Present-day independent Ukraine has a considerable potential to quickly develop its economy – and this is explained not only by the favourable natural conditions, but also by the convenient geographical position in terms of international exchanges.
With rich farmlands, a well-developed industrial base, highly trained labor force of 20 million, and good education system, Ukraine has the potential to become a major European economy. The economy of Ukraine is an emerging free market, with a gross domestic product that fell sharply for the first 10 years of its independence from the Soviet Union and then experienced rapid growth from 2000 until 2008. Ukraine’s economy experienced a sharp slowdown in late 2008, which continued through 2009. After contracting 15.1% in 2009, GDP is estimated to have bounced back only 4.2% in 2010.
Ukraine’s economy remains burdened by excessive government regulation, corruption, and lack of law enforcement, and while the government has taken steps against corruption and small and medium enterprises have been largely privatized, much remains to be done to restructure and privatize key sectors such as energy and to create a market system for agricultural land. President Yanukovych chairs a Committee on Economic Reform, and in 2010 Ukraine developed an economic reform plan for 2010-2014. In December 2010 a comprehensive new tax code was passed by parliament and signed into law, provoking major street protests in Kyiv.
Ukraine ostensibly encourages foreign trade and investment. Foreigners have the right to purchase businesses and property, to repatriate revenue and profits. However, the country's complex laws and regulations, poor corporate governance, weak enforcement of contract law by courts, and particularly corruption have discouraged broad foreign direct investment in Ukraine. While there is a functioning stock market, the lack of protection for minority shareholder rights...