Ukraine

 
Franchise association:
Kryvonos Andrii
Т +380 (44) 592.8615
M+380 (67) 466.8649
E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Klinichna str. 23-25, of. 60,
Kyiv, 03110, Ukraine
www.franchising.org.ua

Background:
Ukraine was the center of the first eastern Slavic state, Kyivan Rus, which during the 10th and 11th centuries was the largest and most powerful state in Europe. Weakened by internecine quarrels and Mongol invasions, Kyivan Rus was incorporated into the Grand Duchy of Lithuania and eventually into the Polish-Lithuanian Commonwealth. The cultural and religious legacy of Kyivan Rus laid the foundation for Ukrainian nationalism through subsequent centuries. A new Ukrainian state, the Cossack Hetmanate, was established during the mid-17th century after an uprising against the Poles. Despite continuous Muscovite pressure, the Hetmanate managed to remain autonomous for well over 100 years. During the latter part of the 18th century, most Ukrainian ethnographic territory was absorbed by the Russian Empire. Following the collapse of czarist Russia in 1917, Ukraine was able to bring about a short-lived period of independence (1917-20), but was reconquered and forced to endure a brutal Soviet rule that engineered two artificial famines (1921-22 and 1932-33) in which over 8 million died. In World War II, German and Soviet armies were responsible for some 7 to 8 million more deaths. Although final independence for Ukraine was achieved in 1991 with the dissolution of the USSR, democracy remained elusive as the legacy of state control and endemic corruption stalled efforts at economic reform, privatization, and civil liberties. A peaceful mass protest "Orange Revolution" in the closing months of 2004 forced the authorities to overturn a rigged presidential election and to allow a new internationally monitored vote that swept into power a reformist slate under Viktor YUSHCHENKO. Subsequent internal squabbles in the YUSHCHENKO camp allowed his rival Viktor YANUKOVYCH to stage a comeback in parliamentary elections and become prime minister in August of 2006. An early legislative election, brought on by a political crisis in the spring of 2007, saw Yuliya TYMOSHENKO, as head of an "Orange" coalition, installed as a new prime minister in December 2007.

Geography
Area: 233,000 sq. mi., the largest country wholly in Europe.
Cities: Capital--Kyiv (also transliterated as Kiev, pop. 2.8 million). Other cities--Kharkiv, Dnipropetrovsk, Donetsk, Odesa, Lviv.
Terrain: A vast plain mostly bounded by the Carpathian mountains in the southwest and by the Black Sea and the Sea of Azov in the South.
Climate: Continental temperate, except in southern Crimea, which has a sub-tropical climate.

People
Population (est.): 46.3 million.
Nationality: Noun--Ukrainian(s); adjective--Ukrainian.
Ethnic groups: Ukrainians, Russians, Belarusians, Moldovans, Hungarians, Bulgarians, Jews, Poles, Crimean Tatars, and other groups.
Religions: Ukrainian Orthodoxy, Ukrainian Greek Catholicism, Judaism, Roman Catholicism, Islam, others.
Languages: Ukrainian (official), Russian, others.
Education: Literacy--99.7%.
Health: Infant mortality rate--9.9/1,000; life expectancy--64.71 yrs. males, 75.59 yrs. females.
Work force: 22.3 million. Industry and construction--32%; agriculture and forestry--24%; health, education, and culture--17%; transport and communication--7%.

Economy
Purchasing power parity GDP (2007 est.): $321.3 billion.
Nominal GDP (2007 est.): $90.1 billion.
Annual growth rate (2007 govt. est.): 6.9%.
PPP per capita GDP (2007 est.): $6,900.
Nominal per capita GDP (2006 est.): $1,746.
Natural resources: Vast fertile lands, coal, ironstone, complex ore, various large mineral deposits, timber.
Agriculture: Products--Grain, sugar, sunflower seeds.
Industry: Types--Ferrous metals and products, oil and gas transport, coke, fertilizer, airplanes, turbines, metallurgical equipment, diesel locomotives, tractors.
Trade (2006): Exports of goods and services--$46.68 billion: Ferrous and nonferrous metals, mineral products, chemicals, energy transport services, machinery, transport equipment, grain, and textiles. Imports--$54.3 billion: Energy, mineral fuel and oil, machinery and parts, transportation equipment, chemicals, textiles, and paper.
After Russia, the Ukrainian republic was far and away the most important economic component of the former Soviet Union, producing about four times the output of the next-ranking republic. Its fertile black soil generated more than one-fourth of Soviet agricultural output, and its farms provided substantial quantities of meat, milk, grain, and vegetables to other republics. Likewise, its diversified heavy industry supplied the unique equipment (for example, large diameter pipes) and raw materials to industrial and mining sites (vertical drilling apparatus) in other regions of the former USSR. Shortly after independence was ratified in December 1991, the Ukrainian Government liberalized most prices and erected a legal framework for privatization, but widespread resistance to reform within the government and the legislature soon stalled reform efforts and led to some backtracking. Output by 1999 had fallen to less than 40% of the 1991 level. Ukraine's dependence on Russia for energy supplies and the lack of significant structural reform have made the Ukrainian economy vulnerable to external shocks. Ukraine depends on imports to meet about three-fourths of its annual oil and natural gas requirements. A dispute with Russia over pricing in late 2005 and early 2006 led to a temporary gas cut-off; Ukraine concluded a deal with Russia in January 2006 that almost doubled the price Ukraine pays for Russian gas. Outside institutions - particularly the IMF - have encouraged Ukraine to quicken the pace and scope of reforms. Ukrainian Government officials eliminated most tax and customs privileges in a March 2005 budget law, bringing more economic activity out of Ukraine's large shadow economy, but more improvements are needed, including fighting corruption, developing capital markets, and improving the legislative framework. Ukraine's economy was buoyant despite political turmoil between the prime minister and president until mid-2008. Real GDP growth reached roughly 7% in 2006-07, fueled by high global prices for steel - Ukraine's top export - and by strong domestic consumption, spurred by rising pensions and wages. The drop in steel prices and Ukraine's exposure to the global financial crisis due to aggressive foreign borrowing has lowered growth in 2008 and the economy probably will contract in 2009. Ukraine reached an agreement with the IMF for a $16.5 billion standby arrangement in November 2008 to deal with the economic crisis. However, political turmoil in Ukraine as well as deteriorating external conditions are likely to hamper efforts for economic recovery.