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Economics
Ukraine
was the second-ranking Soviet republic in industrial and agricultural
production, after Russia. Long known as the "breadbasket of Europe,"
Ukraine traditionally had a highly developed agricultural sector because
of its vast, fertile lands. It generated more than one-fourth of the total
agricultural output of the Soviet Union. Industrial development was a
high priority of the Soviet government. In the 1930s Ukraine experienced
a rapid and extensive industrial upsurge, mainly in the mineral-rich eastern
regions. Because of Soviet development, which emphasized heavy industry,
Ukraine possesses one of the most industrialized economies of Europe.
However, its industries are highly inefficient and in pressing need of modernization. Ukraine depends on imports of energy, especially natural gas. The collapse of the Soviet Union brought a dramatic rise in energy costs and a reduction in demand for Ukraine's products, causing a catastrophic decline in production. The problems were compounded by high rates of inflation and sluggish reforms to increase private ownership of enterprise.
Shortly after the implosion of the USSR in December 1991, the Ukrainian Government liberalized most prices and erected a legal framework for privatization, but widespread resistance to reform within the government and the legislature soon stalled reform efforts and led to some backtracking. Output in 1992-99 fell to less than 40% the 1991 level. Loose monetary policies pushed inflation to hyperinflationary levels in late 1993
President Kuchma launched an economic reform program in 1994, but monetary stabilization was followed by a huge backlog of unpaid wages and pensions and growing foreign debt. Foreign investors are less than content with unstable laws and a privatization process that lacks transparency. Since the collapse of the USSR, Ukraine has attracted only a fraction of the foreign investments received by neighbors like Poland and Hungary. GDP has steadily fallen since the end of Soviet rule. The onset of the financial crisis in Russia dashed Ukraine's hopes for its first year of economic growth in 1998 due to a sharp fall in export revenue and reduced domestic demand. Output continued to drop, slightly, in 1999. Inflation in 1998 was 20 percent and approximately the same in 1999. The national currency, the hryvnia, is currently trading around 5.30 to the dollar.
Despite increasing pressure from the IMF to accelerate reform, substantial economic restructuring have been very slow to develop, largely because of resistance in the communist-dominated legislature to further privatization.
Recent years, 2002-2004 have seen some improvements in the GDP of Ukraine, with upswings in some sectors of the economy. With an educated work force and rich natural resources, bright days are possible in the future with proper leadership.
Occupations
Major Occupations: industry and construction 32%, agriculture
and forestry 24%, health, education, and culture 17%, trade and distribution
8%, transport and communication 7%, other 12% (1996)
Unemployment: 11% Unemployment Source: Ukraine Minister of Labor (1997).
Under Employment: 50%, Under Employment Source: ibid. also hidden unemployment.:
working but unpaid.
Living Conditions/ Community Development Status
According to the 1999 United Nations Human Development Report, Ukrainians are dying sooner, living poorer and their numbers are steadily shrinking. The annual U.N. human-development index is based on a number of social and economic indicators, including life expectancy, education and income.
According to the U.N., Ukrainians had a life expectancy of 67.4 years in 1997, more than a three-year drop from 1992. People live longer - about 75.2 years - in the Ternopil oblast in western Ukraine. By contrast, lives are shorter in eastern and southern Ukraine. Real per-capita gross domestic product also sank, from $5,010 in 1992 to $2,230 in 1996. Per-capita GDP also varies widely from oblast to oblast, with the eastern industrial regions of Zaparozjya, Donetsk, and Dnipropetrovsk registering the highest.
Another grim statistic: Ukraine is losing its people. It lost nearly 1 percent of its population between 1996 and 1997 alone. The 1997 figure stood at 50.6 million people. The figure for 2000 stood at approximately 49 million. In 2004 the population stands at just under 48 million.
Income sources
It is difficult to know the true amount and sources of any Ukrainians income. While official figures put the figure often at $60 - 70 USD per month, these same figures usually acknowledge what is known as the "gray", or unofficial, economy, which some say may be more significant than these official figures. A doctor, for instance, may quote his official state salary when asked how much he makes. He may, and very likely will, however, receive many times more than that through the unofficial payments from patients he sees each week. This is also true of many other professions. Each clerk at each desk of the bureaucracy must feed his/her family, and since the official salary will not do that, he uses the little bit of clout that he has to receive supplementary income. Westerners often see this as a "bribe" system, whereas Ukrainians simply view this as the way things get done. In addition to this, many people have side jobs they carry out independently of the "real" jobs. Sometimes these extra jobs create much more income than their official ones. All these sources are unofficial, and even among friends people usually don't discuss their "real" income. Much of this mindset has been shaped from the Soviet period when people seldom shared personal information for fear of repression of some sort.
Health Care
The Soviet health care system has been deteriorating during the last decade. Life expectancy at birth for males dropped to 60 years by 1997. Ecological disasters, poor diet, lack of vitamin supplements, and other factors have lowered resistance to diseases. Epidemics of diphtheria, cholera, and hepatitis also occurred in recent years. The spread of AIDS is a serious health concern at this time in Ukraine. During Soviet times, health care was theoretically free to everyone. However, even during those times, some got better treatment than others, depending on what bribes could be paid. Today health care is still supposedly provided by the state, but it is very clear that only with money in hand does one receive decent medical treatment. Those who are less fortunate will receive only what is leftover, unless they are fortunate enough to receive treatment from a compassionate health care professional. Dental care, while readily available, is too expensive for most of the population to take advantage of, thus causing many Ukrainians to have poor teeth. If one were to require surgery, one would likely be given a list of all the medicines and supplies needed for the procedure, and be sent out to find and purchase all these items and bring them back to the hospital. All during the time of the stay in the theoretically free, state provided facility, when some type of procedure or help is required, the family needs to be ready with additional funds to pay the provider of that service.
- Population growth rate: -0.83% (2003 est.)
- Birth rate: 9 - 10 births/1,000 population (2003 est.)
- Death rate: 15 - 16 deaths/1,000 population (2003 est.)
- Infant mortality rate: 14 deaths/1,000 live births (2003 est.)
- Life expectancy at birth:
- total population: 66 - 68 years
- male: 61 - 62 years
- female: 72 - 73 years (2003 est.)
- Total fertility rate: 1.5 children born/woman (2003 est.)
To learn more about East Central Ukraine, click below. Overview of East Central Ukraine What is it like to live it Ukraine? |
