1. East European countries outside Russia1

2. State of economic development of Ukraine among the post-Soviet countries2 2 2

3. Strong economic ties to Russia
Ukraine, Belarus, Georgia and Armenia
SU times: countries were tied closely together
After transition: prefer greater independence
Old connections hard to break
Eastern UA: most important iron and steelmaking region  industries depend on: import oil and natural gas (mainly from Russia)  85% energy needs
BY: heavy industry  50% of trade with Russia
New connections difficult to form
SU: developed heavy industry  equipment was not kept up to date

4. Ukraine: main supplier of food
Till 1970’s: belonged to the growth poles of the SU
Main supplier of food and heavy industrial centre
Share in the SU: 18,5% of population, 26% of coal production, 36% of iron industry
Heavy industry: 80% of industrial employment, 90% of investments, 70% of production
Conservation of bad economic structure after transition
Role of heavy industry, agriculture remained
Critical dependency of oil and natural gas supply (from Russia, Kazakhstan and Turkmenistan)
Soviet connections are hard to break, out-of-date firms are not competitive
Economic lagging
Per capita GDP, 1990: 4700$ (94% of the SU average of the former SU)  mid-position in the rank
Living conditions (living area, salaries of employees, savings): also under the post-Soviet average 4 4 4

5. Ukrainian Employment Ukrainian employment Manpower: 22.3 mn
But: unemployment rate: 7-8%
Rate of skilled workers: 50%
But: lack of management
Sectoral composition:
Employment: A: 25%, I: 20%, S: 55%
GDP: A: 17% I: 43% S: 40%
But: rising global prices for steel
2005: important changes 5 5 5

6. Economic Geography of Ukraine
Regional differences
East: Russian minority, heavy industry  more developed
West: Ukrainian majority, Hungarian, Polish, Romanian minority
Regional development inequalities 2010 6 6 6

7. Better state of Belorussian economy
Russian: main trading partner
1991: Russian – Belarusian Federation
Cheap Russian oil and natural gas  vulnerable

8. Southern Caucasus (Transcaucasus)
Georgia, Armenia
Mountainous (peaks above 5000 m)
Georgia: East Orthodoxy, Armenia: autocephaly Christianity
Azerbaijan
More flat (Caspian Sea coast: areas below sea level)
Muslim  stronger linkages towards Asia
Historical states
BC 100: historic Armenia: also East part of contemporary Turkey (mount Ararat)
From the AD 1000 to 1200: Georgia
Turkish occupancy
Russian rulers till 1991 8 8 8

9. Economy of Southern Caucasus
In SU times (till 1991)
Georgia: 90% of SU’s tea and citrus fruits
Armenia: fruits (mainly grapes)
2000s: steadily improved
Economies suffered greatly from the ethnic conflicts
Increasing industrial and service sectors
Black Sea: SE part of ex-’Soviet Riviera’ (Batumi, Suchumi)
Developing trading relationship with US, EU and Iran
Georgia: reduction dependency on Russia 9 9 9

10. Ethnic conflicts in Caucasus Region
Economic and cultural similarities: mountaineer identity
Ethnically and linguistically one of the most complex area of the World: Christians and Muslims
Russian control from mid 1800s
Soviets divided minorities
Karbardians (have more in common with Cherkessians), but grouped together with Balkars
Division of Ossethians
Armenians in Azerbaijan (Nagorno-Karabakh)  War between 2 member states (Armenia and Azerbaijan) during the SU regime
Azeri Exclave: Nakhichevan