LOCAL CONFLICTS IN THE GLOBAL ECONOMY

Abstract

Introduction. The research of theoretical principles of the impact of local conflicts on the global economy requires an economic understanding of such strategic phenomena as the arms race, the creation of international alliances and the economic effects of military spending. The risks, threats and challenges of direct and indirect losses received by both sides of the conflict also have a negative impact on both third parties and the global economy as a whole. As a result, global leaders and actors involved in conflicts reflect on the effectiveness of their participation in the confrontation. That is why the analysis of local conflicts and assessment of their value in the global economy, given the direct participation of Ukraine in one of these, actualizes the research topic. The purpose is to analyze global changes that provoke local conflicts and research of the cost of local conflicts in the global economy. Methods. In the research process, a set of research methods and approaches were used: monographic and graphical methods, methods of system analysis, systematization, classification, logical, theoretical and generalizations. Results. The unfair distribution of the benefits of globalization threatens conflicts at the regional, national and international levels. Civil or internal wars became widespread, and these “new” wars became clear only in the context of political, economic, and military globalization. There is a correlation between rising war spending and increasing quantity of conflicts. The cost of conflict in the global economy is extremely high, because in addition to the destruction of families, communities and countries, conflicts have negative global economic consequences. The war in Ukraine has significantly affected its economy and financial system, leading to significant material losses due to the physical destruction of housing, infrastructure, social and industrial facilities. Conclusions. Global leaders and key global actors must act quickly and prevent escalation of local conflict. The protection of civilians and their property and the provision of humanitarian and medical assistance should be a priority for participants involved in existing conflicts. A favorable direction for overcoming local conflicts is “investment in humanity”, namely investment in stability, local infrastructure, in order to diversify resources and increase their efficiency. An audit of the costs and benefits of the parties to the conflict will help to understand that the economically they have short-term gain in times less than the income they would have received in the absence of these conflicts.