The Economy


Economy of Ukraine

The economy of Ukraine can be classified as a developed economy, given its overall level of industrial and agricultural output. However, the economy of the country suffered because of various weaknesses deriving from the overcentralized command economy during the Soviet period.

Ukraine’s economy - the past

Large and inefficient state-owned factories, enterprises and collective farms wasted resources and emphasized quantity over quality. Prices were arbitrarily set, and consumer goods were often in short supply.
Excessive spending on the military hurt the civilian economy, while technological development lagged in the civilian sphere.

The market economy in Ukraine

Present Ukraine has market economy, where the forces of supply and demand and private ownership guide the allocation of resources. The transition to market economy was politically and socially difficult because Ukrainians had to endure rising inflation, unemployment, and economic uncertainty.
In addition, Ukraine redefined its economic relations with Russia and other former Soviet republics. As a way of safeguarding its political independence and limiting its economic vulnerability, Ukraine has its own national currency, called the hryvnia, from 1992. The economic reforms also cut military production and converted military factories and technologies to benefit the civilian economy and the populace.

Agriculture

Historically, Ukraine is well known for its agricultural production. Among its main agricultural products are sugar beets, wheat, meat, and dairy products. Other crops include barley, corn, rye, and tobacco.
Most Ukrainian farms are very large state-owned farms of more than 8,000 acres (3,000 ha). Smaller private plots have historically been the most productive throughout the former Soviet Union, and their importance should grow in the future.

Natural resources

Ukrainian mineral resources played an important role in supporting the industrial development of the country. During the 1980s, nuclear power became a significant source of electrical power, accounting for about 25% of Ukraine’s electricity.
The accident at Chernobyl nuclear power station in 1986, however, created strong opposition to nuclear power, and efforts are now being made to phase out reliance on nuclear energy.

Ukrainian industries

Ukrainian major industries are metalworks, machine building, construction, chemicals, food, and light industry. Ukraine is a major producer of steel and iron. It accounted for 33% of Soviet steel and iron production.
About one-third of its industrial manufacturing comes from machine-building sector, which produces tractors, machine tools, and mining equipment.
Transportation vehicles manufactured by Ukrainian economy include cars, trucks, buses, railway cars, diesel locomotives, airplanes, and ships.
The chief output of Ukrainian chemical industry is fertilizer, while Ukrainian food industry is involved with sugar refining, meat packaging, food canning, and wine production. Among consumer goods produced are television sets, refrigerators, washing machines, and clothes.

Transportation system

Overall, Ukraine has a well-developed and diverse transportation system. Ukrainian railroad network is extensive and links major cities with industrial enterprises. Waterways, such as the Dnepr River, the Black Sea and the Azov Sea, their port cities, play an important role in shipping.
Ukrainian highway system comprises about 147,000 kilometers (91,000 miles) of paved roads. There are subway systems in Kiev and Kharkov. The major airports are located near Kiev (at Boryspil), Kharkov and Odessa.

Export and Import

Ukrainian major exports include grain, sugar beets, coal, construction equipment, and select manufactured goods.
The primary import items are oil, natural gas, wood products, rubber, and consumer goods.
Among the major trading partners are Russia, Poland, the US, Hungary, Germany, France. Ukraine is seeking to reduce its economic ties with Russia.

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