UKRAINE

Ukraina

CAPITAL: Kiev (Kyyiv)

FLAG: Equal horizontal bands of azure blue (top) and yellow.

ANTHEM: The National Anthem of Ukraine.

MONETARY UNIT: The official currency, introduced in early 1993, is the hryvnia (hrn), which consists of 100 shahy. $1 = hrn0.19493 (or $1 = hrn5.13) as of 2005.

WEIGHTS AND MEASURES: The metric system is used.

HOLIDAYS: New Year's Day, 1–2 January; Christmas, 7 January; Women's Day, 8 March; Spring and Labor Day, 1–2 May; Victory Day, 9 May; Ukrainian Independence Day, 24 August.

TIME: 2 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

Ukraine, the second-largest country in Europe, is located in Eastern Europe, bordering the Black Sea, between Poland and Russia. Comparatively, Ukraine is slightly smaller than the state of Texas with a total area of 603,700 sq km (233,090 sq mi). Ukraine shares boundaries with Belarus on the n, Russia on the e, the Black Sea on the s, Romania, Moldova, Hungary, and Slovakia on the w, and Poland on the nw. Ukraine's location is one of strategic importance at the crossroads between Europe and Asia. Its land boundary totals 4,663 km (2,897 mi) and its coastline is 2,782 km (1,729 mi). Ukraine's capital city, Kiev, is located in the north central part of the country.

TOPOGRAPHY

The topography of Ukraine consists mainly of fertile plains (steppes) and plateaus. True mountains (the Carpathians) are found only in the west and in the Crimean Peninsula in the extreme south. The Dnieper Uplands run through a central region of the country. The Donets Hills and Azov Uplands are located along the eastern border.

The coastal region of the Black Sea is a lowland area. The indent of Karkint Bay nearly separates the Crimean Peninsula from the mainland. The Kerch Strait connects the Black Sea to the Sea of Azov, which lies between Ukraine and Russia covering an area of 37,599 sq km (14,517 sq mi). An area of wetlands, the Polesye Marshes, is located near the northwest border.

The most important river in Ukraine is the Dnipro (Dnieper), the third longest river in Europe. It serves as a major source of hydro-electric power. Other major rivers include the Danube, Western Buh, the Tisza, the Pripyat, and the Desna. There are over 20,000 small lakes throughout the country, but the largest lakes are artificial, created by dams along the Dnipro.

CLIMATE

The climate is subtropical on the Crimean Peninsula. Precipitation is disproportionately distributed, highest in the west and north, least in the east and southeast. Winters vary from cool along the Black Sea to cold farther inland. Summers are warm across the greater part of the country, except for the south where it becomes hot.

The rest of the country's climate is temperate. The mean temperature in July is about 10°c (66°f). In January, however, the mean temperature drops to -6°c (21°f). Average rainfall is 50 cm (20 in) a year, with variations in different regions.

FLORA AND FAUNA

The land's soil, chernozem (black soil), is very fertile. When the Ukraine was part of the former Soviet Union it was called the country's "bread basket." A steppe zone covers about a third of the southern region of the country. Mixed shrubs, grasses, and evergreens can be found along the Mediterranean-like zone of the Crimean coast. Forest regions include such tree species as beech, linden, oak, and spruce. European bison, fox, and rabbits can be found living on the vast steppes of the country. As of 2002, there were at least 108 species of mammals, 245 species of birds, and over 5,100 species of plants throughout the country.

ENVIRONMENT

Ukraine's environmental problems include the nuclear contamination which resulted from the 1986 Chernobyl accident. One-tenth of Ukraine's land area was affected by the radiation. According to UN reports, approximately one million people were exposed to unsafe levels of radiation through the consumption of food. Approximately 3.5 million hectare (8.6 million acre) of agricultural land and 1.5 million hectare (3.7 million acre) of forest were also contaminated.

Pollution from other sources also poses a threat to the environment. Ukraine releases polluted water, heavy metal, organic compounds, and oil-related pollutants into the Black Sea. The water supply in some areas of the country contains toxic industrial chemicals up to 10 times the concentration considered to be within safety limits.

Air pollution is also a significant environmental problem in the Ukraine. In 1992, Ukraine had the world's seventh-highest level of industrial carbon dioxide emissions, which totaled 611.3 million metric tons, a per capita level of 11.72. However, in 2000, the total of carbon dioxide emissions was at 342.8 million metric tons. The pollution of the nation's water has resulted in large-scale elimination of the fish population, particularly in the Sea of Azov.

As of 2003, only 3.9% of Ukraine's total land area was protected, including 33 Wetlands of International Importance. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 14 types of mammals, 13 species of birds, 2 types of reptiles, 11 species of fish, 14 species of invertebrates, and 1 species of plant. Threatened species include the European bison, the Russian desman, and the Dalmatian pelican. The wild horse has become extinct.

POPULATION

The population of Ukraine in 2005 was estimated by the United Nations (UN) at 47,110,000, which placed it at number 26 in population among the 193 nations of the world. In 2005, approximately 16% of the population was over 65 years of age, with another 15% of the population under 15 years of age. There were 85 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 0.7%, a rate the government viewed as too low. The projected population for the year 2025 was 41,650,000. The population density was 78 per sq km (202 per sq mi), with the Dnieper Lowlands and the Donets Basin being the most densely populated regions.

The UN estimated that 68% of the population lived in urban areas in 2005, and that population in urban areas was declining at an annual rate of -0.57%. The capital city, Kiev (Kyyiv), had a population of 2,618,000 in that year. Other cities and their estimated populations were Kharkiv, 1,436,000; Dnipropetrovs'k, 1,036,000; Odesa, 1,010,000; Donetsk, 992,000; Lvov, 876,000; and Zaporizhzhya, 798,000.

MIGRATION

Since the breakup of the former Soviet Union, tens of thousands of Ukrainians have returned to the Ukraine. Between 1989–95, 15,000 returned from Azerbaijan, and 39,000 returned from Kyrgyzstan. Between 1991–95, 15,000 returned from Belarus; 82,000 returned from Kazakhstan; and 30,000 returned from Tajikistan. There were still 150,000 ecological migrants internally displaced from the 1986 Chernobyl accident. As of February 1996, 250,000 Tatars had returned from Central Asia, mostly from Uzbekistan. These Tatars belong to the 500,000 Tatars that were forcibly deported from the Crimean peninsula under the Stalin regime. The signature of an agreement between Ukraine and Uzbekistan in 1998 on the simultaneous release from Uzbek citizenship and acquisition of Ukrainian citizenship enabled more than 38,000 Crimean Tatars to obtain Ukrainian citizenship. Many of the rest of the Crimean Tatars in Central Asia wish to return to the Crimea.

Due to a series of amendments to the Law of Citizenship and a naturalization campaign, all formerly deported stateless persons residing in Ukraine had acquired Ukrainian citizenship as of 1999. The total number of migrants living in the Ukraine in 2000 was 6,947,000. In 2004, there were 2,459 refugees and 1,838 asylum seekers in the Ukraine. In addition, in that same year there were 80,569 others of concern to the United Nations High Commissioner for Refugees (UNHCR), made up of 2,809 Abkhazia, 6,500 Crimean Tartars (formerly deported persons), and 71,260 stateless persons. Also in 2004, 50,693 Ukrainians were refugees in Germany, and 28,484 in the United States, and over 5,000 Ukrainians sought asylum in 10 countries, in Europe, the United Kingdom, and the United States.

The net migration rate was estimated as -0.63 migrants per 1,000 population in 2005. The government views the immigration level as too low, and the emigration level as too high. Worker remittances in 2003 were $185 million.

ETHNIC GROUPS

According to the latest census (2001), 77.8% of the total population is Ukrainian. Russians form 17.3%, mainly in eastern Ukraine. Belarussians, Moldovans, Crimean Tatars, Bulgarians, Hungarians, Romanians, Poles, and Jews each account for less than 1% of the population. About 700,000 Rusyns (Ruthenians) live within the country, but they are not an officially recognized ethnic group.

LANGUAGES

Like Russian, Ukrainian is an eastern Slavic language. It has several distinctive vowel and consonant sounds, however. It is written in the Cyrillic alphabet but has three extra letters. Ukrainian began to emerge as a separate language from Russian in the late 12th century. Ukrainian is the official language and is spoken by about 67% of the population. Russian is spoken by about 24% of the population. Other languages include Romanian, Polish, and Hungarian.

RELIGIONS

Ukraine was Christianized by St. Volodymyr in 988. Under Soviet rule, churches and religion were subject to suppression and political manipulation, a situation that ended with the declaration of independence in 1991. Based on a 2003 survey, over 90% of the population claim to be Christians, primarily from one of three denominations: the Ukrainian Orthodox Church—Moscow Patriarchate (10.7%), the Ukrainian Orthodox Church—Kiev Patriarchate (14.8%), and the Ukrainian Autocephalous Orthodox Church (1%).

About 6.4% of the religiously active population are members of the Ukrainian Greek Catholic Church, also known as the Uniate, Byzantine, or Eastern Rite church. Roman Catholics claim about 2% of the population and are largely concentrated in the formerly Austro-Hungarian and Polish western territories. Other Christian groups represented include Baptists, Pentecostals, Jehovah's Witnesses, Mormons, Anglicans, Lutherans, Methodists, Calvinists, Pentecostals and Evangelicals. The head of the Spiritual Directorate of the Muslims of Ukraine estimates that there are as many as two million members of the nation's Muslim community. Islam is practiced mainly by the Tatar population of the autonomous republic of the Crimea. There are an estimated 300,000 Jews in the country. Small communities of Buddhists, Baha'is, and Hare Krishnas are also present.

The constitution provides for freedom of religion and this right is generally respected. However, some smaller and nontraditional religious groups have reported problems in meeting government registration requirements. An All-Ukrainian Council, composed of members from various religions, meets regularly with the State Committee of Religious Affairs to discuss potential problems between religions.

TRANSPORTATION

As of 2004, there were 22,473 km (13,988 mi) of railway in the Ukraine, all of it 1.5 m (broad) gauge. Highways in 2002 totaled 169,679 km (105,540 mi), of which 164,249 km (102,162 mi) are hard-surfaced, including 1,770 km (1,100 mi) of expressways. In 2003, there were 5,603,800 passengers cars and 985,700 commercial vehicles registered for use.

The main marine ports are Berdyans'k, Illichivs'k, Kerch, Kherson, Mariupol', Mykolayiv, Odesa, and Sevastopol'. The merchant marine fleet had 201 ships of 1,000 GRT or over, for a total capacity of 675,904 GRT in 2005. There are 1,672 km (1,040 mi) of navigable inland waterways as of 2004. The Dnipro River is the primary inland waterway, but the Danube, western Pivd Buh, Pryp'yat', and Desna are also used for import-export traffic.

Ukraine had an estimated 656 airports in 2004. As of 2005 a total of 199 had paved runways, and there were also 10 heliports. The largest airports are in Kiev, Kharkiv, Donetsk, Odesa, and Simferopol'. In 2003, 1.477 million passengers were carried on scheduled domestic and international airline flights.

HISTORY

Ukrainians, Russians, and Belarussians belong to the eastern branch of the Slavic peoples, all of which trace their origins to medieval Kievan Rus. Kievan Rus was established in the 9th century ad. St. Volodymyr the Great, one of the most celebrated rulers of Kievan Rus, adopted Christianity as the national faith in 988. Internal strife in the 12th century and the Mongol invasion in the 13th led to the ultimate destruction of Kievan Rus as a major power. Halych-Volhynia in Western Ukraine, however, became the new political center until it fell to Polish-Lithuanian rule in the 14th century. During the following centuries Ukraine found itself the object of power struggles among its more powerful neighbors.

In a protracted struggle against Poland, Ukrainian Cossacks were able to establish an independent state in the 16th and 17th centuries. To safeguard Ukrainian independence from the Poles, Ukraine concluded the Treaty of Pereyaslav in 1654 with Moscow. The nature of this agreement has generated much historical controversy: Russian historians claim that, as part of the agreement, Ukraine accepted Moscow's rule, while Ukrainians claim that Ukraine was to retain its autonomy. The ensuing war between Russia and Poland resulted in the partition of Ukraine. Most of the rest of Ukraine's territory was incorporated into the Russian Empire with the partition of Poland in 1795. Small parts of Ukrainian territory to the west were absorbed by the Hapsburg Empire.

A Ukrainian national movement arose in the 19th century. Later, the collapse of the Tsarist regime and the chaos of the Russian revolution in 1917 allowed Ukraine to assert its independence. In April 1917, the National Ukrainian Assembly met in Kiev and in November proclaimed the creation of the Ukrainian People's Republic. When the Bolsheviks formed a rival Ukrainian Communist government, the National Assembly proclaimed the independence for Ukraine on 22 January 1918.

On 1 November 1918, an independent Republic of Western Ukraine was declared after the disintegration of the Austro-Hungarian Empire. On 22 January 1919, the Ukrainian People's Republic and the Republic of Western Ukraine united and established an independent Ukrainian state, recognized by over 40 other nations.

The new government, however, could not maintain its authority in the face of civil strife and the threat of the approaching Bolshevik, pro-Tsarist, and Polish forces. By 1920, eastern Ukraine fell to the Bolsheviks and became the Ukrainian Soviet Socialist Republic while Poland occupied most of western Ukraine. Small areas of the west went to Romania, Hungary, and Czechoslovakia.

Early Soviet policy allowed for cultural autonomy and local administration by Ukrainian Communists. But Stalin changed this liberal policy in the 1930s when he initiated strict Russification and persecution of Ukrainian nationalists. This policy culminated in the Soviet-engineered famine of 1932–33 that resulted in the death of 7 to 10 million Ukrainians.

The 1939 Nazi-Soviet pact assigned Poland's Ukrainian territory to the Soviet sphere of influence. When Germany invaded the Soviet Union in 1941, Ukrainian nationalists in L'vin proclaimed the restoration of the Ukrainian state. The Germans arrested these nationalists and turned Ukraine into a German colony. When it became clear that the Nazis wanted to enslave them and not liberate them, a resistance movement led by nationalists fought both the Soviet and German armies. During World War II, Ukraine lost six million people through death or deportation and a total of 18,000 villages were destroyed.

The Ukrainian resistance movement continued to fight in Soviet Ukraine (the western Ukraine which had been part of Poland had been incorporated into the Ukrainian S.S.R.). It was not until the 1950s that they were completely defeated by the better-equipped Soviet Red Army.

In March 1990, semi-free elections for parliament were held. The Communist-dominated parliament declared Ukraine a sovereign state on 16 July 1990. On 24 August 1991, following the failed coup in Moscow, the parliament proclaimed the independence of Ukraine and declared that only the constitution and laws of Ukraine were valid on its territory. On 1 December 1991 the citizens of Ukraine confirmed this proclamation with a 90.3% vote in favor of independence. At the time of this referendum, Leonid Kravchuk was elected as the first president.

Ukraine joined Russia and Belarus in creating the Commonwealth of Independent States (CIS) in December 1991. This agreement was meant to facilitate coordination of policy in various fields. But despite their efforts, Ukrainian-Russian differences arose in several areas, including the command and control of nuclear weapons, the formation of a unified military command, and the character and pace of economic reform.

In light of the 1986 Chernobyl nuclear power plant accident, Ukraine declared its intention to become a nuclear-free state. However, this process progressed much more slowly than expected. The lack of fuel resources and disagreements with Russia over pricing had induced the government to keep the Chernobyl plant running. The START I agreement received the Ukrainian parliament's conditional ratification in November 1993 and unconditional ratification in February 1994, but the transfer of nuclear weapons to Russia did not occur as smoothly as planned. On 6 May 1992 it was announced that all Ukrainian tactical nuclear weapons had been shipped to Russia for dismantling. However, Ukraine cited Russia's failure to dismantle these weapons, inadequate compensation, and security concerns as the reasons for not turning over its entire strategic arsenal.

The CIS countries agreed to a unified nuclear command, but Ukraine declared its intent to create its own national conventional military and opposed any efforts to create a unified CIS conventional force. President Kravchuk declared all conventional forces on Ukrainian territory to be the property of Ukraine. This has given rise to disputes and disagreements about the Black Sea fleet, to which Russia has also laid claim.

Since its independence, Ukraine has experienced unrest in some of the predominantly Russian areas in the east and southeast. Crimea is the most notable example, declaring independence on 6 May 1992. At the same time the Russian parliament approved a resolution that declared the 1954 Soviet grant of the Crimea to Ukraine unconstitutional and void. This resolution, however, was rejected by Russian president Boris Yeltsin. Demands for secession in Crimea have continued to complicate Ukrainian-Russian relations.

Ukraine adopted a new constitution in June 1996 establishing a presidency (elected for a five-year term) and a one-chamber parliament called the Supreme Council (elected for a four-year term). Under transitional provisions, President Leonid Kuchma, elected over incumbent Leonid Kravchuk in 1994, was to serve until elections in 1999. The Supreme Council adopted a new civil code in June 1997. In the same year, Ukraine signed a 10-year friendship treaty with Russia and an agreement with Western nations on shutting down the Chernobyl nuclear plant by 2005. It was shut down in 2000. Public discontent with the slow pace of economic reforms was evident in the strong showing by the Communist Party in the 1998 legislative elections, in which it won 25% of the vote (116 of 450 seats). However, support for the party did not translate into support for union with Russia, proposed by Petro Symonenko, the party's candidate in the 1999 presidential elections. Leonid Kuchma was reelected in a November 1999 runoff election with 56% of the vote and nominated central bank chairman Victor Yushchenko to be prime minister. Soon after taking office, Yushchenko reached a restructuring agreement with foreign bond holders to avoid default on the nation's $2.6 billion foreign debt. As the new century began, Ukraine's much-needed economic reforms remained stalled by the long-standing problems of corruption and political stalemate between reformists and their parliamentary opponents.

In November 2000, the body of Ukrainian journalist Georgiy Gongadze was found decapitated: opposition demonstrators alleged Kuchma was involved in the murder of the journalist who was critical of the administration, and there were calls for Kuchma's impeachment. Kuchma denied the allegations, but in February 2001, the EU called for an inquiry into the journalist's murder. In September 2002, an ad hoc commission set up by parliament to investigate Gongadze's murder recommended that criminal charges be brought against the president and other top officials, based on tape recordings of a meeting at which Kuchma allegedly asked security officials to "take care" of the journalist. Anti-Kuchma protests were held throughout the country to call for the president's resignation. All six national television stations were off the air on the morning of the 16 September demonstrations, purportedly for "maintenance." Many protesters were beaten and arrested. In October, the Kiev Court of Appeals opened a criminal case against Kuchma, based upon the allegations of his involvement in the murder.

In parliamentary elections held on 30 March 2002, Ukrainians voted for many opposition parties, although parties opposed to Kuchma alleged widespread fraud. In April, Yushchenko's government was dismissed following a no-confidence vote in parliament; he was replaced with Viktor Yanukovych—the governor of the eastern province of Donetsk Oblast.

Although Yushchenko is respected in the West for fighting corruption and furthering economic reforms, he is unpopular with many Ukrainian businessmen, who are seen to be corrupt. Presidential elections were scheduled for 2004, and Kuchma was constitutionally barred from running for a third term. In 2002, he announced plans to amend the constitution and weaken his executive powers. This was seen as a move to transfer power to parliament, in the event that a reformer such as Yushchenko would be elected president. Kuchma's plans also included splitting parliament into two chambers. In March 2003, Yushchenko stated he feared the new amendments would postpone presidential elections for two years, and extend Kuchma's rule until 2006. Tens of thousands of protesters nationwide took to the streets in March, calling once again on Kuchma to resign for abuse of office, arms dealing, vote-rigging, corruption, the involvement in Gongadze's murder, and for impoverishing the country.

For the 2004 presidential elections Yushchenko announced that he would be running as an independent. His main contender was the current prime minister Viktor Yanukovych. Since the latter was backed by Kuchma, and by most of the Ukrainian TV channels, Yushchenko relied heavily on direct interaction with the people for bringing his message across.

The initial vote was held on the 31 October 2004 and neither of the two candidates obtained a comfortable lead—Yushchenko won 39.87% of the votes, while Yanukovych won 39.32%. A second voting round was therefore staged on 21 November, with the final vote tally showing Yanukovych as the winner. However, observers noted several cases where the voting process was rigged to Yanukovych's favor. The suspicion that loomed over the October elections was strengthened by the major discrepancies between the exit poll results conducted by the observers, and the official vote count. As a result, Yushchenko called for the people from Kiev, and from all over the country, to take to the streets and protest. After 13 days, the so-called Orange Revolution (named so after the orange ribbons worn by Yushchenko's supporters) determined the Supreme Court to nullify the election results and order a re-run, to be held on 26 December 2004. This time, Yushchenko emerged victorious, by an 8% margin. Yanukovych contested the results but eventually stepped down from his post.

In January 2005, Yushchenko was sworn in as president, and in February 2005 he nominated Yulia Tymoshenko—one of his former deputies, and an ardent supporter of the Orange Revolution—as prime minister. Although there had been some controversy regarding her "oligarch status" (she is one of the wealthiest people in Ukraine), her nomination was accepted by the parliament with 373 out of 450 possible votes. On 8 September 2005, after only a couple of months as prime minister, and following several resignations and accusations of corruption, Tymoshenko and her government were ousted by Yushchenko. Yuriy Yekhanurov, head of the Dnipropetrovsk Oblast state administration, was appointed as the new prime minister.

Drawing on the political capital he garnered in the West after winning the troubled 2004 elections (he was allegedly poisoned with dioxins that lead to severe facial disfigurements), Yushchenko pressed for EU and NATO integration. Both organizations cautioned, however, that the pace of political, economic and military reforms would have to be increased before Ukraine's candidacy could be seriously considered. Constitutional reforms went into effect on 1 January 2006.

GOVERNMENT

Ukraine is governed by a constitution adopted in June 1996, which allows for an elected parliament and president. The constitution was amended on December 2004 as a response to the presidential election crisis.

The Ukrainian parliament consists of a single chamber with 450 seats called the Rada (Supreme Council). Seats are allocated proportionally to the parties that acquire more than 3% of the electoral votes. Members of parliament currently serve four-year terms, while the president serves a five-year term. (Following the 2006 elections members of parliament will serve five-year terms.) The prime minister and cabinet are nominated by the president and confirmed by the Supreme Council. Although many parties participate in the elections, many candidates run as independents as well.

Ukraine's first postindependence presidential elections were held in two rounds on 26 June and 10 July 1994. In this election, the incumbent Leonid Kravchuk was defeated by his former prime minister, Leonid Kuchma, who was reelected in November 1999. In December 2004, following massive popular protests and after the Supreme Court ordered a re-run of the allegedly rigged November 2004 elections, Kuchma's former prime minister—Viktor Yushchenko—was elected president.

POLITICAL PARTIES

There are some 120 political parties active in Ukraine. They fall roughly into four different categories: radical nationalist, democratic nationalist, liberal-centrist, and Communist-socialist.

The radical nationalist parties are fearful of Russia and advocate a strong presidency. Their commitment to democracy—particularly if regions of Ukraine seek to secede—is not firm. The democratic nationalist parties are also fearful of Russia, but also appear strongly committed to democracy, individual rights, and the protection of private property. The influential Rukh Party (Ukrainian Popular Movement), which won 43 seats in the 1998 elections, belongs to this group. The liberal-centrist parties are particularly concerned with promoting free market economic reform. They are also committed to democracy and individual rights. The communist-socialist parties oppose privatization and seek continued state control of the economy. They generally favor close relations with Russia. The most important party in this group, the Communist Party of Ukraine, won 116 seats in 1998.

In the March 2002 parliamentary elections, many parties grouped together into voting blocs. Winning the most seats in the Rada was the "Our Ukraine" coalition, led by Viktor Yushchenko, which took 23.6% of the vote and 112 of 450 seats. The coalition was registered in January 2002, and then included the Ukrainian People's Rukh Party (registered in 2003 as the Ukrainian People's Party), the People's Rukh of Ukraine, the Congress of Ukrainian Nationalists, the Reforms and Order Party, Solidarity, the Liberal Party, the Youth Party of Ukraine, the Christian People's Union, the Go Forward, Ukraine! Party, and the Republican Christian Party. In March 2003, Yushchenko announced a "new political force" would be created that would form the basis for a Europeanstyle political party. Yushchenko was elected president in December 2004.

Also gaining seats in parliament in the 2002 elections were: the "For a United Ukraine" bloc, 101; the Communist Party, 67; the United Social-Democratic Party of Ukraine, 24; the Socialist Party of Ukraine, 23; the Yuliya Tymoshenko bloc, 21; the Democratic Party of Ukraine/Democratic Union liberal bloc, 4; the "Unity" bloc, 3; and independents and others held 95 seats.

On 8 September 2005, the government led by Yuliya Tymoshenko was ousted by Yushchenko after allegations of corruption made their way into the media.

Parliamentary elections were held on 26 March 2006. Yanukovych's Party of Regions won the most seats, taking 186 of 450 (32.1%). Tymoshenko's Bloc won 129 seats (22.3%); Our Ukraine, 81 seats (13.9%); the Socialist Party of Ukraine 33 seats (5.7%); and the Communist Party of Ukraine 21 seats (3.7%). The next parliamentary elections were scheduled for March 2011.

LOCAL GOVERNMENT

Ukraine is divided into 24 administrative regions (oblasts) plus the autonomous Republic of Crimea. In addition, the cities of Kiev, the capital of Ukraine, and Sevastopol, capital of Crimea, enjoy oblast status. The oblast is divided into districts, each of which has a representative in the Rada (Supreme Council).

A strong secessionist movement has risen up in Crimea. In a nonbinding referendum held in 1994, over 78% of the 1.3 million people who voted supported greater autonomy from Ukraine. In 1995 Ukraine's parliament and President Leonid Kuchma moved to contain secessionist elements in the region. Kuchma temporarily took direct control over the area and afterward decreed that he must approve all candidates for premier of the region. The Crimea adopted a new constitution in 1999 providing for additional budgetary autonomy from the rest of Ukraine.

In spite of the election of the reform-oriented Yushchenko in 2004, Ukrainian local government officials complained that budget expenditures were still done in a centralized and inefficient fashion. On 13 September 2005 the Constitutional Court of Ukraine enforced a series of constitutional amendments that shift most of the presidential clout to the parliament. The new laws came in effect on 1 January 2006 and were expected to give more power to local governments.

JUDICIAL SYSTEM

The court system, until 2001, remained similar to that which existed under the former Soviet regime. In July 2001, a series of laws were passed designed to bring existing legislation regarding the judiciary and the administration of justice more in line with the requirements for an independent judiciary. The three levels of courts are rayon (also known as regional or people's courts), oblast (provincial) courts, and the Supreme Court. All three levels serve as courts of first instance, the choice of level varying with the severity of the crime. A case heard in first instance at the rayon level can be appealed through the next two higher stages. A case heard in first instance in the Supreme Court is not subject to appeal or review. A 1992 law added a Constitutional Court to the existing system. The Constitutional Court consists of 19 members appointed for nine-year terms. It is the final interpreter of legislation and the constitution, and it determines the constitutionality of legislation, presidential edicts, cabinet acts, and acts of the Crimean autonomous republic.

The Rada (Supreme Council) selects judges on recommendation from the Ministry of Justice based partly upon government test results. Oblast and Supreme Court judges must have five years of experience in order to be appointed and may not be members of political parties.

A new constitution, adopted in 1996, and amended in 2004, provides that the judiciary is funded separately from the Ministry of Justice to ensure an independent judiciary. Because the courts are funded by the Ministry of Justice, however, they have been subject to executive influence, and have suffered from corruption and inefficiency.

ARMED FORCES

Ukraine was able to quickly organize an impressive national army, in part because it had always been an important contributor to the Soviet armed forces. In 2005 Ukranian armed forces numbered 187,600 active personnel with 1,000,000 reservists. Ground forces (Army) numbered 125,000 and was organized into three commands and a number of specialized brigades and regiments of artillery, special forces, air defense, rocket and missile, and attack helicopter units. It was equipped with 3,784 main battle tanks, 600 reconnaissance vehicles, 3,043 armored infantry fighting vehicles, 8,492 armored personnel carriers, and 3,705 artillery pieces. The Air Force and Air Defense Force had a combined total of 49,100 active personnel, that operated 444 combat capable aircraft, including 26 bombers, 280 fighters, and 187 fighter ground attack aircraft. The Air Defense force was outfitted with 825 surface-to-air missile batteries. The Navy numbered 13,500 personnel. Major naval units included one tactical submarine, one frigate, three corvettes, and five patrol/coastal vessels. A cruiser and another frigate are listed as nonoperational. The Navy's aviation arm had up to 2,500 active personnel. Equipment included 11 fixed wing and 72 rotary wing antisubmarine warfare aircraft. The Navy also had a single brigade of 3,000 naval infantry personnel.

Of greatest international concern has been the fate of the ICBMs and strategic bombers on Ukrainian soil, which are supposed to return to Russia for dismantling. As of 2000, the number of ICBMs had been reduced from 174 to 44. As of 2005 the number of strategic bombers had been cut to 26.

Paramilitary forces included an estimated 39,900 internal security troops, 45,000 border guards, 14,000 coast guard personnel, and more than 9,500 civil defense troops. The Ukraine participated in missions in eight foreign countries or regions. The defense budget for 2005 was $1.09 billion.

INTERNATIONAL COOPERATION

Ukraine became a member of the United Nations on 24 October 1945; the country is part of the ECE and several nonregional specialized agencies, such as the IAEA, the FAO, the World Bank, UNCTAD, UNESCO, UNIDO, and the WHO. It is a member of the Commonwealth of Independent States (CIS), the Council of Europe, the Black Sea Economic Cooperation Zone, the Euro-Atlantic Partnership Council, the European Bank for Reconstruction and Development, and the OSCE. The nation has observer status in the WTO, the OAS, and the Nonaligned Movement. In 2001, Georgia, Uzbekistan, Ukraine, Azerbaijan, and Moldova formed a social and economic development union known as GUAAM. Uzbekistan withdrew from the partnership in 2005.

Ukraine is an active member of the NATO Partnership for Peace. The government has supported UN missions and operations in Kosovo (est. 1999), Lebanon (est. 1978), Ethiopia and Eritrea (est. 2000), Liberia (est. 2003), Sierra Leone (est. 1999), Georgia (est. 1993), and the DROC (est. 1999). Ukraine is a member of the Zangger Committee and the Nuclear Suppliers Group (London Group).

In environmental cooperation, Ukraine is part of the Basel Convention, the Conventions on Biological Diversity and Air Pollution, Ramsar, CITES, the London Convention, the Kyoto Protocol, the Montréal Protocol, MARPOL, and the UN Conventions on the Law of the Sea and Climate Change.

ECONOMY

Ukraine was central to the Soviet agricultural and industrial system. The rich agricultural land of this region (commonly called the "breadbasket" of the former Soviet Union) provided 46% of Soviet agricultural output in the 1980s, and also accounted for 25% of the USSR's coal production. Ukraine's economic base is dominated by industry, which accounts for over 45% of GDP (2005 est.). However, agriculture continues to play a major role in the economy, representing about 18% of GDP.

Real GDP declined 3% in 1990, 11% in 1991, and an estimated 15% in 1992. Recovery in 1997 was cut short by the effects of the Russian financial crisis of 1998. Real GDP fell -1.7% in 1998 and -0.2% in 1999. However, the economy has registered strong positive growth since 2000—5.9% in 2000; 9.1% in 2001, and a projected 5% in 2002—despite the global slowdown beginning in 2001. Official unemployment since 1999 has averaged about 4.2%. Inflation, averaging 21.67% 1998 to 2000, was reduced to a single-digit rate (6%) in 2001, and reached 0.8% in 2002. Although still high, this is a marked improvement over the 400% hyperinflation that plagued the country in 1994. In response to the hyperinflation, the government introduced a new currency and instituted mass privatization in 1995. Yet the country remained plagued by a slow economic decline. A new civil code adopted by parliament in 1997 was expected to stabilize the country's business climate. Economic recovery beginning in 2000 is attributable to a number of factors: double-digit growth in industrial output in 2001; a good grain harvest resulting from good weather and reduced governmental controls; improved export competitiveness from the depreciation of the currency in 1998–99; the clearance of many wage and pension arrears; increased domestic demand as a result of wage and pension increases granted in 2000 and 2001; considerable idle capacity; and the expansion of export markets.

This economic expansion continued in the following years, with GDP growth rates of 5.2% in 2002, 9.6% in 2003, and an astonishing 12.1% in 2004; the economy was expected to grow by 6.0% in 2005. Inflation started growing again after 2002, reaching 12% in 2004, and being expected to reach 14.0% in 2005. The unemployment rate remained fairly stable, hovering around 3.5%.

Ukraine's economic dynamism was driven mainly by exports. The most effective growth engines in 2003–04 were manufactured goods, construction, oil and gas transport, services, private consumption, and government spending. The end of 2004 saw a hampering of this trend as three rounds of presidential elections and weeks of protesting throughout the country (the Orange Revolution), took their toll on the Ukrainian economy. The newly elected president has openly stated that Ukraine will take a clear course towards an open market economy, and that the mid-term goal is EU integration. His reign, although plagued by corruption and government inefficiency, promises great potential for the future.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Ukraine's gross domestic product (GDP) was estimated at $340.4 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $7,200. The annual growth rate of GDP was estimated at 4.4%. The average inflation rate in 2005 was 13.9%. It was estimated that agriculture accounted for 18.5% of GDP, industry 45.2%, and services 36.1%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $330 million or about $7 per capita and accounted for approximately 0.7% of GDP. Foreign aid receipts amounted to $323 million or about $7 per capita and accounted for approximately 0.7% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Ukraine totaled $28.07 billion or about $580 per capita based on a GDP of $50.1 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption fell at an average annual rate of -3.6%. In 2001 it was estimated that approximately 34% of household consumption was spent on food, 16% on fuel, 6% on health care, and 4% on education. It was estimated that in 2003 about 29% of the population had incomes below the poverty line.

LABOR

As of 2005, the Ukraine's labor force totaled an estimated 20.46 million persons. In 2003, the services sector accounted for 51.2% of the workforce, with 29.9% in industry and 18.9% in agriculture. For the year 2005, Ukraine's official unemployment rate was 3.8%. However, the International Labor Organization had calculated that the country's actual unemployment rate was around 9–10%, due to the large number of workers that were either underemployed or not registered as unemployed.

In November 1992, the official Soviet-era unions were renamed the Federation of Trade Unions (FPU), which began then to operate independently from the government. Since 1992, many independent unions have been formed, providing an alternative to the official unions in most sectors of the economy. As of 2002, estimates of independent union membership was estimated to be three million. Membership in the FPU was thought to be 14 million. The right to strike is protected, except for the military, police, and continuing process plants.

The minimum employment age is 17, although children aged 15 to 17 can be employed by businesses with governmental permission. However, child labor remains a problem. In 2002, the minimum wage was $22 per month, which was significantly below the cost of living. The maximum workweek is set at 40 hours; the law also provides for a minimum of 24 days of vacation per year. Ukraine's laws set forth occupational health and safety standards but these are frequently ignored in practice and are not sufficiently enforced by the government.

AGRICULTURE

About 57% of the total land area is arable, with another 14% utilized as permanent pasture land. Agriculture accounted for 14% of GDP in 2003. As in other former Soviet republics, total agricultural production dramatically declined after 1990. The average annual decline during 1990–2000 was 5.8%. By 1999, the agricultural sector was only producing 47% as much as it had during 1989–91. However, during 2002–04, crop production was 12.8% higher than during 1999–2001. Production amounts in 2004 included (in 1,000 tons): sugar beets, 16,502; potatoes, 20,755; wheat, 17,517; fruit, 2,131; sunflower seeds, 3,050; cabbage, 1,559; grapes, 500; raspberries, 20; rapeseed, 148; soybeans, 363; and tobacco, 4.

Ukraine's steppe region in the south is possibly the most fertile region in the world. Ukraine's famous humus-rich black soil accounts for one-third of the world's black soil and holds great potential for agricultural production. However, the soil is rapidly losing its fertility due to improper land and crop management. Ukraine typically produced over half of the sugar beets and one-fifth of all grains grown for the former USSR. In addition, two of the largest vegetable-oil research centers in the world are at Odessa and Zaporizhzhya. Agroindustry accounts for one-third of agricultural employment. To some extent, however, agroindustrial development has been hampered by the deteriorating environment as well as a shortage of investment funds due to the aftermath of the nuclear power plant disaster at Chernobyl. According to estimates, nearly 60,000 hectares (148,250 acres) of arable land in the Chernobyl vicinity are now unavailable for cultivation. Out of 33 million hectares (81.5 million acres) of total arable land, more than 17 million hectares (42 million acres) are depleted, 10 million hectares (24.7 million acres) are eroded, and another 10 million have excessive acidity. Furthermore, 17% of arable land is located in areas where there is risk of drought.

ANIMAL HUSBANDRY

Just under 14% of Ukraine's total land area is composed of permanent pasture land. As of 2005, there were 6.9 million head of cattle, 6.5 million pigs, 875,000 sheep, 894,000 goats, 120 million chickens, and 20 million ducks. Horses, turkeys, goats, ducks, and rabbits are also bred and raised. Between 1990 and 2000, livestock production declined by 50%. Lack of finances for buying fuel pushed farmers in the public sector to sell their cattle abroad, mostly to Asian buyers. During 2002–04, livestock production was up 7.2% from 1999–2001. In 2005, meat production included: beef, 556,000 tons (down from 1,986,000 tons in 1990); pork, 510,000 tons (1,576,000 tons in 1990); and poultry, 470,000 tons (708,000 tons in 1990). There are several factors involved with Ukraine's declining meat production: decentralization of meat processing, with greater use of processing facilities at the farms; lack of cheap credits to buy animals; and antiquated meat processing equipment. Milk and egg production in 2005 amounted to 14.3 million tons and 726,000 tons, respectively. In 2004, exports of meat and meat products were valued at $191.8 million; milk, dairy, and eggs, $438.5 million. In 2005, Ukraine produced 60,500 tons of honey, fifth highest in the world.

FISHING

Fishing occurs mainly on the Black Sea. In 2003, the total catch came to 248,198 tons, reflecting diminished landings since the 1990 catch of 1,048,360 tons. Mackerel and sardines together accounted for 22% of the 2003 catch. Exports of fish and fish products amounted to $17.6 million in 2003. Ukrainian fish consumption per capita amounts to 12.8 kg (28.2 lb) per year—less than half that of western Europe (24.2 kg/53.2 lb).

FORESTRY

About 16.5% of the total area was forest in 2000. While the radioactive contamination of forestland from the 1986 Chernobyl disaster is well-known, there is also widespread land, water, and air pollution from toxic wastes, which has also adversely affected timberlands. Forestry production in 2004 included: roundwood, 4.8 million cu m (169 million cu ft); wood-based panels, 1,308,000 cu m (46.2 million cu ft); wood pulp, 27,000 tons; and paper and paperboard, 701,000 tons.

MINING

Ukraine is one of the world's leading producers of iron ore, as well as a major world producer of ferroalloys, ilmenite, steel, and manganese ore (with 75% of the former Soviet Union's reserves). The mining and metallurgical industry employed 500,000 persons; 270,000 worked in ironmaking, steelmaking, and ferroalloys enterprises. In 2002, over 60% by value of Ukraine's $18 billion in exports came from the "mineral products" category. Ferrous and nonferrous metals were Ukraine's top export commodities in 2002. Fuel and petroleum products were the country's second-leading export commodities.

Production outputs for 2002 included: marketable iron ore (gross weight), 58.9 million metric tons; manganese, mined in the Nikopol' and Bol'shoy Tokmak basins (metal content), 940,000 metric tons; rock salt, 2.3 million metric tons (estimated); and potash (at the Stebnik and Kalush mines), 60,000 metric tons. In addition, Ukraine produced alumina, mercury, titanium (ilmenite and rutile concentrates), zirconium (the FSU's only ore producer), cement, clays (bentonite and kaolin), graphite, nitrogen, and sulfur (from the Rozdol and Yavoriv deposits). Iron ore production, concentrated at seven mining and beneficiation complexes in the Krivyy Rih (Krivoy Rog) Basin, and at the Poltavskiy complex, fell by 50% from 1990 through 1995. Explored iron ore reserves totaled 33 billion tons, including 28 billion tons of industrial reserves; total capacity was 108.5 million tons per year. Manganese reserves totaled 2.2 billion tons, and annual capacity was 6 million tons. No antimony, cadmium lead, nickel, tin, zinc, zircon, dolomite, limestone fluxes, quartz, soda ash, talc, or uranium was mined in the past several years, the Ukraine having sharply reduced or ceased producing a number of these commodities as a result of the large reduction in demand following the breakup of the Soviet Union.

At the end of the 1980s, Ukraine mined 5% of the world's output of mineral products. After the breakup of the Soviet Union, production fell precipitously, and recovery of the mining sector was considered critical for the country's economic recovery. A 1999 law provided tax benefits for mining and metal industry firms for two and a half years. By 2000, the privatization of small-scale enterprises was virtually completed. The mining industry was a major source of waste, having accumulated 30 billion tons of mineral wastes.

ENERGY AND POWER

Ukraine has only modest reserves of oil and natural gas, but more robust reserves of coal.

As of 1 January 2004, Ukraine had proven oil reserves estimated at 395 million barrels, according to the Oil and Gas Journal. In 2003 and 2004, oil production was estimated at 86,800 barrels per day and 86,000 barrels per day, respectively. However, consumption outstripped output for both years. In 2003, demand for oil averaged an estimated 415,000 barrels per day, and at an estimated 422,000 barrels per day in 2004. Net imports of oil in 2003 were estimated at 328,200 barrels per day, and at an estimated 336,000 barrels per day in 2004. Imports in 2003 accounted for around 80% of demand, most of which came from Russia. Most of Ukraine's oil reserves are located in the eastern Dnieper-Donetsk basin.

Ukraine's six oil refineries have a combined crude oil refining capacity estimated as of 1 January 2004 at 1.05 million barrels per day. However, domestic consumption of refined oil products is just over 30% of capacity, and have even had problems securing enough crude oil to supply the country's needs.

Ukraine, as of 1 January 2004, had proven natural gas reserves estimated at 39.6 trillion cu ft, according to the Oil and Gas Journal. In 2003, natural gas production was estimated at 0.69 trillion cu ft, with consumption that year estimated at 3.03 trillion cu ft. As a result, Ukraine has had to resort to imports to make up the difference. In 2003, net imports of natural gas were estimated at 2.34 trillion cu ft. Turkmenistan has become its primary source for natural gas imports, following an agreement signed in 2001 that calls for 8.8 trillion cu ft per year to be provided from 2002 to 2006.

In 2004, Ukraine had coal reserves estimated at 37.6 billion short tons, of which 17.9 billion short tons consisted of anthracite and bituminous coal, and 19.7 billion short tons consisted of sub-bituminous coal and lignite. In 2003, coal production was estimated at 63.5 million short tons. However, demand for coal that year totaled 67 billion short tons, making Ukraine a net importer of coal. Most of the country's coal comes from the eastern region in the Donetsk/Donbas basin.

Ukraine's electric power generating capacity in 2002 totaled 52.811 million kW, of which conventional thermal plants accounted for 36.241 million kW of capacity, and nuclear power 11.835 million kW. Hydroelectric capacity in that year accounted for 4.731 million kW of capacity and geothermal/other 0.004 million kW. Electric power output in 2002 totaled 163.870 billion kWh, of which conventional thermal fueled plants provided 80.777 billion kWh, followed by nuclear plants with 73.380 billion kWh, hydroelectric with 9.691 billion kWh, and geothermal/other with 0.022 billion kWh. In 2003, electric power output rose to an estimated 177 billion kWh. Demand for electricity in 2002 totaled 149.284 billion kWh. In 2003, consumption rose to an estimated 156 billion kWh. As of January 2005, Ukraine had four nuclear power plants in operation, providing 40% of the country's electric power.

INDUSTRY

Ukraine, with strong scientific and technological sectors, is a major producer of heavy machinery and industrial equipment for sectors including mining, steelmaking, and chemicals. Significant products also include nonnumerically controlled machine tools, large electrical transformers, and agricultural machinery. Ukraine's industries are important suppliers of products—including automobiles, clothing, foodstuffs, timber, and paper—to other former Soviet republics. Ukraine also retains much of the industry associated with the space program of the former USSR. Industry accounted for 40% of GDP in 2000, and the industrial production growth rate for 2001 was 14.2%. Industrial sectors slated for growth in the early 2000s were food processing and packing, textiles, woodworking, furniture and building materials, automotive parts, pharmaceuticals, medical equipment, and aerospace. The construction sector experienced growth during that period; construction spending grew by 9% in the first quarter of 2001. Ukraine produced 31,824 automobiles in 2001, and 1,417 heavy trucks in 2000, a 74% increase over 1999.

In 2004, the representation of industry in the GDP grew to 45.1%, while its representation in the labor force was 32%; agriculture made up 18% of the economy and 24% of the labor force, while services came in second with a 36.9% representation in the GDP and 44% in the labor force. The industrial production growth rate was 16.5% in 2004, with the fastest growing industries being: machine building (which registered a 30.7% growth as opposed to the previous year), construction (23.8%), wood processing, paper and printing (26%), processing industry (15.5%), and light industry (14%).

SCIENCE AND TECHNOLOGY

The Ukrainian Academy of Sciences, founded in 1919, has sections of physical engineering and mathematical sciences, and chemical engineering and biological sciences; it has 66 scientific and technical research institutes attached to it. The Ukrainian Academy of Agrarian Sciences has 13 research institutes, and the Ukrainian Academy of Medical Sciences has six research institutes. All three academies are headquartered in Kiev. A botanical museum is located in Kiev. Ukraine has 92 universities, polytechnics, and institutes that offer courses in basic and applied sciences. In 1987–97, science and engineering students accounted for 42% of university enrollment. In 2002, research and development (R&D) expenditures totaled $2,805.687 million, or 1.18% of GDP. Of that amount, government provided the largest portion at 37.4%, followed by the business sector at 33.4%, foreign sources at 26.2%, higher education and private nonprofit organizations at 0.4% each, with 2.3% listed as undistributed. In that same year, there were 1,749 scientists and engineers, and 456 technicians engaged in R&D per million people. High technology exports in 2002 were valued at $572 million, accounting for 5% of the country's manufactured exports.

DOMESTIC TRADE

As of 2002, nearly all of the previously state-owned retail establishments have been privatized. Chain stores, supermarkets, and brand-name specialty stores, many of which are owned by Ukrainians, have become more common in major cities. Department stores, smaller grocery and specialty stores, and bazaars are more common since prices at these establishments are more in line with lower and middle-class spending capabilities. About 40–60% of consumer goods are domestically produced. There are some successful foreign franchises, but the practice of franchising has not become widespread. A value-added tax of 20% applies to most goods and services.

FOREIGN TRADE

Ukraine exports products to 140 countries of the world. Its main export products are ferrous metals and metal products, engines, transport and mechanical equipment, chemicals, and vehicles. Top import items include mineral products, automobiles, transportation equipment, chemicals, and textiles. Ukraine relies heavily on trade, particularly with the other former Soviet republics, although not nearly as much as it had before the breakup. Interrepublic trade accounted for 73% of its total imports in 1988 and 85% of its total exports. In 1991, imports from the other republics equaled 26% of GDP and exports to them amounted to 25% of GDP. However, trade with former USSR states has since rebounded, with Ukraine taking in 59% of its imports from them and selling 33% of its exports to them in 2000.

In 1991/92, inter-republic trade contracted severely, partly due to a breakdown in payment mechanisms, and trade with other countries dropped as well. Much of Ukraine's foreign trade has been carried out in the context of intergovernmental agreements. However, the government has since stabilized its foreign trade. In

2000, total imports were valued at $14 billion, and total exports at $14.6 billion. Ukraine trades heavily with the other former Soviet republics, and since 1993 has had extensive trade ties with China.

In 2004, exports totaled $32.9 billion and imports $31.4 billion, making Ukraine one of the few countries in the region with a positive trade balance. Export commodities include ferrous and nonferrous metals, fuel and petroleum products, chemicals, machinery and transport equipment, and food products. The main export partners were Russia (where 18% of all exports went), Germany (5.8%), Turkey (5.7%), Italy (5%), and the United States (4.6%). Imports included energy, chemicals, machinery and equipment, and they mainly came from Russia (41.8%), Germany (9.6%), and Turkmenistan (6.7%). The current account balance in 2004 was $4.6 billion.

BALANCE OF PAYMENTS

The financial crisis of 1998 caused a large outflow of capital, and reserves fell to less than a third of their level in 1997. Due to a major exchange rate adjustment that made Ukrainian products more competitive in both external and internal markets, reserves recovered somewhat in 1999. From June 2000 to July 2001, reserves increased dramatically, back to pre-1998 levels. This growth is surprising in light of the fact that the country has received almost no external funding since 1998, when foreign investors began avoiding Ukraine. Following the 1998 devaluation of the hryvnia, trade surpluses drove the growth in reserves, and the balance of payments situation improved. Reserve growth also improved due to Ukraine's default on its sovereign debt. As of the early 2000s, Ukraine's balance of payments position was expected to be heavily influenced by its trade with Russia.

The US Central Intelligence Agency (CIA) reported that in 2001 the purchasing power parity of Ukraine's exports was $17.3 billion while imports totaled $17.1 billion resulting in a trade surplus of $200 million. The International Monetary Fund (IMF) reported that in 2001 Ukraine had exports of goods totaling $17.1 billion and imports totaling $16.9 billion. The services credit totaled $4 billion and debit $3.58 billion.

The exports of good and services increased steadily, growing from $28.9 billion in 2003, to 39.7 billion in 2004. At the same time, exports managed to stay above the level of imports, establishing Ukraine as one of the few export driven economies in the region. Imports of goods and services totaled 27.6 billion in 2003, and 34.8 billion in 2004, giving Ukraine a positive resource balance in both years: 1.3 billion and 4.9 billion respectively. Its reserves (including gold) grew from 6.9 billion in 2003 to 9.5 billion in 2004, covering almost four months of imports.

BANKING AND SECURITIES

The National Bank of Ukraine (NBU) is the country's national bank and was established in June 1991. It has since assumed the function of a central bank. The commercial banking sector is dominated by the big five banks of Prominvest Bank, Ukrania, Ukreximbank, Eximbank and Oshadbank. Of these, Ukreximbank and Oshchadbank remain state controlled. As of 2001, Ukraine had 195 banks, but of these, only 153 remained in operation. Of these banks, approximately a quarter have foreign exchange licenses, and one-third are members of the Ukrainian Interbank Currency Exchange. It is generally acknowledged that Ukraine has too many banks and that there will be numerous mergers and failures in the coming years. In 1995 alone more than 20 banks went out of business, almost 80 changed ownership, and only eight new banks entered the market. Foreign banks, however, have been slow to enter the market.

The NBU implements monetary control through reserve requirements and the interest rates it charges banks on funds transferred from the state savings bank. Before November 1992, the NBU was able to obtain additional rubles by running a surplus on transactions with other republics in the ruble zone. However, with inflation accelerating since early 1991, the supply of rubles proved insufficient to meet the economy's needs, and Ukraine consequently resorted to the use of coupons. The resulting rise in inflation was the main factor behind Ukraine's enforced departure from the ruble zone in November 1992.

The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $5.5 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $8.4 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 16.57%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 12.5%.

The Law on Securities and the Stock Exchange came into effect in January 1992. There are seven stock exchanges and seven commodities exchanges, although these are more like the auction houses that sprang up after the collapse of the Soviet Union in 1991 as conduits for goods rather than the securities exchanges found in the West. Capital markets are undeveloped even by the standards of countries such as Russia. The Ukrainian Stock Exchange (USE), established in 1992, acts to coordinate primary and secondary market trading of Ukrainian securities. In 2001, the exchange had 131 companies listed and total market capitalization of $1.4 billion. Trading value was $226 million, with a turnover ratio of 13.9%. As of 2004, there were 155 companies listed with the country's First Securities Trading System (PFTS), which had a market capitalization of $11.778 billion. Trading value in that year totaled $201 million, with a turnover ratio of 2.5%.

INSURANCE

Among the insurance companies operating in Ukraine in 1997 were: Asko-Kiev Central Insurance Co.; Factotum Joint-Stock Insurance Co., First International Insurance Group; Ometa-Inster Joint-Stock Insurance Co.; Skide Insurance Co.; and Slavia. Beginning in August 1998, the Ukrainian government required that foreign visitors purchase mandatory "emergency medical insurance" from the Ukrainian State Insurance Company. In addition, personal accident insurance is required for all passengers on public transportation. Foreign shareholders in insurance companies may not exceed 49%. In 2003, the value of all direct insurance premiums written totaled $1.712 billion, of which nonlife premiums accounted for $1.699 billion. In that same year, Lemma was the top nonlife insurer, with gross written nonlife premiums for direct business only of $124.8 million, while Grawe Ukraina was the country's leading life insurer, with gross written life insurance premiums of $4.8 million.

PUBLIC FINANCE

Ukraine has displayed positive growth in recent years, but long term growth will require certain market reforms. The economy is burdened by excessive government regulation, and major sectors such as energy and telecommunications remain to be privatized. Corporate governance is weak, and corruption is rampant. In the early 2000s, the government sought ways to reform the tax code to eliminate corruption and legitimize economic activity. Ukraine receives aid from the IMF, although the relationship between those two entities has not always been successful; Ukraine has had problems adhering to IMF monetary conditions.

The US Central Intelligence Agency (CIA) estimated that in 2005 Ukraine's central government took in revenues of approximately

$22.9 billion and had expenditures of $24.4 billion. Revenues minus expenditures totaled approximately -$1.5 billion. Public debt in 2005 amounted to 20.5% of GDP. Total external debt was $33.93 billion.

The International Monetary Fund (IMF) reported that in 2002, the most recent year for which it had data, central government revenues were hrn69,252 million and expenditures were hrn69,028 million. The value of revenues was us$13,001 million and expenditures us$12,959 million, based on an exchange rate for 2002 of us$1 = hrn5.3266 as reported by the IMF. Government outlays by function were as follows: general public services, 22.8%; defense, 5.1%; public order and safety, 6.8%; economic affairs, 9.7%; housing and community amenities, 0.1%; health, 3.1%; recreation, culture, and religion, 0.6%; education, 7.2%; and social protection, 44.7%.

TAXATION

In 1997/98 Ukraine reformed its tax system. As of 2005, the standard corporate tax rate was 25%, although preferential regimes are available for special economic zones. Capital gains for companies are taxed at the corporate rate. Withholding taxes on income from royalties and interest is 15%. Companies distributing dividends to residents and nonresidents are required to pay a 25% advance tax on the dividends. The tax can then be credited against the company's profits.

Personal income is taxed at a flat 13% rate. Capital gains received by individuals are subject to a 13% withholding tax. Dividends received by resident and nonresident individuals are subject to a 15% withholding tax.

The Ukraine's main indirect tax is its value-added tax (VAT), with a standard rate of 20%. A 0% VAT rate applies to exports and international transportation services. Some medicines, baby food, educational, medical and insurance services, and the sale of land are also exempt.

CUSTOMS AND DUTIES

Import licenses are required for all foreign trade activities in Ukraine. Ukraine has signed trade agreements with the United States, Russia, Iran, Turkmenistan, the United Arab Emirates, and several other former Soviet republics. As of 2002, tariffs on imports range from 0–20%, with the tariff on automobiles being the highest. Preferential tariffs are given to developing countries and privileged tariffs are given to countries that have trade agreements with Ukraine. Other duties include a 20% VAT and excise taxes (up to 300%). In 2000, the number of categories of goods eligible for excise tax was reduced from 20 to five: alcohol, automobiles, jewelry, oil products, and tobacco.

FOREIGN INVESTMENT

Among the transitional economies of Eastern Europe, nowhere has the gap between economic potential and economic performance been wider than in the Ukraine, and nowhere has the gap been more glaring than in the foreign investment statistics. By 2000, total foreign direct investment (FDI) in the Ukraine was still less than $4 billion, compared with $40 billion that had flowed into Poland and $20 billion into Hungary during the same period.

Independence was first greeted by a rush of inward investment. In 1991, the number of joint ventures operating in Ukraine rose from 76 in October 1990 to 189 in October 1991. Following the enactment in March 1992 of a more favorable foreign investment law, joint ventures jumped to 1,400 early in 1993. Most of these ventures were in industry, with a few engaged in foreign trade. The government's 1993 economic plan included tax incentives and other benefits for investors in specific areas including agro-industrial enterprises, energy, and production of consumer goods. However, by 1996 and 1997, rampant official graft and corruption were crippling foreign investment. Several significant multinational corporations withdrew from Ukraine after government decrees were issued that steered business to state-owned firms in which government officials were stakeholders. This action occurred despite the Foreign Investment Law of 1996, which purported to put foreign investors on an equal footing with Ukrainian nationals, and President Kuchma's pledge to battle corruption. The government had declared a need for $40 billion in foreign investment, but only $2.8 billion was invested between 1992 and 1998.

In 1997 the law "On Special (Free) Economic Zones" was adopted, establishing three types of special investment zones: free economic zones (FEZs), territories with a special investment regime (SEZs), and territories of priority development (TPDs). As of 2002, there were nine TPDs and eleven FEZs and SEZs. In 2002, the special zones attracted investment totaling $909 million, both domestic and foreign, but pressure has been brought by the IMF to either eliminate the special zones or curb their tax and regulatory exemptions.

Annual foreign direct investment (FDI) inflow peaked at $747 billion in 1998, up from $623 billion in 1997, before falling to $471 billion in 1999 in the wake of the Russian financial crisis. FDI inflow recovered to $593 billion in 2000, but then fell back to $531 million in the global economic slowdown of 2001. Contrary to the worldwide trend of reduced FDI flow after the 11 September 2001 terrorist attacks, the Ukraine had its best year since independence, with inflow increasing over 15% to an estimated $738.7 million in 2002. As of October 2002, total FDI since 1992 amounted to almost $5 billion.

As of 1 October 2002, according the Ukraine State Statistics Committee, FDI had come from 112 countries. The United States remained the largest source of FDI, with $843 million or 17% of the total. US-based sources were also probably involved in some of the FDI flows from Cyprus (11% of the total) and the British Virgin Islands (6.4%). The United Kingdom accounted for 9.5% of total FDI in the Ukraine since 1992; the Netherlands, 7.8%; the Russian Federation, 6.5%; Germany, 5%; Switzerland, 4.2%; Austria, 3.9%; and Korea, 3.5%. The remaining 24.2% came from 102 other countries. Per capita FDI stock increased from $78 at the end of 2000 to $102 at the beginning of October 2002.

In 2004, Ukraine was a much more attractive market for foreign investments, receiving $1.4 billion of direct FDI—an increase of 22% from the previous year. Most of this investment went to production machinery and equipment, with food processing, agricultural processing, machine building, coal, oil and gas, and light industry being other important recipients of foreign funds. This growth however was well under the potential of the Ukrainian market, especially if one considers that in the same year, its neighbor, Romania, received over 5 billion in direct FDI. At the end of 2004, the level of foreign investment since 1992 rose to 7.7 billion—ten times as low as the same figure in Poland. Major investors in 2004 included: Cyprus (14.1%), the United States (13.6%), the United Kingdom (10.4%), Germany (7.1%), the Netherlands (6.8%), Virgin Islands (6.1%), Russia (5.5%), Switzerland (4.9%), and Austria (4%).

ECONOMIC DEVELOPMENT

In 1993, Ukraine's parliament tentatively approved a new economic reform plan to stabilize the republic's economy, attract more capital from abroad, and lay the groundwork for a market economy. Measures proposed included stricter monetary and banking regulation, and the elimination of monopolies in industries. A privatization program was underway in sectors including retail trade, services, the food industry, agriculture, and housing.

Since the election of President Kuchma in 1994, the government has implemented a far-reaching economic reform program. Almost all price and trade controls have been abolished in an effort to stabilize the new market economy. Privatization began in earnest in 1995, and a new convertible currency was adopted in 1996. In the 1990s, Ukraine continued to register negative growth. By the end of the 1990s, real gross domestic product (GDP) declined to 40% of its pre-independence level. In late 1998, the International Monetary Fund (IMF) loaned Ukraine another $2.2 billion after Ukraine promised to introduce more fiscal discipline.

The economy started to grow in 2000; GDP growth in 2002 was over 4.5%. Small- and medium-sized enterprises were privatized by 2002, but the energy and telecommunications sectors had yet to be privatized. The government passed a foreign investment law, but bureaucratic hurdles, poor corporate governance, corruption, and the weak enforcement of contract law by courts all hamper investment. At the end of October 2002, total foreign direct investment into the country amounted to around $4.9 billion, which was one of the lowest figures in the region. In 2002, land reforms were ongoing, supporting growth in the agricultural sector.

The economy took off in 2003 and 2004, and was deemed one of the most dynamic in Europe (the GDP growth rate in 2004 was 12.1%). The election of Viktor Yushchenko at the end of 2004, and the political turmoil that preceded it, hampered this expansive pulse. The new president stated however that the country is on the right path and that the economy will start booming again. Ukraine boasts a highly qualified work force, cheap labor and competitive costs, a relatively well-developed transportation and communications infrastructure, and a strategic geographic location. In addition, the large market—47 million people—makes it a prime location for foreign investment.

SOCIAL DEVELOPMENT

The social security system provides all employees with old age, disability, and survivor's pensions. The program is funded primarily from employer contributions, with a small contribution from employees and government subsidies as needed. Retirement is normally at age 60 for men and 55 for women, although this is reduced by five years for those engaged in arduous work and mothers with five or more children. There is a dual system of medical benefits. Cash benefits for sickness are provided for employed persons, while a universal medical care system exists for all residents. Maternity benefits of 100% of wages for 70 days before and 56 days after the expected date of childbirth are payable to all employed women. Workers' compensation and unemployment benefits are also provided. Special provisions exist for Chernobyl victims. Family allowances are provided to families with large numbers of children.

The law provides women with the same employment rights as men, although they rarely attain high-level managerial or political positions. Women who are employed mostly work in low-paying jobs or in industries that have trouble paying their employees on time. Help wanted ads often specify gender. Violence against women, domestic abuse, and sexual harassment in the workplace are pervasive.

Human rights violations continue. Harassment of racial minorities and religious intolerance are increasing problems. Anti-Semitic incidents and societal discrimination of ethnic minorities are commonplace. The Roma population is subject to abuse by police and general intolerance by the public. Prisoners are mistreated by authorities and live in substandard conditions. The government interferes with freedom of the press and with the electoral process.

HEALTH

Deterioration of the economy and declining living standards have had a negative impact on birth and mortality rates and women's and children's health standards need much improvement. Although safe water was available to 96.5%, proper sanitation was available to only 70% of the urban population and 8% of the rural population in the mid-1990s. Poor nutrition is another major problem in the Ukraine, and a shortage of basic supplies exacerbates the health care situation.

The country has established 156 independent children's hospitals. Altogether there were a total of 700,000 hospital beds. In addition, there were 6,500 outpatient polyclinical institutions. As of 2004, there were an estimated 297 physicians, 766 nurses, and 39 dentists per 100,000 people.

Infant mortality was reported at 10.11 per 1,000 live births in 2005. Life expectancy was 69.68 years in 2005. As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 10 and 16 per 1,000 people. Immunization rates for children up to one year old were: tuberculosis, 95%; diphtheria, pertussis, and tetanus, 96%; polio, 97%; and measles, 97%.

The leading causes of death were cardiovascular and respiratory diseases, cancer, traumas, and accidents. The HIV/AIDS prevalence was 1.40 per 100 adults in 2003. As of 2004, there were approximately 360,000 people living with HIV/AIDS in the country. There were an estimated 20,000 deaths from AIDS in 2003.

The likelihood of dying after age 65 of heart disease in Ukraine was below the average for medium human development as defined by the World Bank. In the mid-1990s, that rate exceeded 300 per 1,000 for men and 295 per 1,000 for women. On the other hand, cancer rates for men were higher. Death after age 65 from cancer was 133 per 1,000 people in the mid-1990s.

HOUSING

Before 1994, most housing and utility costs were covered by the government through a policy which was causing major federal debt. Through an IMF approved program of economic reforms put in place in October 1994, residents were asked to contribute a much greater amount toward there own rent and utilities. Unfortunately, many households were unable to do so. An average three-person household, living in a three-room flat of about 500 sq m (5,381.96 sq ft) was charged expenses of about $30 per month. The average monthly income of such a family was $50. In 1995, the government put in place a subsidy program to assist low-income families in meeting rising housing costs, but funding for housing continues to be a problem.

At the 2001 census, there were 18,200,567 households counted representing 47,726,518 people. About 44% of all households lived in individual houses; another 44.6% lived in a separate apartment unit. The average amount of living space was 14 sq m (150.69 sq ft) per person.

EDUCATION

Most schools are state run. Education is compulsory for nine years, with students starting at age six or seven. These first nine years are completed through four years of elementary school and five years of lower secondary school. Students may continue in general secondary schools offering two- or three-year courses of study, or a specialized education secondary program of about three years. Vocational programs of four or five years are also available at the secondary level. While Ukrainian is the most commonly taught language and medium of instruction, other languages, such as Russian, Hungarian, Polish, Moldovan, or Crimean-Tatar, are offered based on the ethnic composition of the particular school district. The academic year runs from September to June.

In 2001, about 52% of children between the ages of three and six were enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 84% of age-eligible students. The same year, secondary school enrollment was about 85% of age-eligible students. It is estimated that about 97.6% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 19:1 in 2003; the ratio for secondary school was about 13:1.

There are over 900 colleges, technical schools, vocational schools, universities, and other institutes of higher education. The Kyiv-Mohyla Academy was founded in 1632. Other universities are: Lviv University (1795), Kharkiv University (1804), Taras Shevchenko National University (1834), Odessa University (1868). In 2003, it was estimated that about 62% of the tertiary age population were enrolled in tertiary education programs. The adult literacy rate for 2004 was estimated at about 99.4%.

As of 2003, public expenditure on education was estimated at 5.4% of GDP, or 20.3% of total government expenditures.

LIBRARIES AND MUSEUMS

The largest library in the country is the Vernadsky National Library of Ukraine in Kiev, which holds over 15 million items, including the collection of the Presidents of Ukraine, archive copies of Ukrainian printed documents from 1917, and the archives of the National Academy of Sciences of Ukraine. The National Parliamentary Library of Ukraine in Kiev holds 65,000 volumes. Also in Kiev, the National Library of Ukraine for Children has a collection of over 440,000 volumes. Other large collections include the V.G. Korolenko State Scientific Library with 6.7 million volumes and the libraries at Lviv Polytechnic University (3 million), Franko State University in Lviv (2.5 million), Shevchenko Kiev University (2.7 million), and Kiev Polytechnic Institute (2.5 million). There are reported to be about 21,857 public libraries operating in Ukraine with an overall stock of about 336.7 million books.

Kiev has the Kiev State Museum of Russian Art, the Kiev State Museum of Ukrainian Art, the State Historical Museum, the Museum of Cultural Heritage, the National Museum of Medicine, the State Museum of Ukrainian Decorative Folk Art, and the Soros Center for Contemporary Art. There are also several small house museums in Kiev. There is a Museum of Fine Arts in Lugansk. Lviv houses the State Museum of Ethnography and Arts and Crafts and the Literary Museum of Ivan Franko. Odessa is home to the Odessa Museum of Fine Arts, the Museum of Literature, the Naval Museum, the Odessa Museum of Western and Oriental Art, the Odessa Archaeological Museum, and the Pushkin Museum.

MEDIA

In 2003, there were an estimated 216 mainline telephones for every 1,000 people; over 2 million people were on a waiting list for telephone service installation. The same year, there were approximately 136 mobile phones in use for every 1,000 people.

Most broadcast media is state-owned or controlled by political parties or other powerful business interests. In 2004, there were six national television stations. While there are many privately-owned radio and television stations, they are generally heavily influenced by the government and political parties. In 2000, there were 456 television sets for every 1,000 people. In 2003, there were an estimated 889 radios for every 1,000 people. The same year, there were 19 personal computers for every 1,000 people and 19 of every 1,000 people had access to the Internet. There were 53 secure Internet servers in the country in 2004.

Among the leading newspapers (with 2005 daily circulation) are: Segodnya (published in Russian, 849,000 circulation), Fakty I Commentarii (published in Russian, 761,000 circulation), Silski Visti (Ukrainian, 537,000), Vecherniye Vesti (Russian, 500,000),Ukrayina Moloda (Ukrainian, 163,000), and Den (Russian and Ukrainian, 62,500).

The constitution and a 1991 law provide for free speech and a free press. Criticism of the government is said to be tolerated, though some journalists practice self-censorship because of occasional pressures from the government.

ORGANIZATIONS

The Ukraine Chamber of Commerce and the Congress of Business Circles of Ukraine promotes the commercial and business activities of the country to the rest of the world. Many of Ukraine's trade unions belong to the umbrella organization called the Federation of Independent Trade Unions. Professional associations are active in several different fields. There is an active Ukrainian Consumers' Association.

National cultural organizations include the Ukrainian Cultural Educational Organization and Flamenko, which promotes cultural exchange programs. National youth organizations include the Council of Ukrainian Students, the Ukrainian Fund of International Youth Cooperation, Junior Chamber, Ukrainian Girl Guides and Girls Scouts Association, the Compass Club, and YMCA/YWCA. There are several sports associations promoting amateur competition for athletes of all ages.

National social action organizations include the Ukrainian Center for Human Rights, the Ukrainian Environmental Association, the Ukrainian Legal Foundation, Freedom House (advocating the development of democratic institutions), The Children's Fund, and Zhinocha Hromada, an organization focused on encouraging women to be active in economic and community development. International organizations with national chapters include Caritas, UNICEF, Amnesty International, and the Red Cross.

TOURISM, TRAVEL, AND RECREATION

Kiev, Ukraine's major cultural center, is known for its beautiful churches and golden-domed cathedrals, although much of its classic architecture was destroyed or obscured by Communist planners in the 1930s. The cathedral of St. Sophia, built in the 11th century, is one of the finest examples of Russo-Byzantine architecture. Another major tourist attraction is the Golden Gate, an 11th-century fortification restored in 1982. Lviv (formerly Lvov) offers architectural sights ranging from late-13th-century Russian to 16th-century Gothic structures.

In 2003, about 12.5 million visitors arrived in Ukraine, over 5 million of whom came from Russia. There were 32,572 hotel rooms with 86,243 beds and an occupancy rate of 30%. Travelers stayed in Ukraine an average of three nights per trip. Tourism expenditure receipts totaled $1.2 billion. A valid passport is required for all travelers to enter Ukraine. Visas are not required for citizens of Japan, Canada, Switzerland, Liechtenstein, the United States, and the European Union countries, for stays of up to 90 days. To visit the nation, all other travelers need a visa. Medical insurance which covers Ukraine is required for all US citizens.

According to 2005 estimates from the US Department of State, the cost of staying in Kiev was $271 per day, other areas were less at $177 per day.

FAMOUS UKRAINIANS

Leonid M. Kravchuk and Vitold P. Fokin were respectively the first president and prime minister of Ukraine. Leonid Brezhnev (Dneprodzershinsk, Ukraine, 1906–82) led the Soviet Union from 1966–82. Outstanding representatives of the culture and literature of Ukraine include poet Taras Shevchenko (1814–61) and the Jewish writer Sholom Aleichem (Solomon Rabinowitz, 1859–1916).

DEPENDENCIES

Ukraine has no territories or colonies.

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