Economy of Ukraine
ECONOMY OF UKRAINE
1. Economic History Note 2. Economic Overview 3. Industry 4. Agriculture 5. Services
1. Economic History Note Ukraine’s economy has historically been determined by such factors as its advantageous geographic location at the crossroads between Europe and Asia, an abundance of the most fertile topsoil called chornozem, a rich base of natural resources and a productive labor force. Metals and minerals like coal, iron ore, gas, stone, sand and salt are abundant in Ukraine. Ukraine has 40 % of the world’s manganese ore, as well as the biggest deposits of ozocerite and sulfur in the world. The country also boasts the largest deposits of graphite in continental Europe. When Ukraine proclaimed independence in August 1991, it had one of the highest indicators for gross national income and also per capita industrial and agricultural production in the former USSR. Ukraine once represented about 5% of global industrial output: 10% of its cast iron production, 9% of steel, and 8% of mined coal. By the 1980s, however, the soviet-style economy began to show considerable unbalance, with an over-emphasis on heavy industries and machine building. More than 80% of industrial manufacturing did not have a closed production cycle, and output of consumer goods was extremely low. From 1991-1994, Ukraine’s economy went into collapse. This transition period led to GDP plunging 40.4% as hyperinflation in 1993 reached a record-high 10,256%. By 1994, the government began to define a strategy for economic reform and mechanisms to overcome the economy’s deep crisis. This stage led to lower inflation, macroeconomic stabilization and a halt in industrial decline. Direct foreign investments increased by 5.8 times in 1995–1998. A phase of economic stabilization and growth started in the first half of 1997, but was interrupted with the start of the Russian financial crisis in 1998. Growth slowly resumed in late 1999 with
1. Economic History Note 2. Economic Overview 3. Industry 4. Agriculture 5. Services
1. Economic History Note Ukraine’s economy has historically been determined by such factors as its advantageous geographic location at the crossroads between Europe and Asia, an abundance of the most fertile topsoil called chornozem, a rich base of natural resources and a productive labor force. Metals and minerals like coal, iron ore, gas, stone, sand and salt are abundant in Ukraine. Ukraine has 40 % of the world’s manganese ore, as well as the biggest deposits of ozocerite and sulfur in the world. The country also boasts the largest deposits of graphite in continental Europe. When Ukraine proclaimed independence in August 1991, it had one of the highest indicators for gross national income and also per capita industrial and agricultural production in the former USSR. Ukraine once represented about 5% of global industrial output: 10% of its cast iron production, 9% of steel, and 8% of mined coal. By the 1980s, however, the soviet-style economy began to show considerable unbalance, with an over-emphasis on heavy industries and machine building. More than 80% of industrial manufacturing did not have a closed production cycle, and output of consumer goods was extremely low. From 1991-1994, Ukraine’s economy went into collapse. This transition period led to GDP plunging 40.4% as hyperinflation in 1993 reached a record-high 10,256%. By 1994, the government began to define a strategy for economic reform and mechanisms to overcome the economy’s deep crisis. This stage led to lower inflation, macroeconomic stabilization and a halt in industrial decline. Direct foreign investments increased by 5.8 times in 1995–1998. A phase of economic stabilization and growth started in the first half of 1997, but was interrupted with the start of the Russian financial crisis in 1998. Growth slowly resumed in late 1999 with