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5UKRAINIAN HOUSEHOLDS IN THE CRISIS: ADAPTATION MECHANISMS AND EXPECTED
CHANGES
Zaiats T.,
Dr. Sc. (Economics), Prof., Head of Department Ptoukha Institute for Demography and Social Studies of the National Academy of Sciences of Ukraine
Zaiats V.
PhD in Economics, Senior Researcher Ptoukha Institute for Demography and Social Studies of the National Academy of Sciences of Ukraine
Abstract
Modern adaptations mechanisms of households in the crisis conditions for adjustment to a new social and economic situation are considered. Forecasts of its impact on the poverty of Ukrainian households and changes in behavior in the consumer and labor markets have been made. The priority of protective mechanisms formed by households themselves, taking into account their composition and property wealth are determined.
Keywords: adaptation, households, economic changes, mechanisms, global crisis.
Problem formulation. The global crisis of 2020 was deeper than all previous ones due to the collapse of financial markets and the real economy, primarily consumption, exports and capital expenditures. Due to the deteriorating epidemiological situation with the rapid and unprecedented spread of coronavirus infection, it has led to a decline in production, the cessation of various economic activities and, consequently, the fall in GDP of many countries. Under such conditions, the scientific issues related to the development of protective adaptation mechanisms for the survival of households of different composition, level of material wealth and real opportunities to overcome the crisis. In this aspect, both the system of their state support and the mechanisms identified by households as the most appropriate in such conditions are important.
Presentation of the main material. Countries around the world with service economies, favorable business conditions, developed health care systems and strong government support for the economy and population are better able to adapt to the new situation, adapt mechanisms faster and will not experience such a deep socio-economic decline as poor countries. Among such mechanisms in the context of the crisis, priority is given to those that allow minimizing the negative consequences for business and households, including zero interest rates, credit easing, direct cash payments to households and others.
Households may respond differently to economic crises by changing behavior in the consumer or labor market, on the one hand, and by changing the structure of the household, in particular its aggregation, on the other. Once in a crisis zone, households are looking for an acceptable survival strategy that can counteract declining well-being and increasing poverty. Adaptation to the new situation can take place in different ways -through the sale of assets and the use of savings, the use of insurance instruments, migration, redistribution of assets between households, the involvement of certain elements of subsistence farming. The choice of one or another combination of these tools depends on the composition of the household, its financial status and vision of appropriate ways to overcome the crisis.
In any case, Ukraine as a poor country will suffer significant economic and social losses, which will affect the growing poverty of the vast majority of households, especially those who find themselves outside the state programs to support certain sectors of the economy or certain categories of the population. Following the results of 2020, we can expect significant negative changes in monetary poverty. This year's events are unfolding in such a way that the gains of previous years on poverty reduction may be completely lost. According to experts, if the quarantine measures are fully or partially completed in June, then in 2020 the poverty rate (at a cost below the actual subsistence level) will increase to 45%, which is 17% higher than in 2019. There will be an increase in poverty for all types of families, and households with children will suffer the most. The poverty rate among families with children is expected to increase to 53.1 %, while the poverty rate of childless households in 2020 will remain almost unchanged - 35.4 %.
The expected growth of social deprivation is due to the fact that low social standards and norms will be joined by: bankruptcies of small business structures, of which about a third will not be able to resume operations within a year; partial suspension for the period of quarantine of transport and services (their share in the structure of GDP is almost a third); underemployment in the manufacturing sector and declining demand for its products; return of migrants from abroad (up to 2 million people), the share of which will replenish the labor market in crisis; reduction of investments in construction, logistics and modernization of road transport infrastructure due to redistribution of funds in favor of anti-epidemiological measures.
Under crisis conditions, differences between the adaptation potential of different categories of the population are revealed, the most vulnerable are the poorest strata, which due to a certain "financial status" primarily experience changes in consumer prices, tariffs for housing, medical and educational services. The aggravation of the crisis leads to a further reduction in the financial capacity of some households and an increase in debts for housing and communal services, rents for apartments and houses, mortgage payments, consumer
loans, etc. Rising food prices, combined with declining household incomes due to the crisis, will worsen the structure and quality of current consumption of most poor households. At the same time, the behavior of households in the real estate market will change - according to experts, the expected decline in consumer activity in households will be 60-70%. And although the provision of households with housing will not change significantly in the near future, but changes in the real estate market will be noticeable. In particular, for economic reasons, developers are now abandoning plans to develop local infrastructure in new residential complexes.
Significant deterioration in the financial capacity of households will be felt by those who will include the unemployed - according to the State Employment Service of Ukraine as of April 16, 2020, the number of unemployed increased by 27% compared to the same period last year. The total number of those who lost their jobs in the official sector of the economy and for various reasons did not register with the public employment service is about 3 million people [1]. In general, the situation on the country's labor market will remain difficult and tense until the end of 2020. Unemployment will be long and stagnant due to a significant economic downturn, declining production and significant structural changes. Migrants will slowly return to work outside of Ukraine both due to the continuing risk of infection and due to economic problems in the world, as a result of which the unemployment rate will be significant, its reduction will be delayed and will require significant efforts by each member of society [2]. Even before the end of the quarantine restrictions, some European countries, first of all Poland, stated that they could not do without cheap Ukrainian labor, and therefore would organize charter flights to deliver workers previously employed in agriculture and construction.
The expected exchange rate instability of the national currency and a significant level of inflation will require an increase in the capacity of Ukrainian households to adapt to the crisis. International rating agency Fitch Ratings predicts that the hryvnia to the dollar in 2020 will fall by 25% against strengthening by 14% in 2019 [3]; the inflation rate is projected by the Cabinet of Ministers of Ukraine at 11.6% against the actual 4.1% in 2019 [4]. The National Bank of Ukraine gives a more optimistic forecast of inflation in 2020, which will be within the target range of 5% ± 1 percentage point. Low inflation expectations are associated with cheaper energy, reduced effective demand for goods and services, abandonment of tourism, travel to relatives, etc. At the same time, there will be a normalization of demand due to the reduction of excitement or excess. Due to the uncertainty in the real estate market, the level of demand does not change significantly. According to this forecast, due to quarantine restrictions to overcome the pandemic and the global crisis, the Ukrainian economy will shrink by 5.0% in 2020, but will resume growth at about 4% in the coming years. The gradual lifting of quarantine restrictions, soft fiscal and monetary policies will lead to the recovery of the Ukrainian economy. This will also be facilitated by the
government's increase in budget expenditures to overcome the crisis and measures taken by the National Bank of Ukraine to support the banking system [5].
However, the financial situation of most households in the country will deteriorate rapidly due to the slow recovery from the crisis and limited state support, lack of objective information about the real financial situation of socially vulnerable groups. During the period of declining incomes and rising inflation, household savings are slowing down or even starting to decline due to "eating". According to a survey by the «Rating» agency, the population will have enough of their savings only for a month (63% - less than a month; 6% - six months, 3% - a year) [6]. Due to the forced expenditure of savings, it is possible to change the consumer priorities of the population in favor of cheap goods and services, there is a high probability of spreading financially saving behavior in the near future.
This will be counteracted by support programs proposed by the Government of Ukraine, primarily the provision of subsidies and assistance to low-income households, as well as the increase or indexation of pensions for 11.3 million people. However, the amount of this assistance remains meager, it is not able to improve their well-being. Due to low purchasing power, most Ukrainian households will maintain delayed demand for certain groups of food and non-food products for a long time. It is clear that they will minimize the cost of goods and services due to expectations of deteriorating socio-economic situation in the country due to quarantine restrictions.
Conclusions. Households of any country have a significant arsenal of adaptation to global crises, which combine measures of state support of the population in difficult socio-economic conditions and their own protection mechanisms of the members of these domestic economies. Their choice and priority depends on the gender and age composition of households, property status, consumer behavior and behavior in the labor market. In low-income countries, mechanisms aimed at limiting consumption and optimizing it with expectations of worsening socio-economic situation in the future currently prevail. First of all, this applies to households whose members are employed in small low-income businesses that have not received real financial support from the state in a crisis situation and do not have the necessary financial resources to survive. This can be the basis for a change in the scope of doing business, a complete exit from it due to disbelief in success and the transition to employment under conditions of competition in the labor market. Of course, over time, the behavior of economic entities and mechanisms of adaptation to the deep crisis will change, but the vector of these changes will depend on the socio-political and socio-economic situation in the country and the effectiveness of public policy in general.
References
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Ukraine of May 15, 2019 № 555 "On approval of the Forecast of economic and social development of Ukraine for 2020-2022"]. news.finance.ua. Retrieved from https://news.finance.ua/ru/news/-/468379/kab-min-opublikoval-obnovlennyj-makroprognoz-na-2020-god-infografika [in Ukrainian].
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ЭКОНОМИКО-ЭНЕРГЕТИЧЕСКАЯ ОЦЕНКА ЭФФЕКТИВНОСТИ ВЫРАЩИВАНИЯ И ИСПОЛЬЗОВАНИЯ БИОЭНЕРГЕТИЧЕСКИХ КУЛЬТУР
Зубар И.В.,
к.э.н. ассистент кафедры административного менеджмента и альтернативных источников энергии, Винницкий национальный аграрный университет
г. Винница, Украина Онищук Ю.В.
к.э.н. ст. преподаватель кафедры административного менеджмента
и альтернативных источников энергии, Винницкий национальный аграрный университет
г. Винница, Украина
ECONOMIC-ENERGY EFFICIENCY EVALUATION OF GROWING AND USE OF BIOENERGY
CROPS
Zubar I.,
Candidate of Economic Sciences, assistant of the Administrative Management and Alternative
Energy Sources Department, Vinnytsia National Agrarian University Vinnytsia, Ukraine Onyshchuk Yu.
Candidate of Economic Sciences, Senior Lecturer of the Administrative Management and Alternative
Energy Sources Department, Vinnytsia National Agrarian University Vinnytsia, Ukraine
Аннотация
В статье определены перспективные направления решения проблемы энергозависимости Украины от импортных энергоресурсов путем развития биоэнергетики. Охарактеризовано потенциал страны для выращивания биоэнергетических культур в условиях Винницкой области с целью определения целесообразности и перспективности использования этих культур как источника альтернативной энергии. Проанализировано влияние почвенно-климатических условий на качество выращенной биомассы. На основе результатов проведенных расчетов энергетической и экономической эффективности выращивания биоэнергетических культур выявлен ряд недостатков в процессе производства биомассы и указано на важность повышения урожайности данных растений. Предложено комплекс мероприятий для повышения урожайности указанных культур путем разработки современных технологий их выращивания, уменьшение потерь урожая при сборе и освоение новых перспективных технологий выращивания биоэнергетических культур. Сделано обзор потенциала отечественной биоэнергетики в разрезе твердотопливной биомассы фитоэнергетических растений энергетической вербы, мискантуса и свитчграса. Выделено ряд факторов, сдерживающих развитие биоэнергетики в Украине и обобщено спектр проблем, требующих немедленного решения.
