Ukraine Financial Issues


Violent protests have continued in Ukraine since the start of the outrage in Nov. 2013. In December of that year, protesters set fire to mattresses to keep police forces at bay. Many died during this event, and hundreds more suffered injuries of some kind. The Ukrainian President, Viktor Yanukovych, allegedly changed his mind on a trade deal with the European Union in November, thus sparking the surge of riot and protests. There is a level of political fallibility currently awaiting resolution in Ukraine, but also, a number of financial issues have yet to be overcome.

The economy of Ukraine is described in the International Business Times. For two years the Gross Domestic Product has been “flat,” or weak.  The economy for 2014 was expected to recover slightly, but there has been little stride made due to the unrest.  In 2013 unemployment was down to 7.5 (9.5 in 2009), and like many other developed nations, graduates are reportedly having a harder time finding work. There is also an alleged “energy inefficiency” that leaves the country import-dependent. As it is reported, three-fourths of its oil and natural gas,  and all of its nuclear fuel, comes from Russia.

Though protests have been ongoing as early as November, recent government force has led to more casualties.  The EU agreed Thursday to impose sanctions on Ukrainian officials responsible for combating the protesters with excessive force.  EU foreign ministers said sanctions include asset freezing and visa bans.

BBC reports 571 were injured over the course of three days in the capital of the region, Kiev. At one point, it has been reported 67 police were captured, but some if not all, have already been released.  The “stand-off will continue” throughout the night.

The battle is characterized as “repression” by EU foreign ministers.  The United States State Department announces 20 members of Ukrainian government have already been sanctioned with visa bans.  Vice President Joe Biden has also allegedly warned President Yanukovych over telephone that Washington is ready to impose more sanctions against Ukrainian officials who ordered troops to fire on protesters.

Medics have reported a death count as high as 100. Many of the protesters, who were killed, were killed by snipers. Reuters reports the recent events to be the worst violence seen in Ukraine since the reign of the Soviet Union.   Kiev’s Independence Square was a location of heightened violence.  It was allegedly captured by protesters where 20 civilians died.  There has yet to be an agreement made in response to this. Additionally, the Mayor has reportedly resigned in protest of the of the fighting. Financial issues, and the failed follow-through of the EU trade agreement in Ukraine, shows potential to resurface in the coming months.

As for the city, fire could be seen on every block.  Molotov cocktails, or petrol bombs, were documented being hurled and exploding onto police lines.  One photographer captures the use of construction vehicles against the security forces.  Blood stains the streets as dead bodies and injured combatants were carried off by medical personnel.

President Obama addressed Vladimir Putin previously for the Russian support in the crackdowns both in Ukraine and Syria. Obama has criticized Putin in the past for his failing to respect basic freedoms in both of these countries.

The service sector in Ukraine is likely the fastest-growing sector, reaching a growth of 8.7 percent from 2004 to 2012, according to CFC Consulting Co..  However, throughout 2013 industrial production fell by 5 percent.  The energy inefficiency has reportedly caused the hindrance in productivity levels.  The labor market has also been visibly reducing.  Ukrainian workers income level is much lower in comparison to workers in other developed nations.  In 2012, one estimate of the Gross National Income (GNI) per capita was around $3,500.  The United States had a GNI per capita of over $52,000 that same year.

A United States State Department report claims most foreign financial institutions have left the Ukrainian market. The financial issues will be pressed upon political bodies in the region, but currently, the capital of Ukraine is in a life or death crisis.  President Yanukovych is being encouraged to resign for his lack of action toward a resolution of the fighting.

By Lindsey Alexander


The World Bank
International Business Times
New York Times

You must be logged in to post a comment Login