ARTICLE
TITLE

FORMATION OF THE MARKET OF WATER RESOURCES AS A PROCESS OF ACCUMULATION OF CAPITAL IN THE REGIONS OF UKRAINE ON THE WAY TO SUSTAINABLE DEVELOPMENT

SUMMARY

The subject of study in this paper is the scientific basis of capitalization of water resources of the regions of Ukraine with a view to accumulating the capital in the regions of Ukraine and their balanced development. The problems of water management complex are conditioned, first of all, by dramatic changes of the institutional environment in the country, weakening of the system of public administration, and considerable reduction of the volume of financing of water-related activities. Critical wear of capital assets of water industry is the cause of negative consequences in the domain of water supply, and the resulting damage to the economy and population in this regard is far greater than the amount of money needed for its prevention. Methodology. We used in our study the traditional and special methods, including: historical and logical method, abstraction and analogy and system analysis methods. Results. This paper states that the problems of development of water management complex of Ukraine can be solved by taking systemic measures aimed at capitalization of water resources, corporatization of water sector management, and institutionalization of the market methods of management. The process of water resources capitalization will give an opportunity to transform the production factor into capital on the basis of harmonization of interests of business entities in order to ensure the sustainable development of the national territorial formations. It should be noted that it is necessary to form the cost of water resources. Study of the cost of water resources determines that today it is not possible to determine this cost in Ukraine, since the market of water resources does not actually exist, and this fact significantly restrains the development of water management complex in the economy. Practical implications. Therefore, in the current economic situation in Ukraine the necessary condition of achieving the objectives of sustainable development is the promotion of processes of the natural resources’ capitalization. The basis of inclusion of the natural potential into economic turnover should become the adequate assessment of water resources which may convert them in the form of financial capital. It is offered to introduce in the economic turnover the system of assessment of water resources based on the differential rent which can provide the capitalization of water resources on demand of sustainable and balanced development of the regions in the conditions of integration changes. The current state of water use is characterized by inadequate mechanism of water resources’ management. In order to increase the level of capitalization of water resources in Ukraine it is necessary to create the mechanism of environmentally sustainable water use based on the renewed institutional environment which would promote the recovery of water resources in the form of the most productive capital. This approach will allow determining the real value and prices of water resources, enhancing their capitalization, eliminating mismanagement syndrome and free-of-charge principle for the resources from the economic turnover, and promoting development of the natural infrastructure. Value/originality. Despite the existence of studies of the problems concerning the recovery of the natural and water resources, development of the regional social and economic systems, conducted by Ukrainian and foreign researchers, the issue of capitalization of water resources in the system of development of the regional socio-economic systems today remains a subject of scientific discussions.

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