Baltic Journal of Economic Studies 147 Vol. 11 No. 1, 2025 This is an Open Access article, distributed under the terms of the Creative Commons Attribution CC BY 4.0 1 Central Scientific Research Institute of Armament and Military Equipment of Armed Forces of Ukraine, Ukraine (corresponding author) E-mail: military.technology@icloud.com ORCID: https://orcid.org/0000-0003-3542-5407 2 Central Research Institute of the Armed Forces of Ukraine, Ukraine E-mail: sergiigodz1968@ukr.net ORCID: https://orcid.org/0000-0002-7860-2330 3 Military and Strategic Research Centre of the National Defence University of Ukraine, Ukraine E-mail: ovk1923@ukr.net ORCID: https://orcid.org/0009-0001-1122-1453 DOI: https://doi.org/10.30525/2256-0742/2025-11-1-147-154 ECONOMIC SECURITY OF THE STATE UNDER MARTIAL LAW Volodymyr Mozharovskyi1, Serhii Hodz2, Oksana Kolesnyk3 Abstract. The experience of conducting operations (combat actions) during the repulsion of the large-scale armed aggression of the Russian Federation against Ukraine demonstrates the need to increase the combat potential and combat capability of the Armed Forces of Ukraine in order to acquire operational and combat capabilities sufficient to perform the tasks of state defence. The development and acquisition of these capabilities is contingent upon the military-economic potential of the state in question. This potential can be conceptualised as a combination of two distinct yet interrelated dimensions: the economic and military facets. Simultaneously, the preservation (protection) of the military and economic potential of the state largely depends on its Armed Forces, which, as a military formation, are responsible for the defence of Ukraine, protection of its sovereignty, territorial integrity and inviolability, according to the Constitution of Ukraine. This confirms the interconnection of the two components of national security (economic and military). At the same time, the military- economic security of the state should be considered as an integral result of the activities of the military-political leadership of the state, aimed at ensuring armed protection of its interests. The required level of operational (combat) capabilities of the Armed Forces of Ukraine is achieved through a significant set of measures, including measures of resource, primarily logistical, support of troops (forces). The level of logistical support of military formations largely depends on the military and economic potential of the state. However, in peacetime and wartime, the organisation of logistics support for troops (forces) has certain differences, and the main difference is the growing level of military threats to the military-economic potential of the state and the possibility of further escalation of these threats into a military conflict (armed aggression). Accordingly, the level of military threats to the economic security of the state is growing. In order to counteract armed aggression and preserve (protect) the military and economic potential of the state, Ukraine introduced the legal regime of martial law. Nevertheless, as of today, the functioning of relations and activities of the relevant institutions for ensuring the economic and military security of the state under the legal regime of martial law remain unregulated and not balanced within the legal framework. This requires the military and political leadership of the state to take the necessary measures to ensure the required level of military and economic security of the state. Consequently, military science (its branches) faces the need to address the existing problems of economic and military security of the state, in particular, to improve (bring into line) legislation in the field of national security and defence and to develop scientifically based recommendations for increasing the combat capability of the Armed Forces of Ukraine, achieving the required level of their operational and combat capabilities to perform the tasks of state defence. A significant gap in the modern theory of economic security of the state is the lack of a comprehensive approach to the study of the problems of functioning of military-economic security relations and the relevant institutions of the state that regulate them under martial law. The interrelation of economic and military security as components of the national security of the state is only partially traced in existing scientific approaches. The peculiarities of the economic security of the state under martial law (armed aggression) are also considered rather superficially. The dependence of the level of military-economic security of the state on the level of threats to its national security in the military sphere requires Baltic Journal of Economic Studies 148 Vol. 11 No. 1, 2025 scientific substantiation. The purpose of the article is to present the views on the essence and features of economic security of the state under martial law. Keywords: national, economic, military (military-economic) security of the state; defence capability; military- economic potential; combat capability; operational, combat capabilities. JEL Classification: F52, H56 Problem statement. The experience of conducting operations (combat actions) during the repulsion of the large-scale armed aggression of the Russian Federation (RF) against Ukraine demonstrates the need to increase the combat potential and combat capability of the Armed Forces of Ukraine in order to acquire operational and combat capabilities sufficient to perform the tasks of state defence. The acquisition and development of these capabilities is contingent upon the military-economic potential of the state. This should be considered as a combination of two potentials: economic and military. Concurrently, the preservation (protection) of the military- economic potential of the state is contingent upon its Armed Forces (AF), which, as a military formation, are charged by the Constitution of Ukraine with the defence of Ukraine, the protection of its sovereignty, territorial integrity and inviolability. This confirms the interconnection of the two components of the national security of the state: the economic and military aspects. Simultaneously, the military-economic security of the state should be regarded as an integral result of the activities of the military-political leadership of the state, with the aim of ensuring armed protection of its interests. The required level of operational (combat) capabilities of the Armed Forces of Ukraine is achieved through a significant set of measures, including measures of resource, primarily logistical, support of troops (forces). The level of logistical support of military formations largely depends on the military and economic potential of the state. However, in peacetime and wartime, the organisation of material and technical support (MTS) for the troops (forces) has certain differences, and the main difference is the growing level of military threats to the military and economic potential of the state and the possibility of further escalation of these threats into a military conflict (armed aggression). Accordingly, the level of military threats to the economic security of the state is growing. In order to counteract armed aggression and preserve (protect) the military and economic potential of the state, Ukraine introduced the legal regime of martial law. Nevertheless, as of today, the functioning of relations and activities of the relevant institutions for ensuring the economic and military security of the state under the legal regime of martial law remain unregulated and not balanced within the legal framework. This requires the military and political leadership of the state to take the necessary measures to ensure the required level of military and economic security of the state. Accordingly, military science (its branches) faces the need to address the existing problems of economic and military security of the state, in particular, to improve (bring into line) legislation in the field of national security and defence and to develop scientifically based recommendations for increasing the combat capability of the Armed Forces of Ukraine, achieving the required level of their operational and combat capabilities to perform the tasks of state defence. Information. The military-economic aspects of maintaining the defence capability of the state in the current conditions of development of the military-strategic situation, in particular, the problems of mobilisation readiness and mobilisation capabilities of the state and the problems of functioning of the defence industry of Ukraine, were outlined in the authors' previous publications (Mozharovskyi, Hodz), and also covered in a number of regulatory legal acts (The Law of Ukraine "On National Security of Ukraine"; The Law of Ukraine "On the Legal Regime of Martial Law"; The Law of Ukraine "On Defence of Ukraine"; The National Security Strategy of Ukraine: enacted by the Decree of the President of Ukraine, etc.). Analysis of recent research and publications. A significant number of scientific papers and publications are devoted to the study of economic security of the state, in particular (Sukhorukov, Moshenskyi, Petruk, 2010; Hubskyi, 2001; Senchahov, 1995; Stachowiak, 1994; Boiko, 2015; Muntiian, 1998). However, one of the most important problems that significantly slows down the development of the theory of economic security is the lack of scientific consensus on understanding the essence of the concept of "economic security of the state". Moreover, a significant gap in the modern theory of economic security of the state is the lack of a comprehensive approach to the study of the problems of functioning of military-economic security relations and the relevant institutions of the state that regulate them under martial law. The interconnection of economic and military security as components of the national security of the state is only partially traced in the above scientific approaches. The peculiarities of economic security of the state under martial law (armed aggression) are also considered rather superficially. There is no scientific substantiation of the dependence of the level of military-economic security of the state on the level of threats to its national security in the military sphere. Baltic Journal of Economic Studies 149 Vol. 11 No. 1, 2025 Formulation of the article's purpose. The purpose of the article is to present the views on the essence and features of economic security of the state under martial law. Presentation of the main research material. There are several scientific approaches to defining the concept of ‘economic security of the state’ (Table 1). At the same time (according to the authors of the article), in order to establish the interrelation between the economic and military components of the national security of the state, the concept of "economic security of the state" should be considered through the prism of the following key concepts: "national security of the state", "military security of the state", "military threats", "threats to military security of the state", "martial law". Each of the above approaches focuses on one of the important aspects of "economic security of the state" as a complex and multifaceted concept, but no scientific consensus has been reached on the understanding of the essence of this concept. At the same time, the tendency to cover all important factors within a single definition of ‘economic security of the state’ is becoming increasingly widespread in Ukrainian scientific thought. It is driven by the desire to combine different approaches to defining the economic security of the state and to present a universal, generally accepted interpretation of this complex concept, which may become the basic one in the future. However, the interconnection of economic and military security is only partially traced in these scientific approaches, and the peculiarities of the economic security of the state in the context of martial law (armed aggression) are considered rather superficially. At the same time, the dynamics of development of the military-political and military-strategic situation around Ukraine and the need to build up and preserve (protect) its military-economic potential necessitate that scientific and theoretical developments in the field of economic security of the state should be as close as possible to their practical application, primarily taking into account the peculiarities of the functioning of the state economy under martial law. It should be noted that "national security of Ukraine" means the protection of state sovereignty, territorial integrity, democratic constitutional order and other national interests of Ukraine from real and potential threats. The components of the national security of the state are economic, military, foreign policy, state, information, environmental security, critical infrastructure security, cybersecurity, and so forth (The Law of Ukraine "On National Security of Ukraine"). The term "military security of the state" refers to the protection of state sovereignty, territorial integrity and democratic constitutional order and other national interests of Ukraine from military threats (The Law of Ukraine "On National Security of Ukraine"). Table 1 Main scientific approaches to the definition of the concept of "economic security of the state" Approach name Generalised definition of the concept of "economic security of the state" Scholars' views on the definition of the concept of “economic security of the state” Conditional A set of certain conditions that ensure the implementation of the tasks set by the state. A. Sukhorukov: "a set of conditions under which the country's ability to effectively protect national economic interests and withstand external economic threats is preserved..." Qualitative The most significant qualitative attribute of an economic system is that which determines its capacity to ensure the maintenance of normal conditions for the functioning and activities of its key stakeholders: the state, business and citizens. B. Hubskyi: "the ability and readiness of the economy to ensure the socio-economic, military and political stability of society and the state, and to counteract the impact of internal and external threats". Protectionist (Latin: security/ protection) Protection of the state, business and citizens from internal and external threats. V. Senchahov: "the state of the economy and government institutions that ensures guaranteed protection of national interests, socially oriented development of the country... sufficient defence potential even in the most unfavourable conditions of internal and external processes". Static The state of the economy, which allows the state to perform its functions and counteract external and internal threats. Z. Stakhoviak: " the state of development of the national economic system, which ensures high efficiency of its functioning due to ... the ability to effectively resist external pressure... ". Resource The resource, functional and institutional capacity of the state to timely counter threats in the face of constant changes in the economic environment and to ensure the protection of national interests. V. Boiko: "the resource, functional and institutional capacity of the state to timely counter threats... to ensure the protection of national interests, to pursue an independent policy in the domestic and foreign spheres...". Teleological (Greek: perfect) Security is not a favourable set of circumstances, but the result of deliberate and purposeful activity to achieve such a state. V. Muntiian: "a nationwide set of measures aimed at the continuous and stable development of the state's economy, which includes a mechanism for counteracting internal and external threats". Baltic Journal of Economic Studies 150 Vol. 11 No. 1, 2025 In the system of national security and defence, military security is also defined as the defence of the state. The Constitution of Ukraine assigns the task of defending the state exclusively to the Armed Forces of Ukraine. The second component of the tasks of the Armed Forces of Ukraine, namely the protection of sovereignty, territorial integrity and inviolability, is also defined as the most important function of the state and the responsibility of the entire Ukrainian people. The primary objective of ensuring military security is to eliminate external and internal threats to the national security of the state in the military sphere and to create favourable conditions for the guaranteed protection of its national interests (The Law of Ukraine "On National Security of Ukraine"). At the same time, "military threat" is usually understood as a state characterised by the existence of a potential possibility of using military force against the state to achieve political, economic and other goals (intentions or actions of one of the parties to military-political relations that indicate readiness to use military force against the other party to achieve its own goals). The term "threats to military security" is defined as existing and potentially possible events, processes or other factors that pose a threat to the realisation of vital interests in the military sphere. Concurrently, "armed aggression" is comprehended as the utilisation of armed force by another state or collective of states against Ukraine (in particular, an incursion or onslaught by the armed forces of another state or collective of states on the territory of Ukraine, as well as the occupation or annexation of the territory of Ukraine) (The Law of Ukraine "On Defence of Ukraine"). In order to counter armed aggression and preserve (protect) the military and economic potential of the state, Ukraine introduced the legal regime of martial law. Martial law is a special legal regime introduced in Ukraine or in certain parts of its territory in the event of armed aggression or the threat of attack, endangerment of Ukraine’s state independence, or its territorial integrity. It grants the relevant state authorities, military command, military administrations, and local self-government bodies the necessary powers to counter threats, repel armed aggression, ensure national security, and eliminate dangers to Ukraine’s state independence and territorial integrity (The Law of Ukraine "On the Legal Regime of Martial Law"). It should be noted that the issues of national (including military and economic) security of the state are set out in a number of legal acts of Ukraine. The main long-term planning document that defines the main directions of the state policy in the field of national security is the National Security Strategy of Ukraine, which is developed on behalf of the President of Ukraine, approved by the National Security and Defence Council of Ukraine and approved by a decree of the President of Ukraine. The National Security Strategy is the basis for the development of other national security and defence planning documents, including the Military Security Strategy of Ukraine, the Economic Security Strategy of Ukraine, and the Strategy for the Development of the Defence Industry of Ukraine (Mozharovskyi, Hodz, 2024; Hodz, Mozharovskyi, 2023). These strategies are interrelated and interdependent. The Economic Security Strategy of Ukraine defines the ways to achieve the goals and priorities of national interests in the field of economic security. According to this Strategy, economic security is defined as "the state of the economy in which the main national economic interests are achieved" (The Economic Security Strategy of Ukraine). Furthermore, one of the main national economic interests is to ensure economic sustainability, which is extremely important in the context of martial law. Economic resilience is understood as the ability of the economic system to withstand the impact of negative factors arising from military threats (armed aggression). The achievement of national economic interests requires the development and implementation of a state policy aimed at both the sustainable increase in the competitiveness of Ukraine's economy and the gradual strengthening of economic sustainability and, accordingly, the resilience of the national economy to external and internal threats. The state policy in the field of economic security has two interrelated areas: development and meeting the needs of the Armed Forces of Ukraine and other components of the defence forces under martial law. The Strategy defines the components (spheres) of Ukraine's economic security, as well as the main threats that are specific to each of these spheres (Figure 1). However, the above-mentioned main threats to the economic security of the state are only partially related to wartime, in particular, to the peculiarities of the functioning of the state economy under martial law (armed aggression). Both the Economic Security Strategy of Ukraine and other legal acts have a number of shortcomings, in particular: – The peculiarities of the economic security of the state in the context of armed aggression are not fully disclosed, taking into account the targeted destruction of national economic facilities, including the defence industry, and critical infrastructure of Ukraine. Thus, according to various official information sources (including the Ministry of Energy and Ukrenergo), from September 2022 to September 2024, Russia carried out more than 25 massive drone attacks on Ukraine's energy system, threatening its stability and integrity. In total, during this period, the aggressor launched more than 1,400 missiles of various types and 500 attack UAVs. The most significant damage to the energy infrastructure occurred in Dnipropetrovsk, Baltic Journal of Economic Studies 151 Vol. 11 No. 1, 2025 Lviv, Vinnytsia, Zaporizhzhia, Ivano-Frankivsk, Kyiv and Kharkiv oblasts. As a result of the occupation and attacks in 2022-2023, Ukraine's power system lost about 21 GW of capacity. In 2024, the losses from the missile and drone campaign are estimated at more than 9 GW of thermal and hydro generation. In addition to generation, Russia also regularly strikes at critical power grid nodes to destabilise the power system and limit the ability to transmit electricity within the country, as well as to complicate its imports (Mozharovskyi, Hodz, 2024; Hodz, Mozharovskyi, 2023). – The problems of the state's economic security are not reflected, taking into account the territories temporarily occupied by the Russian Federation and the territories where military operations are (were) conducted (Donetsk, Luhansk, Kharkiv, Kherson, Zaporizhzhia, Sumy oblasts and the Autonomous Republic of Crimea). Most of these are important industrial regions and special resource zones of Ukraine, which play an important role in shaping its military and economic potential. For example (according to various official information sources), in 2024, Ukraine lost control of more than 3,600 square kilometres of territory, including more than 20 square kilometres per day in November 2024, while in 2023, a total of about 540 square kilometres were lost and about 430 square kilometres of Ukraine's territory were liberated (Mozharovskyi, Hodz, 2024; Hodz, Pantiushenko, 2024; Hodz, Mozharovskyi, 2023). – Significant migration of the working-age population and the outflow of skilled personnel abroad due to the hostilities on the territory of Ukraine are not fully monitored and taken into account. In particular, according to the official data of the State Border Guard Service of Ukraine, over the three years of hostilities, about three million citizens have not returned to Ukraine. This is almost as many as in the 11 years preceding the full-scale invasion, i.e., from 2011 to 2021. A significant number of these citizens are able-bodied individuals, including skilled workers in various sectors of the national economy (industry, construction, agriculture, trade, and management) (Mozharovskyi, Hodz, 2024; Hodz, Pantiushenko, 2024). – The problems of MTS of troops (forces), primarily with combat-ready weapons, military and special equipment, missiles, ammunition, military and technical property and fuel, are not fully taken into account in the conditions of operations (combat actions) (Hodz, 2024; Hodz, Pantiushenko, 2024). – The problems of losses and expenditures of material and technical resources (MTR) in the context of hostilities and their replenishment at the expense of revenues from the national economy (defence industry enterprises) of Ukraine remain unaddressed (Mozharovskyi, Hodz, 2024; Hodz, Mozharovskyi, 2023). – The issues of resource (MTS) training of troops (forces), especially units that restore combat capability and are formed under martial law, are not agreed upon (Hodz, 2024). – The issues of continuous supply of groups of troops (forces) engaged in combat operations with MTR are not considered (Hodz, Pantiushenko, 2024; Hodz, Mozharovskyi, 2023). Figure 1. Components (areas) of Ukraine's economic security, main threats specific to each area Main threats State budget deficit; problems of taxation and long-term lending; low level of stock market liquidity, etc.  Financial security Industrial security Main threats Deindustrialisation of the economy; low resource efficiency of the economy and significant resource intensity of production; mismatch between the structure of the economy and technological development; poor development of critical infrastructure facilities, etc. Foreign economic security Main threats Insufficient pace of diversification of Ukraine's trade flows; prevalence of raw materials in exports and high-tech products in imports; significant import dependence of the economy; restrictions on the export of Ukrainian goods, etc. Investment and innovation security Main threats Problems of attracting investment and reinvestment; lack of evidence-based monitoring of Ukraine's investment potential; absence of favourable conditions for the creation and development of innovative enterprises and infrastructure; poor condition of research infrastructure facilities and the amount of funding for scientific, research and development and innovation activities, etc. Macroeconomic security Main threats Falling prices for key domestic goods; decline in economic activity in the country; increased inflation and exchange rate fluctuations; rising poverty, unemployment, significant labour migration and outflow of skilled personnel; low growth rates of labour productivity, etc. Economic security of Ukraine and its components (areas) Baltic Journal of Economic Studies 152 Vol. 11 No. 1, 2025 – The problem of reducing the loss of MTR by echeloning and distributing them by levels (links) of subordination of troops (forces) and places of detention (military, operational, strategic) has not been fully resolved (Hodz, Pantiushenko, 2024). – The ways of solving key problems of preserving (protecting) the military-economic potential of the state, as the basis of its defence capability, in the conditions of large-scale armed aggression are not disclosed (Mozharovskyi, Hodz, 2024; Hodz, Mozharovskyi, 2023). The concept of "military-economic security of the state" (essence and content) needs to be clearly defined as a combination of components (spheres) of military and economic security of the state. There is no scientific justification for the dependence of the level of military-economic security of the state on the level of threats to its national security in the military sphere. Lack of scientific substantiation of the interconnection of economic, military and other components of national security (information, foreign policy, state, cyber, critical infrastructure, environmental) in the context of martial law (armed aggression) (Figure 2). Conclusions and prospects for further research. The article presents the views on the essence and peculiarities of economic security of the state under martial law. The authors focus on the interconnection of economic and military security of the state under the legal regime of martial law (armed aggression) and the need to preserve (protect) the military and economic potential of the state as the basis for resource (logistical) support of the Armed Forces of Ukraine. Despite significant problems with the development of the state's military and economic potential in recent decades, it ensured the ability of the Armed Forces of Ukraine to repel Russia's armed aggression in February 2022. The gradual restoration and enhancement of the capabilities of the Ukrainian defence industry has increased the combat potential and combat capability of the Armed Forces of Ukraine, and ensured the successful conduct of a number of operations (combat Figure 2. Interrelation of economic, military and other components of the national security of the state in the conditions of martial law (armed aggression) Problems of forming reserves, creating military, operational and strategic stocks (echeloning) of MTR Problems of continuous provision of MTR to groups of troops (forces) engaged in combat operations, training of troops (forces), as well as MTS to units (subunits) restoring combat capability (being formed)  Foreign policy security Information security Economic security State security Military security Cybersecurity Environmental safety Critical infrastructure security NATIONAL SECURITY OF UKRAINE Conducting missile and bomb attacks on the national economy and infrastructure of Ukraine in order to destroy its military and economic potential Temporary occupation of a part of the territory of Ukraine, its economic (industrial) regions and special raw material zones Significant migration and outflow of skilled personnel (working-age population) abroad due to the hostilities in Ukraine LEGAL REGIME OF MARTIAL LAW (ARMED AGGRESSION) Military and economic security Increased needs of the Armed Forces of Ukraine for logistical support to build up their combat potential, combat capability, and acquire the necessary operational and combat capabilities  Baltic Journal of Economic Studies 153 Vol. 11 No. 1, 2025 actions) by groups of troops (forces) of the Armed Forces of Ukraine in the designated operational and strategic (operational) areas in 2022-2024. Meanwhile, the authors of the article point out that the functioning of relations and activities of the relevant institutions for ensuring economic and military security of the state under the legal regime of martial law is not regulated, and they are not balanced within the legal framework. The dynamic development of the military-political and military-strategic situation around Ukraine requires the military-political leadership of the state to take necessary and timely measures aimed at ensuring the required level of military-economic security and defence capability of the state in the context of prolonged hostilities. In particular, this refers to the ability of the Cabinet of Ministers of Ukraine to effectively exercise executive power directly and through ministries, other central executive bodies and local state administrations (civil-military administrations), to direct, coordinate and control the activities of these bodies under the legal regime of martial law, focusing on ensuring the defence needs of the state. Measures to ensure the resilience of the national economy and infrastructure, build up its mobilisation capabilities, and protect civilians and facilities in the context of hostilities are of great importance. The paper emphasises that military science (its branches) now faces the need to address the existing problems of economic and military security of the state, in particular, to improve (bring into line) legislation in the field of national security and defence and to develop scientifically sound recommendations for increasing the combat capability of the Armed Forces of Ukraine. The analysis of extant scientific approaches to the definition of the concept of "economic security of the state" reveals the absence of a universally accepted interpretation of this complex concept. It is therefore concluded that the concept cannot be considered as a basis for future development. The authors believe that in the above scientific approaches, the relationship between economic and military security is only partially traced, and the peculiarities of the economic security of the state in the conditions of martial law (armed aggression) are considered rather superficially. Accordingly, there is a need for a clear definition of the concept of "military-economic security of the state" as a combination of components (spheres) of military and economic security of the state. A significant gap in the modern theory of economic security of the state is the lack of a comprehensive approach to the study of the problems of functioning of military-economic security relations and the relevant institutions of the state that regulate them under martial law. The dependence of the level of the military- economic security of the state on the level of threats to its national security in the military sphere requires scientific substantiation, which requires improvement (development) of the relevant methodological apparatus for substantiation and determines the prospects for further research in this area. References: Mozharovskyi, V., & Hodz, S. (2024). Military-economic aspects of maintaining the state's defence capability in the current military and strategic situation. Baltic Journal of Economic Studies. Vol. 10. No. 2. Р. 150–159. DOI: https://doi.org/10.30525/2256-0742/2024-10-1-185-193 Mozharovskyi, V., & Hodz, S. 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The National Security Strategy of Ukraine: enacted by the Decree of the President of Ukraine No. 392/2020 of September 14, 2020. The Military Security Strategy of Ukraine: enacted by the Decree of the President of Ukraine of March 25, 2021 No. 121/2021. The Economic Security Strategy of Ukraine for the period up to 2025: enacted by the Decree of the President of Ukraine No. 347/2021 dated August 11, 2021. Received on: 12th of January, 2025 Accepted on: 19th of February, 2025 Published on: 13th of March, 2025