Influence of pandemic of coronavirus infection COVID-19 on economic resilience of Ukrainian enterprises

Economic Annals-ХХI: Volume 183, Issue 5-6, Pages: 66-78

Citation information:
Birbirenko, S., Zhadanova, Yu., & Banket, N. (2020). Influence of pandemic of coronavirus infection COVID-19 on economic resilience of Ukrainian enterprises. Economic Annals-XXI, 183(5-6), 66-78. doi: https://doi.org/10.21003/ea.V183-07

Svitlana Birbirenko
PhD (Economics),
Associate Professor,
Odesa National Academy of Telecommunications
1 Kuznechna Str., Odesa, 65029, Ukraine
Sveta_novickaya@ukr.net
ORCID ID: https://orcid.org/0000-0003-2355-4949

Yuliia Zhadanova
PhD (Economics),
Associate Professor,
Odesa National Academy of Telecommunications
1 Kuznechna Str., Odesa, 65029, Ukraine
zhadanova78@ukr.net
ORCID ID: http://orcid.org/0000-0001-5289-3355

Natalia Banket
Lecturer,
Odesa National Academy of Telecommunications
1 Kuznechna Str., Odesa, 65029, Ukraine
banket.n@ukr.net
ORCID ID: http://orcid.org/0000-0001-5047-7278

Influence of pandemic of coronavirus infection COVID-19 on economic resilience of Ukrainian enterprises

Abstract. Introduction. Modern Ukrainian enterprises operate in conditions of uncertainty and risk which could develop in unpredictable way. Currently the critical situation for Ukrainian economy is determined by the spread of pandemic of coronavirus infection COVID-19, which has acquired a global nature. Under the circumstances which has brought the pandemic, many Ukrainian enterprises approached the verge of bankruptcy due to the absence of management mechanism, which main objective is ensuring of economic resilience and maximum management efficiency and creating ability for prospective growth of their potential under the circumstances of force majeure.

The objective of this paper is to study an influence of pandemic of coronavirus infection COVID-19 on economic resilience of Ukrainian enterprises with defining of negative and positive aspects for creation of a background which would enable a development of Ukrainian business in the future.

Results. The global spread of coronavirus infection COVID-19 contributed to risk of recession in the world economy, index of world GDP growth for 2019 equals 2.9%, while the predicted values display its reduction by 3% for 2020, and by 5.8% in 2021. The GDP growth for Ukraine in 2019 equals 3.2%, its reduction in 2020 will make 7.7% and reduction predicted for 2021 makes 3.6%. The number of unemployed has increased in 2020 by 48% compared to the same period of 2019, and according to the forecasts of National Bank of Ukraine in ІІІ quarter of 2020 the rate of unemployment will grow by 12% compared to І quarter of the year. The arrears in wage equal USD 112.7 million. The state budget income deficit equals 29.6%, and specifically customs revenue has decreased by 32.2%. The fiscal revenue for May 2020 displays a slippage by 8.5% compared to May 2019. Currently one third of Ukrainian enterprises lost about 50-75% of their revenue. Most of enterprises of Ukraine show a remarkable growth of accounts receivable, and 7% of enterprises came to a near halt. It means that a new crisis will only make the make larger a rupture between Ukraine and developed countries both in aspect of competitiveness of economy and in that life quality. With regard to necessity of resumption of the operation of enterprises and ensuring their economic resilience almost all countries in the world, which were affected by the pandemic, take certain measures for resuscitation. The major part of the affected countries of the world, including Ukraine, showed their unpreparedness to face the challenges like a pandemic of coronavirus infection. The hard circumstances that Ukrainian entrepreneurs have got in were resulted not only from external political and economic factors, but were determined by the instruments of internal policy of Ukraine, what has led to reduction of business activity, reduction in public consumption and unemployment growth, which factors eventually undermine the mechanism of reproduction in national economy. Another factor which influences Ukrainian economy in a deleterious way is a reduction in global demand, which contributes to a decline in export capabilities of the country. Almost every economic sector of Ukraine sustained major losses, which have significantly influenced the general state of state economy. Only in case of fulfillment by Cabinet of Ministers and National Bank of Ukraine of economically justified efficient anti-crisis program the state has chance to survive the crisis with damages lower than other countries will have. Despite the deleterious effect that coronavirus exercises on Ukrainian economy, there are also some positive aspects of this situation, and the main of them is gaining experience, which would be able to help in the future while managing the country’s own economic resilience to take into account an option functioning in critical circumstances of global extent.

Conclusions. The main problem of Ukrainian business nowadays is the poor knowledge of strategies of enterprise functioning in conditions of force majeure of global extent. The key aspects of efficient anti-crisis program on ensuring of economic resilience of Ukrainian enterprises must include risk assessment, development of well-defined business plan, increasing adaptivity to threats which occur under conditions of continuous business processes and constant iteration and business renewal, which has to face any challenge both on national and global level.

Keywords: Entreprice; Business; Pandemic; Coronavirus Infection; World Economy; Economic Resilience; Efficiency of Operating; Performance

JEL Classification: D59; F29; I12; M20

Acknowledgements and Funding: The authors received no direct funding for this research.

Contribution: The authors contributed equally to this work.

DOI: https://doi.org/10.21003/ea.V183-07

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Received 1.02.2020
Received in revised form 20.02.2020
Accepted 26.02.2020
Available online 4.06.2020
Updated version of the paper as of 20.09.2020