Sunday, May 27
Укр Eng
Log In Register
PoliticsNeighboursEconomicsSocietyCultureHistoryOpinionsArchivePhoto Gallery
29 August, 2011  ▪  The Ukrainian Week

1994-1998

Bagging the country

With a government that had no strategy for national development, economic reforms or European integration, and an opposition unable to offer reasonable alternative scenarios or exert pressure effectively on those in power, Ukraine ended up with an economy shaped by the logic of least resistance and quick profits. As a result, an oligarch system emerged, comprised of the following components: • Oligarchs used all kinds of tools including financial fraud, artificial debts and coercive pressure to grab or take under their control the juiciest, or at least potentially profitable objects, particularly steelworks and chemical plants that basically produced semi-finished components for other technological productions.

• This led to the subsequent distortion of the structure of Ukraine’s economy.

• Meanwhile, other industries, including engineering, hi-tech productions that needed huge investment before they could even compete at foreign markets, food and textile industries were decaying.

Even being swallowed by oligarch empires could hardly save them, since they turned into side businesses rather than central projects.

• SMEs remained neglected despite the favourable flat-rate tax system law passed in 1998. They had no access to cheap loans and real privatization, nor could they compete with oligarchs seeking control over medium-sized business, comprised of the food industry, farming, the hi-tech sector and others.

• The privileges lobbied by oligarchs for their businesses left gaps in the state budget. To cover them, the government increased tax pressure on businesses that had no such protection. This led to the inevitable decline of the investment climate in Ukraine.

• Ultimately, government decisions based on private interests rather than a comprehensive analysis of the situation were inefficient and often more troublesome than helpful.

In this section: 

The Dawn of the Oligarchs

The Triumph of Ruins

Ukrainian Oligarchs


Related publications:

  • On May 16, Ukrainian filmmaker currently jailed in Russia as a political prisoner went on a hunger strike. In a public letter he wrote that he would only stop the strike if all 64 Ukrainian prisoners jailed in Russia for politically-motivated grounds are released
    24 May, Stanislav Kozliuk
  • The opposition in Ukraine is mostly reactive and it chooses actions that will be most useful for criticizing the current Administration or gaining the attention of a specific part of the electorate. What Ukraine needs most right now is a consolidating program and a party that could present its own alternative for the country
    24 May, Oleksandr Kramar
  • The strange multiplication by division of political parties in Ukraine and their internecine infighting
    24 May, Denys Kazanskyi
  • Why are Ukrainian users more and more often finding themselves banned by Facebook?
    21 May, Yuriy Lapayev
  • How the Kerch bridge built by Russia blocks and threatens the ports in Mariupol and Berdiansk
    21 May, Denys Kazanskyi
  • Henryk Józewski represents some of the most interesting aspects in the Ukrainian-Polish history of the 20th century. What was his legacy as the voievode of Volyn and why he resigned on April 13, 1938
    21 May, Sviatoslav Lypovetsky
Copyright © Ukrainian Week LLC. All rights reserved.
Reprint or other commercial use of the site materials is allowed only with the editorial board permission.
Legal disclaimer Accessibility Privacy policy Terms of use Contact us