IDL, i.e. it participates itself and gives other countries an opportunity to participate in its economy. The benefits of an open economy are in the deepening of specialization and cooperation of production; in the spread of the world experience through a system of international economic relations; in the rational resource allocation depending on the degree of efficiency; in increase of competition between domestic producers, stimulated by competition on the world markets, i.e. competition between import and domestic goods and domestic commodities among themselves.
Introduction of the state's economic security concept means the recognition of the economy primacy to ensure internal and external security of the state, and, therefore, the need for serious attention to the issue of justification and realization of effective national development strategy and an adequate economic policy. This policy should implement the realization of at least two goals:
> Preservation of the economic independence of the country as the ability to make decisions regarding the development of the national economy in its own interests;
> The opportunity to keep the population standard of living and contribute to its further promotion.
The main strategic objectives of Azerbaijan's economic policy should include the stabilization of the economy, unemployment, drop in inflation, structural adjustment, promotion of investment, increasing the share of production in high-tech industries etc. The
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guiding principles of economic policy are the principle of production efficiency: the output of the predetermined amount of products with the least explicit cost. The spectrum of internal and external threats to the country's economic security forming at present range requires adequate and system actions of Azerbaijan for overcoming them. In the first place, it should be developed state strategy of Azerbaijan's economic security consisting of at least two stages, i.e. until 2020 and until 2050, as well as a system of monitoring of economic security threats' basic parameters (thresholds).
The basis of the state strategy of economic and overall national security is its aims and tasks that take into account the strategic priorities and national interests of country in the concrete historical period. The state strategy includes:
Characterization of the internal and external threats to the economic security of Azerbaijan as a set of conditions and factors endangering the vital economic interests of the individual, society and state.
Determination and monitoring criteria and
parameters characterizing
national interests in economics and meeting the requirements of
economic security of Azerbaijan
Building of economic policy, institutional
transformation and
essential mechanisms
eliminating or
extenuating
the impact of factors, that
undermine the national economy stability
The problem of the choice of economic policy is to define a set of economic instruments, which the government should and ready to use, and set of goals for which they are intended.
An effective national strategy on ensuring the country's security can be provided by means of state activities in the following areas.
• Institutional policy.
• Structural and investment policy.
• Income policy.
• Financial policy.
• Monetary policy.
• Regional policy.
• Policy of integration into the world economy.
Formation of proposals on updating methods of implementing economic policy, institutional reforms, and necessary mechanisms to remove or appease interactions disrupting the stability of economic activity, rests upon the ideas of ways, means, methods of ensuring security of managing subjects.
In order to maintain a certain level of national, as well as economic security, depending on the development of the economic and financial situation in the country and in the international economy as a whole, the government pursues committed macroeconomic adjustment by the use of the available instruments of economic policy.
Aims of macroeconomic adjustment
Internal balance External balance
1. Full employment 1. The balance of payments is zero
2. No inflation 2. Stable growth of exchange rates
3. Reasonable rates
4. A fair allotment of income
Committed macroeconomic adjustment should usually aspire to achieve:
> Internal balance - a combination of production and prices levels, which provide full employment (defined as 2-3 percentage fictional unemployment, arising during the change of people jobs) and stable low inflation (2-3% per year);
> The external balance of payments, equal to zero, or such temporary imbalance, which is necessary to achieve certain goals of economic policy, for example, a temporary surplus for renewal the state exchange reserves.
In order to achieve these goals within the framework of the national economy, the government has two groups of economic policy tools. They are tools of demand management and supply management tools.
The effective macroeconomic adjustment solves certain problems by realizing appropriate economic strategy of the state. According to Tinbergen's Rule, it is necessary to use the same or a greater number of macroeconomic policy tools to achieve the certain number of economic objectives of macroeconomic adjustments set out above.
The basis of the organization, planning and functioning of the system ensuring the security of Azerbaijan is to analyze the concept of threat; appraisal of the nature of real and potential internal and external threats, crisis situations, adverse factors in the different spheres of public life, which constitute danger to the country's vital interests and block the attainment of state (national) targets.
Ensuring economic security of Azerbaijan means the simultaneous attainment of internal and external balance. Here internal security means, at a minimum, the balance of the real monetary and budgetary sectors. Since the economic security is an integral part of the state economic policy, then it is necessary the implementation of effective control mechanisms and coordination of effective institutions, norms, covering all areas of domestic and foreign policy for its securing.
Table 2. Instruments of macroeconomic adjustment
Management of demand
Monetary policy • Transactions in the open market; • operations similar with transactions in the open market; • direct control. Budgetary policy • Expenses limitation; • taxes (incomes) increase; • expansion of financing sources; • regulation of extra budgetary funds. External economic policy • Currency; • tariff restrictions on the goods movement; • non-tariff restrictions on the goods movement; • limitations on capital motion.
Management of supply
Widening of investment • Tax remissions • reduction of interest rates; • increase of savings Price control • Restriction of production price • price financing (particularly in agriculture) • legislative limitation of profit margin Abridgment of production costs • Containment of wages; • financing prices on electricity and transport; • Interest rates control.
The legal foundation of Azerbaijan security ensuring consists of constitution, laws and other legal acts of the Azerbaijan Republic, as well as international agreement and obligations of Azerbaijan. The state forms institutional, regulatory legal basis of national security ensuring, including:
> Legislation (development of regulatory legal documents);
> Court (discussion of documents, i.e. the interpretation of documents regarding to a particular case);
> Prosecutor's Office (the system of law executing supervision).
The national security system of the Azerbaijan Republic is created and developed in accordance with the Constitution of the Azerbaijan Republic, decrees and orders of the Azerbaijan Republic President, enactments and orders of the Azerbaijan Republic Government, and programs in this area.
The organs, powers and means of national security, implementing measures of political, legal, organizational, economic, military etc. and aimed at ensuring the security of the individual, society and state form the basis of the national security system of the Azerbaijan Republic. The relevant legislative acts of the Azerbaijan Republic determine the authorities of the organs and powers of the Azerbaijan Republic national security, their structure, the principles and procedure.
The next take part in the formation and realization of the national security policy of the Azerbaijan Republic:
> The President of the Azerbaijan Republic;
> The Parliament of the Azerbaijan Republic;
> The Government of the Azerbaijan Republic;
> The Security Council of the Azerbaijan Republic.
The realization of Azerbaijan's national interests is possible only on the basis of sustainable economic development. Therefore, the national interests of Azerbaijan in this sphere are principal. It is conditioned by the fact that all kinds of security cannot be effectively secured without economic component, which is defined as:
• Stability and dynamics of economic development;
• The increase in employment and the growth of its revenues;
• Improving the life quality;
• Optimization the use of industrial and raw material potential of the country;
• Effective inclusion of the national economy into the world economy.
Economic security can be regarded at least on three different levels of research and understanding:
> Economic security as a phenomenon;
> Economic security as one of the objectives of economic (internal and external) policy of the state;
> Economic security as a mechanism of ensuring that presupposes the existence of the developed "technology".
An effective national strategy on ensuring the country's security can be provided by means of state activities in the following areas.
• Institutional policy.
• Structural and investment policy.
• Income policy.
• Financial policy.
• Monetary policy.
• Regional policy.
• Policy of integration into the world economy.
The strategy of the Azerbaijan Republic in the field of science and innovation, fully and purposefully guides the efforts of the state, private business and institution of civil society on providing the dynamic development of the country in the future. The aim of the strategy is to solve the contradiction of the system, the paces of development and the structure of the Azerbaijani sector of research and working, and it does not meet the national security needs and the growing demand from the business sector for advanced technologies. It is important to follow two basic principles in solving systemic issues:
> The concentration of national budget resources for financing R&D in key directions;
> The use of mechanisms of private and public partnership.
The subject of social policy is the state and its bodies, including local government, as well as large commercial organizations. As a result, the main threats to human development are:
> The social and property stratification of society, increasing inequality in income growth of the poor, low income of the population;
> The deterioration of working conditions, rising unemployment, decrease in the quality of labor and qualification;
> The reduction of life expectancy, increase in disability scale, decline of fertility rates and rise of mortality rates;
> The growth of the shadow economy scale, corruption, bribery, and fraud;
> The lowering of quality and increase in price of services in health protection, education, housing and communal services.
References / Список литературы
1. Vechkanov G.S. Ekonomicheskaya bezopasnost [The economic security]. SPb: Peter, 2007.
2. Ekonomicheskaya i socialnaya bezopasnost [The economic and social security]. "Egzamen", 2005.
3. Odintsov A.A. Ekonomicheskaya i informacionnaya bezopasnost [The economic and informational security]. "Egzamen", 2005.
4. Yarochkin V.I. Secyuritologiya - nauka o bezopasnosti jiznedeyatelnosti [Securitology -the science of safety of vital activity]. M.: "Os-89", 2000.
5. Ekonomicheskaya bezopasnost xozaystvennix sistem [The security of economic systems]. M.: RAGS, 2011.
