The Ukrainian Economy Essay Research Paper Since

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The Ukrainian Economy Essay, Research Paper Since moving into a market economy, the Ukraine has faced many problems which have threatened its very existence. High unemployment, inflation, a lack of money to pay for social and economic programs, the effects of the Chernobyl nuclear disaster, and an overall slow move to a free market economy have combined to cause great poverty and suffering for the Ukrainian people . Despite everything going against it, the Ukraine has taken the first steps to turning its situation around, and alleviating the pain and suffering of her ailing citizens. The Ukraine has tremendous economic potential. The vast mineral resources within the Ukraine, which includes large reserves of coal, iron-ore, manganese, bauxite, titanium, and salt, allow for a

large industrial base to be established ( Ukraine- Economy, 1). As a result of the vast resources available, the Ukrainian economy is highly industrialized, with industry accounting for more than 40% of the countries net material product, and 25% of the total employment (Ukraine- Economy, 1). The Ukraine is also heavily reliant on its agricultural background as a key part of it?s economy. The total amount of arable land within the Ukraine amounts to 40, 782, 000 hectares (Detail information about Ukraine, 1). The ?bread basket of Europe? is a major exporter of wheat, sugar beets, potatoes, sunflowers, and flax. In total, agriculture accounts for 30% of the NMP, and 25% of all employment (Ukraine- Economy, 1). The Ukraine is also a huge producer of energy, though it is still

heavily dependent on other CIS states for much of its oil and natural gas needs (Ukraine- Economy, 1). Coal accounts for 30% of the nations energy output, while nuclear power, having been downscaled since the Chernobyl disaster, accounts for only 25% (Ukraine- Economy, 1). The rest of the required energy is brought in from Russia and Belarus. The Ukrainian economy currently has a GDP of $205.4 billion, which is constantly rising with the growing amount of export goods being shipped abroad since the market was opened up (Nato Colloquium 1995, 3). The main exports of the Ukrainian economy are ferrous metals, engines, equipment, appliances, chemicals, minerals, and vehicles, which totaled 74% of total exports (Ukraine- Economy, 1). The major imports are oil, gas, oil products,

automobiles, and plastic and rubber products (Ukraine- Economy, 1). Despite the huge amounts of natural resources possessed by the country, the Ukraine entered the post-communist era in a mess. A huge national debt, mixed with a heavy reliance on other nations for energy, and the political instability within the country during the move to a market economy has put a tremendous strain on the Ukrainian economy (Ukraine- Economy, 1). One of the main causes of the huge national debt of the Ukraine is its reliance on imported fuel. The reliance on foreign fuel was so high, in fact, that the Ukraine had a trade balance of $-1 billion annually, while the national debt rose an average of $5.5 billion dollars a year during the early 90?s (Nato Colloquium, 2). The huge debt, which resulted

due to poor government decisions, a lack of foreign trade, and the reliance on foreign energy sources, created a desperate situation for many citizens (Welcome to Ukraine, 1). The situation was, as it still is, so desperate that many workers haven?t been paid for months, sometimes years (Conclusions, 1). Ukrainian miners alone are owed a total of $367 million (Shafted, 1). Another factor which hindered the Ukraine?s progress in its early days of Capitalism was the lingering effects of the Chernobyl disaster, most noticeably the loss of agricultural trade as a result of radioactive contamination (Ecology and Health, 1). Other serious problems which occurred at the beginning of the Ukraine?s independence were high unemployment and inflation rates (Ukraine- Economy, 1). In 1991 the