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UKRAINE


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
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)

Books on Ukraine




Update No: 325 - (28/01/08)

Russia and Ukraine diverge
Ukraine and Russia are going in opposite directions. They did so actually in the 1990s. Russia had a genuine revolution in 1991-93, scrapping the Soviet system, if not replacing it successfully with a viable alternative. Ukraine in those days cleaved to Soviet ways, especially under President Leonid Kuchma.

The new century saw a reversal of democratic fortunes in the two Slav giants. Russia took to Putinism, successful regression to Soviet ways in politics, combined with a reversion of the economy to an etatiste approach, the older apparatchiks replacing the oligarchs in the commanding heights. Ukraine had its Orange revolution in October 2004 and is on course for a Western development, putting Sovietism behind it. 

These expectations were thwarted in the subsequent three years as Ukraine descended into bitter political squabbling, culminating in a pre-term parliamentary vote last year. After weeks of jockeying, the election finally delivered a government led by Yulia Tymoshenko, the president’s sometime ally and sometime rival, as prime minister. Now, Mr Yushchenko says, Ukraine is again on course.

“The Ukrainian authorities for the first time are in a situation where the president, the prime minister and the speaker of the parliament are all openly proposing a pro-west path and Euro-Atlantic co-ordination,” Mr Yushchenko said in an interview with the Financial Times on January 25. “I believe that today the government is united.”

That was Mr Yushchenko’s ambition when he first came into office and, as the world briefly marvelled at the protesters in snowy Kiev, it seemed astonishing but just about credible. The president is using this consensus to push on several fronts. He has called on Western countries to support Kiev’s bid to join Nato’s membership action plan, a step towards accession, and hopes Ukraine will be admitted to the World Trade Organisation in February. After that, Mr Yushchenko wants to speed discussions with the EU about entering its associated free trade zone.

He does not disguise his ambition of eventual EU membership. In time, he believes, “Europe will find itself asking: why isn’t Ukraine a member?”

Kiev’s trump card is its democracy, which Mr Yushchenko believes has been bolstered rather than undermined by the recent domestic conflicts. “Over the past 2½ years we have demonstrated to the whole world that we are able to resolve any internal disputes, even those with polarised political views, in a democratic way.” 

Timoshenko to Russia
But Ukraine has to get on with Russia. Premier Timoshenko was due to go to Moscow on January 23, but took advantage of a Russian offer to delay the visit until late February, when she will be less pre-occupied by domestic matters, above all the formation of her new government.

It is clear what her priorities will be, energy and debt, so important in winter. As former head of the largest Ukrainian energy company, she is well versed in the issues. The Russians used to claim that she engaged in various commercial malpractices in those days and threatened prosecution if she stepped foot in Russia. This sort of talk has been quietly dropped. One doesn't charge a visiting prime minister, invited by the state, with criminal offences.

Not so easy at home
It is at home that Timoshenko faces close scrutiny for her past record in a way that no leading Russian politician would ever have to do. The media, once toothless, are now free to grill Ukraine's leaders on anything from their tax returns to Prime Minister Viktor Yanukovych's criminal record. He served time in jail as a young man for robbery and assault, but both convictions were later overturned.

Nothing, it seems, is off-limits. Yulia Tymoshenko, the glamorous Orange Revolution heroine, is asked at a news conference whether her rich blond hair, braided peasant-style, is real. It is, she insists.

President Yushchenko is asked on live television about failures to deliver on Orange Revolution promises. Tymoshenko is grilled on allegations of corruption in her party. Yanukovych is given to barnyard epithets that add a certain earthiness to the campaign trail.

Multi-coloured protest tents pop up regularly in central Kiev, sometimes right in front of the presidential administration building — something that would be unthinkable in Moscow, where such protests tend to be broken up before anybody notices them. Such things have to be funded and it is an intersting exercise to see which group of businessmen (capable of funding such things), stand to benefit from whatever is being protested/supported. Ukrainians rally against anything from foreign policy to city construction plans. And nobody seems to mind.

Timoshenko Gets Credit for Soviet Debt
Timoshenko is showing here financial astuteness at home by redeeming Soviet-era debt. Payments against the debt of the Savings Bank (Sberbank) of the USSR are continuing today in Ukraine. The first day of payments was marked by a rush on the state Oschadbank, resulting in the death of one pensioner while standing in line and the trampling of another. Distribution of funds for the payments and preparations at individual bank branches have been uneven, resulting in the dismissal of 35 bank managers and reprimands for 52 others. 

International agencies are warning, however, that the payments are likely to speed up the inflation rate in the country. 

The repayment of the Soviet bank's debt is one of Yulia Timoshenko's campaign promises from the 2007 parliamentary elections. The parliament approved a draft budget for the year that allowed for up to 2000 hryvna, that is, about $400, in compensation per depositor, but that sum was cut in half in the final version of the budget signed by the president. In all, 20 billion hryvna, or about $4 billion, has been budgeted for that purpose. The actual debt of the bank is 123 billion hryvna ($24.6 billion). The debt is being paid at a coefficient of 1.05 hryvna per Soviet ruble and no more than 1000 hryvna is being paid to any one person. 

Prelude to a future presidential bid; abolition of the draft
There is no love lost between Yushchenko and Timoshenko. She has made it abundantly clear that she thinks that she should be the next president.

The Yulia Timoshenko Bloc has also promised to cancel the military draft, but that reform is moving more slowly. Timoshenko is claiming the credit for this popular move, causing annoyance to her opponent, Party of the Regions leader Viktor Yanukovich, and to her ally, Yushchenko. 

“Its already a presidential campaign in its approach,” commented head of the Kiev Institute of Global Problems Vadim Karasev. “It's a wonder the others [Timoshenko's political competition] didn't think of it first.”

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