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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 49,537 41,380 37,600 55
GNI per capita
 US $ 970 770 720 137
Ranking is given out of 208 nations - (data from the World Bank)

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Area ( 


ethnic groups 
Ukrainians 72.7%
Russians 22.1%
Jews 0.9%. 



Viktor Yushchenko

Update No: 292 - (26/04/05)

Ukraine has suddenly become an incredibly important country. Actually it always was; but the world did not know it.
It consists of the marches to Russia, the European outskirts of the largest country on Earth.
It has just had a bloodless revolution, as a result of which it is going to join the West, not remain sequestered to the East.

Visit to the US 
On a trip to Washington the new Ukrainian president, Viktor Yushchenko, had talks with President George W Bush; and he met Vice President Dick Cheney, Secretary of State Condoleezza Rice and Defence Secretary Donald Rumsfeld. 
He addressed both houses of Congress, an honour hitherto reserved for only America's closest allies. In that Viktor Yushchenko joins a small but revered group that includes British Prime Minister Tony Blair and Afghanistan President Hamid Karzai. 
So why all the fuss for a leader of a former Soviet Republic? 

Yushchenko's warm US welcome 
Yushchenko and his rise to power - in the bloodless "Orange Revolution" - symbolises the hopes of President Bush's foreign policy agenda. He is the living example - often cited by Mr Bush - of the world's desire for democracy.. 
Or in the president's own words when he welcomed Viktor Yushchenko to the White House: "You are an inspiration to all who love example of democracy for people around the world." 

But there is a price
The Kremlin were incredibly miffed at backing the wrong horse in Ukraine, that is Yushchenko's opponent Yakushenko, a stooge of his boss, the former president Kuchma, himself a stooge of Moscow. They have gone ahead with gusto with the idea of cutting Ukraine out of the lucrative trade in transiting natural gas between Russia and the West.
There is now to be a gas pipeline, by-passing both Belarus and Ukraine, going from Vyborg directly to Germany along the floor of the Baltic sea. Gazprom and Ruhrgas have concluded the deal. There is a price for freedom!

Timoshenko another star
The person who made much of the running in the campaign was Julia Timoshenko, now premier, due to Yushchenko having to recover from being poisoned on September 9th. She is a former oligarch, her name synonymous with much that was outrageous in the early years of Ukraine's independence although she says that the money claimed to have been more than a $1billion has gone on legal bills, (but it was not previously known that there were such expensive lawyers in Ukraine). 
The Russians tried to smear her as having bribed Russian energy officials in the 1990s when she headed the state gas firm of Ukraine. Indeed they issued a warrant for her arrest, but Russia the justice system is known to be merely the handmaiden of the politicians, so that in itself means little. 
These charges are pragmatically being dropped, now that she is in harness. She is going to Moscow shortly to mend fences. She is clearly an able and a feisty woman exemplified in that she is a fiery speaker. There were rumours in late April that she was going to be dismissed, but she indignantly denied them as "provocations."
She would appear to have the confidence of the president. They in fact make a good team, he being the darling of the West (moreover he has an American Ukrainian wife), while she knows the ropes when it comes to dealing with the Russians, both those in Ukraine and Russia! He is a successful technocrat who kick-started economic recovery in his stint as premier at the beginning of the decade; she is the hands-on operator to provide management skills. Ukraine needs them both.
Secretary Condaleezza Rice, following her Moscow meetings had discussions with Yushchenko about a serious bid for Ukraine to join NATO which from being an outside possibility previously now looks much more likely. The reasons are not of course military, the raison d'etre of NATO, but political. It is accepted that the US seeks to give sustenance to the new regime in Ukraine and to Yushchenko who would dearly like to be in membership of the European Union. However such an admission is many years away, for many reasons, not least that Turkey's application was already received ahead of Ukraine and the EU is anyway currently having sizable problems of its own over it's constitution, which puts back all expansion plans. 
But above all, EU membership is not in the gift of the US, whilst NATO membership effectively is. Russia at first sight seems to be unexcited about this, NATO no longer being projected towards any Russian threat, but that reaction is probably about form. If only for morale's sake, Moscow is probably seething about it.
The really big challenge faced by the new government is the immensely powerful group of oligarchs who under the tutelage of the former president had an arm-lock on the Ukrainian economy. Already Timoshenko has taken the fight to them in several hard hitting taxation changes designed to limit cross border smuggling; and provocatively removing from office and arresting the regional governor of the Donetsk, a close colleague of the nest of oligarchs that thrive in that region.
The Ukraine story has a long way yet to go.



Ukraine, Europe boost space ties

Ukraine's National Space Agency and the European Space Agency (ESA) decided recently to set up joint working groups to coordinate the development of new space vehicles, the head of Ukraine's Pivdenne design bureau, Stanislav Konyukhov, stated, Interfax News Agency has reproted.
The planned vehicles include launch vehicles, Konyukhov said.
Ukraine is currently seeking associate membership of the ESA. It is also preparing to sign an agreement with the European Union on cooperation under the Global Navigation Satellite System project, he said.
A joint seminar that will be held soon will hammer out specific proposals for broader Ukraine-ESA cooperation, Konyukhov said. 
Pivdenne, also known as Yuzhnoye, is the only Eastern European company represented in the European Space Incubators Network (ESINET).



Ukraine to cut Russian coke imports 14% in 2005

Ukraine will reduce its imports of coking coal from Russia by 13.58% this year, the company Ukrenergycoal Enterprises Ltd said at the Coal Transport Russia 2005 conference that opened in St Petersburg recently, New Europe reported.
"In 2005, imports of coking coal from Russia will not exceed seven million tonnes in light of higher coal prices, higher transportation tariffs and ordinary-grade coal because of the launch of additional production capacity for enrich coal in Russia," the group said. Ukraine imported 8.1m tonnes of coking coal from Russia in 2004.

LUKoil to invest US$500m in Ukraine by 2011

Russian oil company, LUKoil, plans to invest about US$500m in Ukraine by 2011, LUKoil President, Vagit Alekperov, announced after holding talks with Ukrainian President, Viktor Yushchenko, recently, New Europe reported.
"Of these resources, US$150m will be spent on completing the development of gas filling complexes, US$170m on upgrading the Kalush oil refinery (Lukor) and about US$330m will go to the Odessa oil refinery," Alekperov said.
He said LUKoil plans to increase the number of its gas stations in Ukraine to 210 in 2005 and ultimately bring this figure to 350. Alekperov also said LUKoil is to build a new plant in Ukraine to produce lubricating oil. He said that LUKoil investment in the new plant, which will include a packaging line, would amount to about US$20m. "The company has decided to build a new oil plant near Kiev, in the Borispol region, where we already have infrastructure. I hope that the plant designs will be finished in the summer and that we will start investing," Alikperov said.
He also said that LUKoil rejected the idea of acquiring a stake in OAO Azov Oil and Lubricants (Azmol).



Yushchenko vows cooperation with Russian businesses

Ukrainian President, Viktor Yushchenko, recently said, Ukraine wants to draw Russian businesses to the country's economy and is prepared to create equally favourable conditions for Ukrainian, Russian and other foreign investors.
"In fact, Yushchenko has given his go-ahead for Russian-Ukrainian trade and economic cooperation and promised to create even more favourable conditions than in Russia," Vneshtorgbank President and CEO, Andrei Kostin, said following Yushchenko's meeting with about 20 leading Russian businessmen in Kiev.
Kostin quoted Yushchenko as saying that the Ukrainian state authority is transparent and that the state will provide guarantees of ownership rights in Ukraine. "Yushchenko has vowed not to launch a massive review of the privatisation results, saying that the list of privatised properties that that need to be examined is not long," Kostin said.
Yushchenko put special emphasis on the strategic significance of Ukrainian-Russian relations, saying, "the Western sector is strongly linked to Ukraine's relations with Russia and vice versa," said Vnesheconombank chairman, Vladimir Dmitriyev.
The talks have cleared a number of queries concerning the review of the privatisation results and the future of Russian capital in Ukraine. "Most of the participants left the negotiating table feeling more confident and comfortable," said Dmitriyev. Russian bankers backed Yushchenko's proposal to add representatives of Russian companies to the Foreign Investments Council which is currently being revived in Ukraine.



Deutsche Bank to lend Naftogaz 2bn Euro

Deutsche Bank has pledged to open a 2bn Euro credit line for Ukrainian national oil and gas company, Naftogaz Ukrainy, under a five-year framework agreement that may be extended, it was reported recently. Deutsche Bank demanded no collateral for the loan, Naftogaz Ukrainy chief executive, Olexy Ivchenko, told the Ukrainian weekly, Zerkalo Nedeli.
Various currencies will be used - each tranche will come in whatever currency is most economical for Ukraine. "Naftogaz Ukrainy has the complete priority as regards the choice of projects for which the loan will be used," Ivchenko said. The first tranche of about US$350m "will be spent on the optimisation of technological processes, the modernisation of oil and gas production. We want to work on increasing our own production of hydrocarbons. This is the first target. The next is to modernise the gas transmission system," Ivchenko said. He also said Deutsche Bank, which closed down its office in Ukraine earlier, would reopen a new office in the country in May.

EBRD pledges to double loans for Ukraine in 2005

The European Bank for Reconstruction and Development [EBRD] thinks that the Ukrainian government's actions are resolute and consistent, while its policy is clear-cut and transparent. The EBRD promised to double the amount of loans for the economy this year. The EBRD and domestic banks will agree on a list of projects by May. The most attractive projects include energy, banking and transport sectors, UT1, Kiev reported. 
Financiers are interested in taking part in upgrading the rolling stock of the Ukrainian railways. Europeans are also willing to invest in the development of leasing and retail chains, as they think the investment climate has improved in Ukraine.
Jean Lemierre, EBRD president, met with investors, who are currently interested in investing their money into Ukraine, as they see true progress, and also improved business and legal environment. He said "we also view this as significant progress, which we would like to support."



Copper imports up 34% in January-February

Ukrainian enterprises increased copper and copper-product imports 34.4% in value year-on-year to US$15.93m in January-February 2005. The state customs service said that February copper imports were US$7.65m and that copper imports increased 50.5% to US$96.56m in 2004 as a whole, New Europe reported.
Ukraine's copper and copper-product exports dropped 79% to US$21.28m in January-February (US$10.67m in February). Copper exports in 2004 contracted 10.8% to US$197.97m.
Ukraine cut its nickel and nickel-product imports 5.8% to US$9.08m (US$5.19m in February) and tin and tin-product imports 23.3% to US$693,000 (US$648,000). However zinc and zinc-product imports were up 27% to US$5.14m (US$2.59m in February), lead and lead-product imports grew 53.7% to US$887,000 (US$449,000m in February) and aluminium and aluminium-product imports jumped 48.9% to US$25.16m (US$14.7m in February).
Aluminium and aluminium-product exports decreased 26.4% to US$44.62m in the two months, exports of lead and lead products were down 6.1% to US$1.26m and nickel and nickel-product exports fell 53.6% to US$326,000.



MTS looks to invest US$500m in UMC in 2005

Russia's biggest cellular operator Mobile TeleSystems (MTS) intends to invest US$500m in Ukrainian Mobile Communications (UMC), New Europe has reported.
MTS has already invested roughly that amount in UMC so far, MTS President, Vasily Sidorov, said during a "Ukraine-Russia. Prospects for Bilateral Economic Relations. New Investment Opportunities and Risks" roundtable. "For the two years in which MTS has been the main or sole owner of UMC, we have invested more money than the previous owners had over the preceding seven years," Sidorov said. MTS acquired the controlling stock interest in UMC in early 2003, and bought up the remaining stock in the middle of that year. UMC has roughly eight million subscribers. Sidorov said that the investment monies would go to developing new services and new projects, including the creation of infrastructure for international communications services. The bulk of the money to be invested is to come out of MTS's own coffers, Sidorov said. There are no plans to issue UMC bonds this year, he added.





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