The theses of the Head of the Governing Council of the CENSS Vadym Chernysh were published in the collection of theses of the XII International Scientific and Practical Conference “Modern Problems of Management. The Path to Sustainable Peace after the War: State, Business, Innovation”. It was held on November 24, 2023 by the National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute” under the organization of the Faculty of Sociology and Law.
The resolution of the UN General Assembly A/RES/70/1, adopted on September 25, 2015, states that sustainable development is impossible without peace [1]. By definition, sustainability of development should be understood as its continuity and unceasingness; it is not possible if war stands in its way. When the Russian-Ukrainian war ends, it most likely will not mean that threats to our state originating in Russia will cease to exist.
The nature of future threats originating from the Russian Federation may be different and will obviously include both military and non-military threats. These can be threats of missile attacks on energy facilities, direct invasion or armed conflict on the state border, cyber threats (from coordinated financial fraud to cyber-attacks on critical infrastructure), threats of malicious influence on society as a whole and individual social groups with the aim of deepening contradictions and creating division in it, threats of an economic nature, etc.
Therefore, Ukraine must ensure that the measures to strengthen its stability and the necessary potential are sufficient in the post-war future to deter Russia from a new aggressive war and other malicious actions. This, in turn, should ensure sustainable peace, without which, as already mentioned, sustainable development is impossible.
The level of spending on security and defense of Ukraine as of 2023 should be at least 17.8% of the gross domestic product (GDP) [2]. In 2024, the total financial resource for ensuring the national security and defense of Ukraine is planned to be at least 21.6% of GDP [3]. Considering the risks caused by Russia’s repeated current and past encroachments on the state sovereignty and territorial integrity of Ukraine, our state must maintain a high level of financial and other resources to increase resistance to the above-mentioned threats and counter them even after the end of the ongoing war.
Under such circumstances, it is obvious that Ukraine will not only have to maintain a high level of spending on security and defense, but also to a large extent continue to militarize the economy. All spheres of social and state life already have and will maintain the trend of “militarization” in the future. In view of future threats, public policies in many areas that do not directly belong to the sphere of security and defense should be developed with the awareness of the need to strengthen the resilience of the state and society, their institutions and critical infrastructure. A similar risk-oriented approach, in our opinion, should be used when planning the processes of both the post-war restoration of material objects and the social environment, as well as the further sustainable development of the country.
There is an opinion that peace, as the coming post-war period, will allow Ukraine and the world to receive the so-called peace dividends. The “Peace Dividend” is a concept used to refer to the benefits derived from lower defense spending and the conversion of military to civilian production [4]. One of the authors, for example, claims that military expenditures for assistance to Ukraine from foreign partners, made in significant volumes in the current period, will lead to the restoration of the world order and the possibility to receive dividends of peace in the future [5]. In other words, spending significant Ukrainian and partner resources on Ukraine’s war will lead to a decrease in the flow of resources into the sphere of national security and defense after the war. The above-mentioned conclusions are only partially correct, as they do not correspond to the assessment of threats to the world order as a whole and to the national security of Ukraine, and also do not take into account some features of the state’s actions to strengthen stability and empower defense capabilities. First, as we have already emphasized, threats originating from Russia will not disappear anywhere, therefore, spending on security and defense must remain at a high level. Secondly, according to a number of signs, the Russian-Ukrainian war is already a war of attrition, which requires the state to make long-term decisions and plans for a successful confrontation with the Russian Federation. Having rebuilt the economic, administrative and social processes in accordance with the needs of the war, no state can “with a wave of the hand” return to the post-war state in the mentioned areas. Third, the vast majority of security and defense spending can only work properly in the medium to long term. For example, space programs for the manufacture of military or military-civilian satellites and their launch into orbit cover periods from several to tens of years. Fourthly, in the post-war period, we will need to make up for and compensate for the consequences of the ill-conceived state policy in the field of national security and defense of the previous periods of independence.
Therefore, in the post-war period, we should be careful to count on peaceful dividends. We understand that post-war spending on security and defense should not be equal to today’s level. At the same time, we consider it necessary to maintain a high level of involvement and spending of resources on security and defense in the post-war period. In this case, we can count on “safety dividends”. Security dividends are possible when such a state of security is achieved that will be assessed by the state, society, the majority of communities and individuals as acceptable for sustainable development. Security dividends are financial, material, labor and other resources that can be obtained by the state and communities only under the conditions when the person who intends to invest them assesses the situation in a certain area or in a certain territory as safe.
There is a well-known theoretical debate known as the “guns versus butter” problem. Its essence is to choose between the production of weapons or butter in a theoretical economy with only these two goods, where an increase in the cost of weapons leads to a reduction in the production of butter and vice versa [6]. The main conclusion that we have to draw from this long theoretical discussion is that the state should balance its expenditures, properly ensuring both security and sustainable development.
The division of resources of the state, society and communities into security in the broad sense (including defense) and other non-security resources is not always clear. For example, in the US, spending by the Department of Defense (DoD) is a major driver of economic growth and social stability, as well as growth for many communities and states. The total expenditures of the US Defense Ministry for 2022 amounted to 558.7 billion dollars, of which 390.5 billion were the costs of paying contracts to private companies (Lockheed Martin – 44.5 billion; Raytheon Technologies – 25.4 billion; General Dynamics – 21.5 billion.; Pfizer, Inc. – 16.7 billion; Boeing – 14.2 billion, etc.); 159.4 billion – personnel costs, of which 31% – civilians and 13% – reservists [7]. Those communities and states in which military units are stationed or businesses are located have had significant tax revenues and jobs. Expenditures and investments in research and development work in the military sphere often contribute to the creation of high-tech zones and clusters in which innovative developments are carried out for other (non-military) sectors of the economy. Other examples are spending on education, which results in the growth of human capital, or spending on culture, which contributes to national unity and, ultimately, increases the resilience of society to external erosive influences.
We can conclude that post-war recovery and sustainable development at the state level must take into account potential and real threats to national security. Increasing the resilience of the state, society, their institutions and critical infrastructure to existing and potential threats should be taken into account during the development and implementation of relevant state policies and the implementation of state programs and measures.
References:
- UN General Assembly Resolution A/RES/70/1 dated September 25, 2015. URL:https://www.un.org/en/development/desa/population/migration/generalassembly/docs/globalcompact/A_RES_70_1_E.pdf (access date: 20.11.2023).
- Decree of the President of Ukraine No. 651/2022 “On the decision of the National Security and Defense Council of Ukraine dated September 15, 2022 “On proposals to the draft Law of Ukraine “On the State Budget of Ukraine for 2023″ on articles related to ensuring national security and defense of Ukraine”. URL: https://www.president.gov.ua/documents/6512022-43993 (access date: 20.11.2023).
- Decree of the President of Ukraine No. 682/2023 “On the decision of the National Security and Defense Council of Ukraine dated October 9, 2023 “On proposals to the draft Law of Ukraine “On the State Budget of Ukraine for 2024″ on articles related to ensuring national security and defense of Ukraine”. URL: https://www.president.gov.ua/documents/6822023-48593 (access date: 20.11.2023).
- Michael D. Intriligator. The Concept of a Peace Dividend. Economics of peace and security, Volume 1.
- Horodnichenko Y. Ukraine can save peace dividends. Vox Ukraine. URL: https://voxukraine.org/ukrayina-mozhe-vryatuvaty-dyvidendy-myru (access date: 20.11.2023).
- Alan Farley. What Does “Guns and Butter” Mean in Government Spending? Investopedia. URL: https://www.investopedia.com/ask/answers/08/guns-butter.asp (access date: 20.11.2023).
- Defense Spending by State – Fiscal Year 2022. Office of Local Defense Community Cooperation. URL: https://oldcc.gov/dsbs-fy2022 (access date: 20.11.2023).
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The full collection of conference theses is available here: https://ktpu.kpi.ua/wp-content/uploads/2024/03/Suchasni-problemy-upravlinnya-2023.pdf