Expert’s view of the social and economic crisis in Ukraine

16 september 2014

The Analytical Center has prepared the report on the causes of the social and economic crisis in Ukraine.

After 23 years of independent existence of Ukraine instead of sustainable growth, severe social and political crisis is observed. Democratic processes, social and economic reforms occurred to be dependent on the intricacies and coalitions of oligarchs. Uneven social development in the regions played a huge role in the processes. The industrial regions of the West of the country and the less developed regions of the East kept their own unique and significant differences in social and cultural identity. According to the experts, after almost the quarter of the century of the ongoing severe political and economic battle, the crisis uncovered itself. The report claims that, to greater extent, the crisis is the result of the long term social and economic difficulties in the country’s development and occurred at an extremely difficult moment for its economy, providing less chance for a sustainable growth. 

According to the experts, the whole generation of the country did not have a chance to experience a successful or at least sustainable economic growth, therefore, there were fewer perspectives for development and the situation caused high level migration from both western and eastern regions of the country. As for the foreign trade of Ukraine, the experts see the balance between Russia and Europe. As it is reported, the key difference between these largest trade and economic partners of the country is in the structure of trade balances and possible trade conflicts between Ukraine and Russia may be harmful for both.

Uneven development throughout the regions of Ukraine is one of the key issues in the development of the country as a whole. Experts believe that the support for the development of certain regions solely depends on the preferences that authorities have. In the middle of 2000s there was a great redistribution of funds in favor of Kiev that had concentrated a great number of country’s services while having small population.  

For more information on the structural problems in economy, foreign trade and the development of the Ukrainian regions and aggravation of economic crisis in 2014, please, read in the analytical report “Social and economic crisis in Ukraine”.