Economy of Ukraine
Ukraine's previously unstable political situation caused various problems for the economy. Since Victor Yushchenko has come into power several reforms have taken place and Ukraine's economy grew some 12.1% in the year 2004. Unfortunately high oil prices as well as an increase in inflation caused the economy of Ukraine to slow down in 2005.
Ukraine, the “breadbasket of the Soviet Union” is known as a major producer of wheat. Important crops in Ukraine include rye, flax, corn, barley, sugar beets, sunflowers and potatoes. Ukraine also has a large industrial concentration due to the many raw materials in the country as well as power resources. Materials which come out of the region are iron, manganese, coal, anthracite, aluminum, mercury, nickel, natural gas, oil, zinc, titanium and bauxite. Kharkiv, Donetsk, Luhansk, Dnipropetrovsk, Zaporzhizhya, Mariupol, Donetsk and Makiyivka are major industrial hubs in Ukraine whilst Vinnytsya and Zhytomyr are important agricultural locations. Industrial products from Ukraine include: steel, tractors, machinery, building materials, chemicals, consumer goods and fertilizers. The majority of Ukraine's trading takes place with Russia, Germany, Italy Belarus, China and Turkmenistan.
Foreign investment is another important aspect of Ukraine's economy, but is sadly not operating as it should. Unfortunately certain issues such as a poor banking system, changing tax and regulations, an underdeveloped legal system and so on have caused problems when it comes to investment. Another problem is that privatization lacks transparency in Ukraine, thus preventing foreign investment. Due to various laws and regulations, Ukraine is considered a difficult country in which to do business. Regulations, paperwork and extensive inspection regimes have also to a degree stifled private enterprise in Ukraine. Procedures to obtain permits for business in Ukraine are complicated and confusing, taking up much time and money.
Whilst Ukraine's economy has undergone various developments, there is still work to be done. As projects are implemented, Ukraine can look forward to an improved economy in the years to come.
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