Ukraine

A country report

Robert Anderson

Robert AndersonSocial Studies 10

12/7/10Ukraine

Ukraine is an LEDC that has encountered problems throughout most of its history. It has been independent for only 22 years of the past 100 years. It gained its most recent independence in 1991, with the fall of the USSR. Ukraine has gone through several massive blights on its existence. The two most impacting were the Holodomor and the Holocaust. These two genocides resulted in massive loss of life and a crushing decline in labor. The Holodomor claimed the lives of 8,000,000 Ukrainian men and woman, and the Holocaust resulted in the slaughter of 900,000 Ukrainian Jews. Despite occurring in the 1930’s and 1940’s, the loss of life was so huge, that Ukraine had trouble keeping up with the rest of the world economically and fell even further behind. Afterwards, Ukraine was unable to recover due to the oppressive Soviet rule it would endure until 1991. Unfortunately, the new Ukrainian government still wouldn’t allow economic freedom. Because of a lack of freedom, and constant horrific tragedies, Ukraine remains an LEDC.

Geographically, Ukraine is located in Eastern Europe. It shares borders with Russia, Belarus, Poland, Romania, Moldova, Hungary, and Slovakia. Russia is its largest trading partner, and has historically been very influential in Ukraine. Its proximity with Russia has caused several problems, though it has come with some benefits. A major problem about this border is that Russia has in the past been known to take Ukraine’s resources, though as Ukraine’s involvement in the USSR came to a close, so did Russia’s habit of robbing the nation of its resources. Because Russia is Ukraine’s largest supplier of oil, which is the most used fossil fuel, when Russia drove up the price of oil exported to Ukraine in 2009, economic issues instantly took hold. Ukraine’s proximity to two inland seas, the Black Sea and the Sea of Azov, helps it export its goods slightly easier. Unfortunately, the Black Sea and the Sea of Azov’s connection to the Atlantic Ocean is very small, so it’s not as easy to export as it would be if Ukraine had direct access to the Ocean, like the manufacturing giants China and the USA. Due to the difficulty with exporting its merchandise, Ukraine is limited to trading mainly with its LEDC neighbors. Because of the weak economies of its major trading partners, not even the international market brings in much money to the impoverished nation. At this moment, Ukraine is suffering the same economic woes that it has for its entire existence. It has an inflation rate of 15.9%, this is 12% higher than the healthy inflation rate of 3%. Many LEDC’s, such as Zimbabwe have characteristically high inflation rates. Out of control inflation, like seen here in Ukraine, indicates an LEDC. The inflation rate is decided based on the actions of buyers and sellers in the market place. In Ukraine, it appears as though the producers are constantly raising the price, indication an unstable economy. It has a

GDP per capita of $6,300, and a reported unemployment rate of 8.8%. The actual unemployment situation is believed by the American government to be much higher. High unemployment is another indicator of an LEDC, because it detracts from a nations potential human resources. Just as a sign of how difficult times are in Ukraine right now, they have a GDP growth rate of -15.1%. This is a rapid decline of an already dismal economy; this really became a huge issue during the 2008 financial crisis. The Ukrainian economy has begun a recovery from this, and it has an expected GDP growth of 4.6% for 2011. Ukraine’s economic freedom is ranked 1.35, placing it as 133rd on the list of nations. This is a horrible lack of economic freedom and is potentially why the nation is constantly suffering economic hardship.

Distribution of Workforce

AgricultureIndustryServices

Ukraine’s largest distribution of its human resources is the service industry. This is generally indicative of an MEDC, however, Ukraine remains an LEDC. Ukraine has 15.8% of its population working in agriculture. There are much fewer farmers working in Ukraine now as there had been before its recent independence. Despite having been one of the most fertile republics in the USSR, its agriculture industry has sharply declined since more economic freedom was introduced. The Ukrainian government is now trying to find ways to support local businesses which, if successful, will help raise Ukraine’s GDP. With the increase in industry that the Ukrainian government is trying to stimulate, entrepreneurship will definitely expand. Entrepreneurship is a cause of great economic success, and is currently not very prevalent in Ukraine. If the entrepreneurship did take place, it’s likely that they would be heavily moderated and controlled by the Ukrainian government, because Ukraine doesn’t allow much economic freedom. Entrepreneurship is one of many things that Ukraine could allow and potentially lesson the economic woes the Ukrainians endure daily.

Use of Land

FarmingPermanent Cropsother

Ukraine’s land is mostly used for agriculture, though its farming population has decreased. Ukraine currently has restrictions on the sale of agricultural land, which according to Ukrainian President Yanukovych, one reason why Ukraine has not seemed appealing for investors. Estimates put the worth of Ukraine’s agricultural land at $59.2 billion. Ukraine could benefit greatly from allowing investors to purchase the land, and it’s something the Ukrainian government is working on now. Ukraine has high potential with its natural resources, and its government is aware of that. Currently President Yanukovych is in talks with his cabinet and agricultural experts on how to increase the productivity of its natural resources. Yanukovych’s main concern, the real estate dealing with agricultural land, is bringing in foreign capital goods to stimulate the economy. This will really help the Ukrainian economy more than anything else that is currently in the Ukrainian economic news, and is one reason why the Ukrainian GDP growth rate is expected to make the enormous rebound from -15.1% to 4.6%. Largely agricultural nations are generally LEDC’s, because the abundance of agriculture indicates that the nations industries aren’t developed enough to support large-scale jobs. Most nations that are largely agricultural haven’t quite began the massive urbanization that most modern day MEDC’s went through at some point in their history.

The population growth rate of Ukraine is -0.619%. With negative population growth, the human resources will dwindle. MEDC’s that have negative population growth try to combat it with the development of robots to replace menial laborers. Ukraine does not have access to as many technological advancements and so will suffer economically. Currently, Ukraine has a strong population of people in their 20’s and 30’s and its human resources in the workplace are increasing. Unfortunately, many of these human resources are not productively working and draining money from the economy rather than bringing money in. Ukraine has limited time with it’s decreasing population and will need to do something about it in order to keep attempting to develop their economy. Ukraine lacks many capital resources, which is a major cause for their economic desperation. Nearly all of the resources that Ukraine sells are natural resources, such as coal, iron, and manganese. Ukraine has been producing steel and steel is one of the few capital resources that Ukraine can sell on a world-scale. As a result of its lack of capital resources, Ukraine does not carry much influence over the world market and is often found unappealing by foreign investors. Because of the fact that Ukraine’s economy thrives more off of agriculture than industry, the Ukrainian government hasn’t been doing much recently to increase its production of capital goods, further increasing the nation’s economic problems.

Ukraine is an LEDC because of a variety of reasons. Its economy has always been sub-par and has encountered numerous problems that detract from its monetary development throughout its history. It has endured two takeovers by the Soviet Union; it’s been conquered once by Nazi Germany, and has been conquered

by several incarnations of Hungarian and Russian empires. Its rank on the HDI is only one above Iran, a nation known for its lack of human rights. It is recovering now from the 2008 financial crisis. Unfortunately its infrastructure, human development, and capital resources haven’t nearly reached a point of development enabling Ukraine to make the jump to an MEDC.

REFERENCES:

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CIA - The World Factbook. (n.d.). Retrieved from Central Intelligence Agency

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Swiecicki, M. (2010, December 9). Business Sense: Lifting ban on farmland sales

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     http://www.infoplease.com/ipa/A0108070.html?pageno=2http://www.infoplease.com/      ipa/A0108070.html?pageno=2

Ukraine natural resources and minerals. (n.d.). Retrieved from      http://ukrainetrek.com/Ukraine_Natural_Resources.shtml