Economy of Ukraine
Encyclopedia
The economy of Ukraine is an emerging
free market
, with a gross domestic product
that fell sharply for the first 10 years of its independence from the Soviet Union
and then experienced rapid growth from 2000 until 2008. Formerly a major component of the economy of the Soviet Union
, the country's economy experienced a deep recession during the 1990s, including hyperinflation
and a drastic fall in economic output. In 1999, at the lowest point of the economic crisis, Ukraine
's per capita GDP was about half of the per capita GDP it achieved before independence. GDP growth was first registered in 2000, and continued for eight years. In 2007 the economy continued to grow and posted real GDP growth of 7%. In 2008, Ukraine's economy was ranked 45th in the world according to 2008 GDP (nominal) with the total nominal GDP of 188 billion USD, and nominal per capita GDP of 3,900 USD.
However Ukraine was greatly affected
by the economic crisis of 2008 and as a result a 15.1% decrease in Ukraine's GDP took place over 2008 and 2009. Inflation slowed in July 2009 and stayed at about 8% since. The Ukrainian currency, which had been pegged at a rate of 5:1 to the U.S. dollar, was devalued to 8:1, and was stabilized at that ratio.
There was 3% unemployment at the end of 2008; over the first 9 months of 2009, unemployment averaged 9.4%. The final official unemployment rates over 2009 and 2010 where 8.8% and 8,4%. Although according to the CIA World Factbook in Ukraine there are "large number of unregistered or underemployed workers".
The Ukrainian economy recovered in the first quarter of 2010. Ukraine's real GDP growth in 2010 was 4.3%, leading to per capita PPP GDP of 6,700 USD. The resumed growth has been helped by growth in neighbouring Russia
, which is by far the country's largest trading partner and export market.
Ukraine is subdivided into nine (9) economical regions: Carpathian, Northwestern, Podillya, Capital, Central-Ukrainian, Northeastern, Black-Sea-Coastal, Trans-Dnieper, and Donetsk. Those regions were redrawn from the three (3) Soviet economical regions of the Ukrainian SSR
: Donetsk-TransDnieper, Southwestern, and Southern.
In 1910, Ukraine's GDP was estimated at 7 per cent of USA (about the same size as the Netherlands
). By 2010, Ukraine's GDP had shrunk to 1 per cent of USA. The nation has many of the components of a major Europe
an economy - rich farmlands, a well-developed industrial base, highly trained labour, and a good education system. At present, however, the economy remains in poor condition.
While Ukraine registered positive economic growth
beginning in 2000, this came on the heels of eight straight years of sharp economic decline. As a result, the standard of living for most citizens has declined more than 50% since the early 1990s, leading to a relatively high poverty rate. The macroeconomy is stable, and the hyperinflation
of the 1990s has subsided. Ukraine's currency, the hryvnia, was introduced in September 1996. The economy has continued to grow thanks to exports since 2000, although at uneven speed and being highly affected (circa -15% GDP growth) by the late-2000s recession and the 2008–2009 Ukrainian financial crisis
. In general, growth has been undergirded by strong domestic demand, low inflation, and solid consumer and investor confidence.
2001 9.2%
2002 5.2%
2003 9.6%
2004 12.1%
2005 2.7%
2006 7.3%
2007 7.9%
2008 2.1%
2009 -14.8%
2010 4.2%
2011 4.5% (estimated)
, particularly in mineral deposits. Although oil
and natural gas
reserves in the country are largely exhausted, it has other important energy sources, such as coal
, hydroelectricity
and nuclear fuel
raw materials.
oil, a major global producer of grain
and sugar
, and future global player on meat
and dairy
markets. It is also one of the largest producers of nuts. Ukraine also produces more natural honey
than any other European country. Because Ukraine possesses 30% of the world's richest black soil, its agricultural industry has a huge potential. However, farmland remains the only major asset in Ukraine that is not privatized, hampering access to international investments and best farming technology. The agricultural industry in Ukraine is already highly profitable, with 40-60% profits, but according to analysts its outputs could still rise up to fourfold.
, steel
and pipes. Among its economy leading comapnies in that field are Metinvest
, Kryvorizhstal
, AzovStal, Ilyich Steel & Iron Works, and others. As of 2010, Ukraine was the world's eighth largest steel producer
(according to World Steel Association). Another important branch is the country's chemical industry
which includes the production of coke
, mineral fertilizer
s and sulfuric acid
. Manufactured goods include metallurgical equipment, diesel locomotive
s, tractor
s, and automobile
s. The country possesses a massive high-tech industrial base, including much of the former USSR
's electronics, arms industry
and space program. However, these fields are state-owned and economically underdeveloped.
exporters in the world. The signing of recent large contracts may put Ukraine into 6th place among biggest arms traders, after the United States
, Russian Federation, France
, Germany
and Israel
. The output of Ukrainian defense plants grew 58% in 2009, with largest growth reported by aircraft builders (77%) and ship builders (71%).
. Instead, Ukraine is transporting Russian gas to the EU through its well-developed gas pipelines system, being Europe's vitally important connection. The country's dependence on Russian gas supplies dramatically affects its economics and foreign policy, especially after the recent major gas dispute
.
However, Ukraine is independent in its electricity supply, moreover, exporting it to Russia and other countries of Eastern Europe. This is achieved through a wide use of nuclear power
and hydroelectricity
. The recent energy strategy intends gradual decreasing of gas- and oil-based generation in favor of nuclear power, as well as energy saving measures, shortening of industrial gas consumption. Reform of the still inefficient and opaque energy sector is a major objective of the International Monetary Fund
(IMF) and World Bank
programs with Ukraine.
Ukraine is a partner country of the EU INOGATE
energy programme, which has four key topics: enhancing energy security
,
Emerging markets
Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. Based on data from 2006, there are around 28 emerging markets in the world . The economies of China and India are considered to be the largest...
free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
, with a gross domestic product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
that fell sharply for the first 10 years of its independence from the Soviet Union
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
and then experienced rapid growth from 2000 until 2008. Formerly a major component of the economy of the Soviet Union
Economy of the Soviet Union
The economy of the Union of Soviet Socialist Republics was based on a system of state ownership of the means of production, collective farming, industrial manufacturing and centralized administrative planning...
, the country's economy experienced a deep recession during the 1990s, including hyperinflation
Hyperinflation
In economics, hyperinflation is inflation that is very high or out of control. While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases...
and a drastic fall in economic output. In 1999, at the lowest point of the economic crisis, Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
's per capita GDP was about half of the per capita GDP it achieved before independence. GDP growth was first registered in 2000, and continued for eight years. In 2007 the economy continued to grow and posted real GDP growth of 7%. In 2008, Ukraine's economy was ranked 45th in the world according to 2008 GDP (nominal) with the total nominal GDP of 188 billion USD, and nominal per capita GDP of 3,900 USD.
However Ukraine was greatly affected
2008–2009 Ukrainian financial crisis
Ukraine was hit heavily by the late-2000s recession, the World Bank expects Ukraine's economy to shrink 15% in 2009 with inflation being 16.4%....
by the economic crisis of 2008 and as a result a 15.1% decrease in Ukraine's GDP took place over 2008 and 2009. Inflation slowed in July 2009 and stayed at about 8% since. The Ukrainian currency, which had been pegged at a rate of 5:1 to the U.S. dollar, was devalued to 8:1, and was stabilized at that ratio.
There was 3% unemployment at the end of 2008; over the first 9 months of 2009, unemployment averaged 9.4%. The final official unemployment rates over 2009 and 2010 where 8.8% and 8,4%. Although according to the CIA World Factbook in Ukraine there are "large number of unregistered or underemployed workers".
The Ukrainian economy recovered in the first quarter of 2010. Ukraine's real GDP growth in 2010 was 4.3%, leading to per capita PPP GDP of 6,700 USD. The resumed growth has been helped by growth in neighbouring Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, which is by far the country's largest trading partner and export market.
Overview
List of major companies, not considering banks and isurance companies| Rank in 2008 |
Name of concern |
Location of headquarters |
Revenue (Mln. UAH) |
Profit (Mln. UAH) |
Employees |
|---|---|---|---|---|---|
| 1. | Naftogaz Ukrainy | Kiev Kiev Kiev or Kyiv is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300. However, higher numbers have been cited in the press.... |
61,968.5 | 11,670.3 | 682 |
| 2. | EnergoRynok | Kiev Kiev Kiev or Kyiv is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300. However, higher numbers have been cited in the press.... |
40,527.2 | 183.4 | 26 |
| 3. | Gaz of Ukraine (subsidiary of Naftogaz Ukrainy) | Kiev Kiev Kiev or Kyiv is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300. However, higher numbers have been cited in the press.... |
31,179.0 | 128.3 | 171,500 |
| 4. | Metinvest Metinvest Metinvest is an international and vertically integrated mining and steel corporation. It was established on 6th June 2006 by the SCM Group. In 2007 Metinvest Ukraine LLC and Metinvest Service Metal Centres LLC were established to function as subsidiaries engaged in production and supply of... |
Donetsk Donetsk Donetsk , is a large city in eastern Ukraine on the Kalmius river. Administratively, it is a center of Donetsk Oblast, while historically, it is the unofficial capital and largest city of the economic and cultural Donets Basin region... |
30,185.2 | 1,410.6 | 408 |
| 5. | Kryvorizhstal Kryvorizhstal Kryvorizhstal is Ukraine's largest integrated steel company located in the Ukrainian city of Kryvyi Rih.Bought in 2005 by Mittal Steel, the company is one of the most important businesses in Ukraine and a globally important steel producer. It is the largest steel manufacturer in Ukraine and... |
Kryvyi Rih Kryvyi Rih Kryvyi Rih or Krivoy Rog is a city in central Ukraine. It is situated in Dnipropetrovsk Oblast, to the southwest of the oblast's administrative center, Dnipropetrovsk, at the confluence of the Inhulets and Saksahan rivers... |
22,102.9 | 4,676.5 | 42,094 |
| 6. | Ilyich Steel & Iron Works | Mariupol Mariupol Mariupol , formerly known as Zhdanov , is a port city in southeastern Ukraine. It is located on the coast of the Azov Sea, at the mouth of the Kalmius River. Mariupol is the largest city in Priazovye - a geographical region around Azov Sea, divided by Russia and Ukraine - and is also a popular sea... |
21,727.1 | 1,362.1 | 54,945 |
| 7. | Azovstal Steel Works | Mariupol Mariupol Mariupol , formerly known as Zhdanov , is a port city in southeastern Ukraine. It is located on the coast of the Azov Sea, at the mouth of the Kalmius River. Mariupol is the largest city in Priazovye - a geographical region around Azov Sea, divided by Russia and Ukraine - and is also a popular sea... |
21,235.3 | 1,959.1 | 20,518 |
| 8. | Alchevsk Steel & Iron Works | Alchevsk Alchevsk Alchevsk is a town in the Luhansk Oblast of eastern Ukraine. It is separate administrative unit, and is located approximately 45 km from the oblast capital, Luhansk, and right next to the district capital of Perevalsk.... |
15,322.1 | −350.4 | 17,900 |
| 9. | TNK-BP Kommers TNK-BP TNK-BP is a major vertically integrated Russian oil company. It is Russia's third largest oil producer and among the ten largest private oil companies in the world. TNK-BP is Russia's third largest oil company in terms of reserves and crude oil production... |
Kiev Kiev Kiev or Kyiv is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300. However, higher numbers have been cited in the press.... |
14,816.9 | −484.0 | 427 |
| 10. | Lysychansk Petroleum Investment TNK-BP TNK-BP is a major vertically integrated Russian oil company. It is Russia's third largest oil producer and among the ten largest private oil companies in the world. TNK-BP is Russia's third largest oil company in terms of reserves and crude oil production... |
Lysychansk Lysychansk Lysychans'k is a city in the Luhansk Oblast of south-eastern Ukraine. The city is designated as its own separate raion within the oblast, and is located on the high right bank of the Seversky Donets River, approximately 90 km from the oblast capital, Luhansk.Population of 01.05.2010-... |
14,485.7 | −794.1 | 3,743 |
| 11. | DTEK (Donbass Energy) | Kiev Kiev Kiev or Kyiv is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300. However, higher numbers have been cited in the press.... |
12,968.7 | 1,985.0 | 290 |
| 12. | Donetskstal Metallurgy | Donetsk Donetsk Donetsk , is a large city in eastern Ukraine on the Kalmius river. Administratively, it is a center of Donetsk Oblast, while historically, it is the unofficial capital and largest city of the economic and cultural Donets Basin region... |
12,911.5 | −360.1 | 10,966 |
| 13. | Kyivstar Kyivstar Kyivstar is the largest mobile phone operator in Ukraine, serving 24,944,592 subscribers as of October 2010. Kyivstar's wireless network operates using the GSM standard and provides coverage accessible by approximately 99% of the Ukrainian population.... |
Kiev Kiev Kiev or Kyiv is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300. However, higher numbers have been cited in the press.... |
12,799.3 | 5,559.2 | 4,905 |
| 14. | ZAZ Automobile ZAZ ZAZ or Zaporizhia Automobile Building Plant is the main automobile-manufacturer of Ukraine, based in the south-eastern city of Zaporizhia. It is also known for its former mother company name, AvtoZAZ... |
Zaporizhia Zaporizhia Zaporizhia or Zaporozhye [formerly Alexandrovsk ] is a city in southeastern Ukraine, situated on the banks of the Dnieper River. It is the administrative center of the Zaporizhia Oblast... |
12,753.5 | −390.6 | 14,943 |
| 15. | Donbass Industrial Union | Donetsk Donetsk Donetsk , is a large city in eastern Ukraine on the Kalmius river. Administratively, it is a center of Donetsk Oblast, while historically, it is the unofficial capital and largest city of the economic and cultural Donets Basin region... |
12,583.5 | 511.9 | 519 |
Ukraine is subdivided into nine (9) economical regions: Carpathian, Northwestern, Podillya, Capital, Central-Ukrainian, Northeastern, Black-Sea-Coastal, Trans-Dnieper, and Donetsk. Those regions were redrawn from the three (3) Soviet economical regions of the Ukrainian SSR
Ukrainian SSR
The Ukrainian Soviet Socialist Republic or in short, the Ukrainian SSR was a sovereign Soviet Socialist state and one of the fifteen constituent republics of the Soviet Union lasting from its inception in 1922 to the breakup in 1991...
: Donetsk-TransDnieper, Southwestern, and Southern.
In 1910, Ukraine's GDP was estimated at 7 per cent of USA (about the same size as the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
). By 2010, Ukraine's GDP had shrunk to 1 per cent of USA. The nation has many of the components of a major Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
an economy - rich farmlands, a well-developed industrial base, highly trained labour, and a good education system. At present, however, the economy remains in poor condition.
While Ukraine registered positive economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
beginning in 2000, this came on the heels of eight straight years of sharp economic decline. As a result, the standard of living for most citizens has declined more than 50% since the early 1990s, leading to a relatively high poverty rate. The macroeconomy is stable, and the hyperinflation
Hyperinflation
In economics, hyperinflation is inflation that is very high or out of control. While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases...
of the 1990s has subsided. Ukraine's currency, the hryvnia, was introduced in September 1996. The economy has continued to grow thanks to exports since 2000, although at uneven speed and being highly affected (circa -15% GDP growth) by the late-2000s recession and the 2008–2009 Ukrainian financial crisis
2008–2009 Ukrainian financial crisis
Ukraine was hit heavily by the late-2000s recession, the World Bank expects Ukraine's economy to shrink 15% in 2009 with inflation being 16.4%....
. In general, growth has been undergirded by strong domestic demand, low inflation, and solid consumer and investor confidence.
Economic growth by years
2000 5.9%2001 9.2%
2002 5.2%
2003 9.6%
2004 12.1%
2005 2.7%
2006 7.3%
2007 7.9%
2008 2.1%
2009 -14.8%
2010 4.2%
2011 4.5% (estimated)
Natural resources
Ukraine is relatively rich in natural resourcesNatural Resources
Natural Resources is a soul album released by Motown girl group Martha Reeves and the Vandellas in 1970 on the Gordy label. The album is significant for the Vietnam War ballad "I Should Be Proud" and the slow jam, "Love Guess Who"...
, particularly in mineral deposits. Although oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
and natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
reserves in the country are largely exhausted, it has other important energy sources, such as coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
, hydroelectricity
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...
and nuclear fuel
Nuclear fuel
Nuclear fuel is a material that can be 'consumed' by fission or fusion to derive nuclear energy. Nuclear fuels are the most dense sources of energy available...
raw materials.
Agriculture
Ukraine is the world's largest producer of sunflowerSunflower
Sunflower is an annual plant native to the Americas. It possesses a large inflorescence . The sunflower got its name from its huge, fiery blooms, whose shape and image is often used to depict the sun. The sunflower has a rough, hairy stem, broad, coarsely toothed, rough leaves and circular heads...
oil, a major global producer of grain
GRAIN
GRAIN is a small international non-profit organisation that works to support small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems. Our support takes the form of independent research and analysis, networking at local, regional and...
and sugar
Sugar
Sugar is a class of edible crystalline carbohydrates, mainly sucrose, lactose, and fructose, characterized by a sweet flavor.Sucrose in its refined form primarily comes from sugar cane and sugar beet...
, and future global player on meat
Meat
Meat is animal flesh that is used as food. Most often, this means the skeletal muscle and associated fat and other tissues, but it may also describe other edible tissues such as organs and offal...
and dairy
Dairy
A dairy is a business enterprise established for the harvesting of animal milk—mostly from cows or goats, but also from buffalo, sheep, horses or camels —for human consumption. A dairy is typically located on a dedicated dairy farm or section of a multi-purpose farm that is concerned...
markets. It is also one of the largest producers of nuts. Ukraine also produces more natural honey
Honey
Honey is a sweet food made by bees using nectar from flowers. The variety produced by honey bees is the one most commonly referred to and is the type of honey collected by beekeepers and consumed by humans...
than any other European country. Because Ukraine possesses 30% of the world's richest black soil, its agricultural industry has a huge potential. However, farmland remains the only major asset in Ukraine that is not privatized, hampering access to international investments and best farming technology. The agricultural industry in Ukraine is already highly profitable, with 40-60% profits, but according to analysts its outputs could still rise up to fourfold.
Metal production
Ukraine has a major ferrous metal industry, producing cast ironCast iron
Cast iron is derived from pig iron, and while it usually refers to gray iron, it also identifies a large group of ferrous alloys which solidify with a eutectic. The color of a fractured surface can be used to identify an alloy. White cast iron is named after its white surface when fractured, due...
, steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
and pipes. Among its economy leading comapnies in that field are Metinvest
Metinvest
Metinvest is an international and vertically integrated mining and steel corporation. It was established on 6th June 2006 by the SCM Group. In 2007 Metinvest Ukraine LLC and Metinvest Service Metal Centres LLC were established to function as subsidiaries engaged in production and supply of...
, Kryvorizhstal
Kryvorizhstal
Kryvorizhstal is Ukraine's largest integrated steel company located in the Ukrainian city of Kryvyi Rih.Bought in 2005 by Mittal Steel, the company is one of the most important businesses in Ukraine and a globally important steel producer. It is the largest steel manufacturer in Ukraine and...
, AzovStal, Ilyich Steel & Iron Works, and others. As of 2010, Ukraine was the world's eighth largest steel producer
Steel production by country
This article summarizes the world steel production by country. For the company-oriented account, see List of steel producers.In 2010, total world crude steel production was 1,413.6 million metric tonnes . The biggest steel producing country is currently China, which accounted for 44.3% of world...
(according to World Steel Association). Another important branch is the country's chemical industry
Chemical industry
The chemical industry comprises the companies that produce industrial chemicals. Central to the modern world economy, it converts raw materials into more than 70,000 different products.-Products:...
which includes the production of coke
Coke (fuel)
Coke is the solid carbonaceous material derived from destructive distillation of low-ash, low-sulfur bituminous coal. Cokes from coal are grey, hard, and porous. While coke can be formed naturally, the commonly used form is man-made.- History :...
, mineral fertilizer
Fertilizer
Fertilizer is any organic or inorganic material of natural or synthetic origin that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use...
s and sulfuric acid
Sulfuric acid
Sulfuric acid is a strong mineral acid with the molecular formula . Its historical name is oil of vitriol. Pure sulfuric acid is a highly corrosive, colorless, viscous liquid. The salts of sulfuric acid are called sulfates...
. Manufactured goods include metallurgical equipment, diesel locomotive
Diesel locomotive
A diesel locomotive is a type of railroad locomotive in which the prime mover is a diesel engine, a reciprocating engine operating on the Diesel cycle as invented by Dr. Rudolf Diesel...
s, tractor
Tractor
A tractor is a vehicle specifically designed to deliver a high tractive effort at slow speeds, for the purposes of hauling a trailer or machinery used in agriculture or construction...
s, and automobile
Automobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
s. The country possesses a massive high-tech industrial base, including much of the former USSR
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
's electronics, arms industry
Arms industry
The arms industry is a global industry and business which manufactures and sells weapons and military technology and equipment. It comprises government and commercial industry involved in research, development, production, and service of military material, equipment and facilities...
and space program. However, these fields are state-owned and economically underdeveloped.
Strategic and Defense complex
Ukraine is also among the top 10 armsARMS
Arms or ARMS may refer to:*Arm or arms, the upper limbs of the body*"Arms", a song by singer Christina Perri from the album lovestrong.*ARMS , an American indie rock band formed in 2004*Armaments or arms, weapons*Coat of arms...
exporters in the world. The signing of recent large contracts may put Ukraine into 6th place among biggest arms traders, after the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, Russian Federation, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
and Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
. The output of Ukrainian defense plants grew 58% in 2009, with largest growth reported by aircraft builders (77%) and ship builders (71%).
Energy harvesting and production
Ukraine imports 90% of its oil and most of its natural gas. Russia ranks as Ukraine's principal supplier of oil, and Russian firms now own and/or operate the majority of Ukraine's refining capacity. Natural gas imports come from Russia - which delivers its own gas, as well as the gas from TurkmenistanTurkmenistan
Turkmenistan , formerly also known as Turkmenia is one of the Turkic states in Central Asia. Until 1991, it was a constituent republic of the Soviet Union, the Turkmen Soviet Socialist Republic . Turkmenistan is one of the six independent Turkic states...
. Instead, Ukraine is transporting Russian gas to the EU through its well-developed gas pipelines system, being Europe's vitally important connection. The country's dependence on Russian gas supplies dramatically affects its economics and foreign policy, especially after the recent major gas dispute
Russia-Ukraine gas dispute
The Russia–Ukraine gas disputes refer to a number of disputes between Ukrainian oil and gas company Naftogaz Ukrainy and Russian gas supplier Gazprom over natural gas supplies, prices, and debts...
.
However, Ukraine is independent in its electricity supply, moreover, exporting it to Russia and other countries of Eastern Europe. This is achieved through a wide use of nuclear power
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
and hydroelectricity
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...
. The recent energy strategy intends gradual decreasing of gas- and oil-based generation in favor of nuclear power, as well as energy saving measures, shortening of industrial gas consumption. Reform of the still inefficient and opaque energy sector is a major objective of the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
(IMF) and World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
programs with Ukraine.
Ukraine is a partner country of the EU INOGATE
INOGATE
INOGATE is an international energy co-operation programme between the European Union , Turkey and countries of the NIS, with the exceptions of the Baltic States and the Russian Federation. Formally it describes itself as supporting "international cooperation between the European Union, the...
energy programme, which has four key topics: enhancing energy security
Energy security
Energy security is a term for an association between national security and the availability of natural resources for energy consumption. Access to cheap energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries has led...
,