THE ROLE OF MUNICIPAL BUDGETS IN THE MUNICIPAL UTILITY SECTOR POST-WAR RENNOVATION
Abstract
The military invasion of the part of Ukrainian land led to significant infrastructural destruction, including those belonging to critical infrastructure, most of which are the communal sphere enterprises. Thus, according to the data provided in the joint report of the World Bank, the European Commission and the Ukrainian government, the total direct damage caused to Ukraine (primarily to the housing complex, industry, transport, trade) from February 24 to June 1, 2022 amounted to 97 billion dollars. Added to this are the losses caused by the disruption of production chains and flows, which are estimated at 252 billion dollars. Experts and scientific circles emphasize the need to use the sanctioned funds of the aggressor country to restore the Ukrainian economy, however, as repeatedly emphasized by foreign scientists, government officials and representatives of international organizations, currently the mechanism for directing the frozen assets of the aggressor country to the restoration of Ukraine has not been developed, and its development may take a long time. In the conditions of uncertainty with the sources of external financial resources for the restoration of the destroyed infrastructure and the mechanisms of using such resources, the development of internal mechanisms of direct and indirect participation of local budgets is gaining relevance. In the pre-war period, utility enterprises of critical infrastructure were the largest recipients of funds from local budgets, and the amount of this funding increased manifold. In the reports of the Ukrainian Antimonopoly Committee, during 2018-2020, it is emphasized the significant increase in the amount of such aid at the expense of local budgets for the period 2018-2020, namely from UAH 622.32 mln in 2018. up to UAH 4,281.34 min in 2020, i.e. almost in 7 times. At the same time, the profitability of such enterprises remained extremely low. Despite the implementation of the revenue plan of local budgets, there is a lack of internal financial resources to cover the need for the restoration of the communal sector. In this regard, it is proposed to transform the role of local budgets from the role of a donor to the role of an intermediary, controller and guarantor in servicing external financial resources.
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