Economy of Ukraine in a Nutshell

404 In a Nutshell Department

If everything Soviet disappeared
From: Andrey Chervonets, January 22, 17:14, by Mykola Azarov


(Click to enlarge) Left: Poro: I wanna all what’s Soviet disappeared. Right: …as you say

I recently had to participate in discussions about the so-called “heritage”, which left the USSR Ukraine in 1991 and how this heritage we ordered.
I was very surprised by that experts from Kyiv, spoke not only outright falsehoods, but almost did not own specific facts.

In a very short speech (about 5 minutes) it is very difficult to quote arguments, figures, so I will try to Supplement my statement with some concrete facts.

In 1990 Ukraine was part of USSR in the highly developed industrial and technologically Republic. Its total Gross domestic product exceeded the GDP of Poland.(…)

(…) Favorable climate, fertile land, developed industry, education, trained technical personnel was a significant factor in economic growth and development. This was also helped by extremely low prices for key raw materials: gas, oil, fuel for nuclear power stations, which are essentially subsidized Ukrainian industry. There were also low-cost for defense, administration, foreign policy, financial and banking system.

All these costs was carried out through the all-Union budget and their share was significantly lower than it is now.

Extremely favorable credit conditions allowed for long-term capital investments.

In 1990, Ukraine produced nearly 300 billion kW/h of electricity. The best on this indicator in 2013, we produced about 200 billion kW/h, that is in 1,5 times less.

In 1990 we produced 5.3 million tonnes of its own oil, in 2013, approximately 3.0 million tonnes.

Later in 1990, we have produced almost 30 billion m3 of gas, now barely held the production at the level of about 20 billion m3. In 1990, our steel mills had produced nearly 53 million tonnes of steel in 2013, we produced 32.7 million tons of steel, which is approximately 1.5 times less than in the USSR. A particularly sharp decrease has occurred for the production of food products, for example, in 1990, Ukraine produced nearly 9.0 million tonnes of sugar. In 2013, about 2.0 million tons. Per capita consumption of meat fell compared with 1990 in 2 times. Cows there were in 1990 in all types of farms about 25 million head in 2013, approximately 5.0 million heads.

During Soviet times, housing for the population each year was built on the order of 20 million m2. In his best years we would have had around 10 million m2.

One could quote a lot of figures and facts which conclusively show that in 1991 Ukraine had an excellent starting position for the development, modernization and growth of welfare of our people. However, the volontary policy of the then government and the main political forces have created enormous systemic economic crisis that led to the actual collapse of the industrial capacity we had, and instead engaged in the modernization and post-industrial restructuring, we had the main efforts focus on restoring what we got in inheritance.

Judge for yourself, by 1998 Ukraine lost 65% of Gross domestic product, which had in 1990

The Main blow fell on the most important industry: electronic industry (completely eliminated), machinery, light industry (almost completely eliminated), construction industry, food industry, etc.

Thanks to our huge effort in 2002-2004, 2006-2007, 2010-2013 we managed to restore GDP to about 72% from what we had in 1990 ( i.e., to rise from 35% to 72%, 2 times). But these efforts have come to “ashes” after the coup in February 2014 by the end of 2015, i.e. in just 2 years the level of industrial production in 2013 fell to 65%. If Ukraine will continue to follow the path of coups, adventures, she gradually degrades completely.

Was it possible to avoid such a scenario? Clearly can. If to power in Ukraine came in 1991, nationalists with a Russophobic bias, far from the economy and would not be so persistent to destroy the real economy and to pursue ventures under the name of reform, which had nothing to do with what the country needs, but this is a topic for much discussion.

Obviously the next thing for 25 years instead of the system updating of the economy, the political elite of Ukraine were engaged in a fierce struggle for power, which led to such results.

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