The economy of Ukraine failed in the first years of independence. More than 40% of fixed capital was lost, GDP fell by 60%, investment in fixed assets fell by 80%. This recession has not been overcome yet. Let's compare: Belarus's GDP in the early years dropped by 20%. The level of 1990 of the year was overcome in the early years of the two thousandth, all enterprises, including agricultural ones, were preserved and working, many new ones were created, there was practically no unemployment (0,6%). Initially possessing less than Ukraine, resources and production capacity, Belarus is achieving higher economic indicators. According to 2010, GDP per capita in Belarus is 12,3 thousand US dollars, an increase compared to 1995 g. - 2,9 times; in Ukraine - 6 thousand US dollars, an increase compared to 1995 g. - 1,5 times. The average salary currently in Belarus is $ 544, in Ukraine - $ 394.
But, most importantly, the economy of Ukraine is not developing. In all countries during periods of economic transformations, rapid growth occurred (USSR, Germany, Japan, China, etc.). Nothing of the kind is observed in Ukraine. After the catastrophic decline of the 90s, sluggish growth is occurring with depletion of the economic structure. The gross value added created in industry in 1991 was 36% of GDP, and in 2010 it was 27,1%. Mechanical engineering and metalworking in the volume of industrial production in 1991 were 26,4%, in 2011, 11,6%; light industry in 1991 g. - 12,3%, in 2011 g. - 0,7%. Many high-tech industries such as aircraft manufacturing, shipbuilding, turbines, synthetic diamonds and tools made of them, electronic devices, etc., have disappeared or are living out over the last few years. 5%). Ukraine is losing revenue even on the transit of oil and gas, whose pipeline systems are left from the USSR. Oil transit has shrunk to 6% power, gas transit has halved, and they continue to fall. There was no such destruction even as a result of the war. Already after 4,1 years after the war, in 25, the volume of industrial output of the Ukrainian SSR was in 10 times the prewar level. And now, after reaching the “independence” 1955 years have passed, and the initial volumes have not yet been reached [2,2].
There are obvious de-industrialization and degradation of the economy of Ukraine. Statistics and the media ignore the fact that Ukraine is experiencing huge unemployment. Officially considered 8%. But they do not include farmers in need of work. They somehow feed on household plots, but they have no money for other needs, including social, living and cultural ones. It would be necessary to take into account also the common part-time employment. From job security, you can add from 5 to 7 million people working abroad. In total, more than 23% of the economically active population was not provided with work. Compared with Spain or Greece!
The population of the country decreases, life expectancy does not increase. Back in the early 90s, the population was 52,2 million. Now 45 million. The Institute for Demography and Social Research predicts up to 2050 36 million . But this will not happen, since the population will leave the country.
There is a decline in all areas.
Characterized by indicators of food-producing agriculture.
1 table. Production of livestock products per capita
Product 1990 2011
Meat and meat products 84 47
472 Milk 247
As you can see, the decrease is almost 2 times. The consumption of livestock products per capita  has decreased accordingly:
2 table. Consumption of livestock products per capita of Ukraine, kg
Product 1990 2011
Meat and meat products 68 51
Milk and Dairy 373 205
Falling capital equipment of agriculture:
3 table. Capital equipment of agriculture in Ukraine
1990 g. 2011 g. Reduction in%
Tractors, thousand pcs. 495 147 -70
Combine harvesters, thousand pieces. 107 32 -70
Trucks, thousand pieces. 296 101 -65,8
Cattle, thousand heads 24623 4426 -82,0
including 8378 cows 2582 -69,2
Pigs, thousands of heads 19427 7373 -62,0
Sheep and goats, thousand heads 8419 1739 -79,3
Calculations show a decrease of 70-80%. And how many destroyed farms, dismantled irrigation systems, repair equipment, etc.! The number of cows continues to decline annually. The stores sell counterfeit milk and dairy products (with palm oil, etc.) Imported meat of dubious origin and quality is imported. For Ukraine, which used to be proud of their lands and could feed the entire continent, this is a shame!
Internal causes of crises
Ukraine suffered two economic crises: the 90's and 2008-2009's. With 2012, the third crisis unfolds. And in front we can expect another serious crisis arising from the conditions for the upcoming entry of Ukraine into the zone of "free" trade with the EU. The crises of 2008 and 2013 have been affected by waves of global crisis. However, it is wrong to blame Ukraine’s economic crises. The main causes of all crises in Ukraine are of internal nature.
We have already talked about economic losses in 90 in the beginning of this article. This catastrophic crisis arose due to the wrong approach to reforms. The aspiration to destroy everything quickly prevailed. The entire system of economic management was broken, large industrial and technological complexes were broken down, enterprises were fragmented, and collective large enterprises in agriculture were liquidated. Hasty privatization and liberal permissiveness led to the plundering and liquidation of many enterprises. Hastily created a completely different monetary and financial system. It did not take into account that the new liberal system with a predominance of small private enterprises and the lack of planned regulation turns out to be much more expensive than the old one: the costs increased, the share of unproductive expenses increased, many times more money was required, etc. It was (and still is) a way of diverting the working capital of enterprises into taxes. Taxes began to exceed profits by many times. The share of unprofitable enterprises  has increased.
The consequences of the subsequent failure of the economy with hyperinflation and the loss of many high-tech industries in Ukraine have not been overcome to date. The level of the economy has fallen much and remains low.
A weakened economy. Ukraine has suffered the next crisis of 2008-2009. It began to form with 2005. Its main reasons were the chronic unprofitability of foreign trade, the increase in corporate foreign currency debt, the high share of foreign currency in lending, the predominant increase in imports compared to exports. The economy of Ukraine has become dependent on foreign loans. Therefore, when the wave of the global crisis rolled through, the demand for Ukrainian exports fell and the sources of foreign currency lending closed, the Ukrainian economy collapsed.
The wines of the ruling circles of Ukraine and their incompetence in the events of the crisis 2008-2009. are visible on the example of the created unprofitableness of foreign trade. Ukraine in the 2005 year hastily prompted the WTO. Customs import tariffs agreed with WTO were introduced. But they were in 2,5 times smaller than the average in the WTO. Because of this, imports began to prevail over exports, the budget lost large revenues, foreign trade became chronically unprofitable. Every year, Ukraine is losing up to 1,5 billion dollars on this. The current government came to a halt and asked the WTO to reconsider about 270 tariffs, but received a negative response. Moreover, in the context of association with the EU, further reduction and zeroing of the protective customs tariffs of Ukraine is envisaged. How could such a failure be allowed? And no one answered for it and did not admit the mistake. Neither Tymoshenko, nor Terekhin, nor Yatsenyuk, who signed the final documents, nor other leaders.
Almost the same can be said about inflating the inflow of foreign currency and the growth of its share in lending to the economy. And so on.
The crisis of 2008-2009. ended with a phase of social debt crisis. Debts and budget deficits increased, which creates the need to reduce social spending. What, as we see, is happening in Europe. The gross external debt of Ukraine in 2012 amounted to 36,6% of GDP, and in QI 2013 reached 136,3 billion dollars, which is 76,5% of GDP. The budget deficit in 2008 was 14,2 billion UAH, and in 2012, 50,7 billion UAH. Over the 5 months of 2013, it amounted to 18,5 billion UAH. or on an annualized basis 44,4 billion UAH.
Against this unfavorable background, the next financial and economic crisis began to unfold with 2012. After all, the main crisis-causing factors remained to act. Mainly, the loss of foreign trade, the prevailing growth in imports compared to exports, non-recovery of depreciation of fixed assets. Another circumstance has appeared - the non-repayment of investment costs in Euro-2012. The situation on foreign markets began to deteriorate again, the transit of energy carriers was falling. Sales problems can be solved as follows: joining the Customs Union, planned innovative product updates, lowering the hryvnia exchange rate. The last path is painful, but it will probably happen, and one would have to move carefully in this direction.
The opposition is dragging the country into the EU market, which will finally undermine the economy of Ukraine. EU requirements for it are just deadly .
In 2012, lending to the economy declined significantly. The volume of loans for the year increased by only 2,2%. Loan rates remained high - on average 17,5% in national currency. And this is in the conditions of almost no inflation, which, as we know, raises the interest rate. As a result, industrial production decreased by 2%, agricultural - by 4,5%. In 2013, zero or even negative GDP growth is expected. In the I quarter. 2013 r. It has already decreased by 1,1%. Over the 5 months of 2013, the volume of loans increased only by 1,9%. The level of lending rates in national currency averaged 15,2%. Industry output fell another 5,2%. By the way, the acute phase of the crisis 2008-20098. It began with a reduction in lending. Obviously, the Ukrainian economy has entered a deflationary depression - a difficult and long-lasting phase of instability. The economy is falling, debts are growing. The government again turned to the IMF for new loans. But the conditions of the IMF are known: an increase in gas, energy and housing and communal services for the population.
A harsh financial and economic crisis looms ahead if Ukraine signs an agreement on a free trade zone with the EU. The EU in the draft treaty provides for Ukraine to lower and zero the customs protective rates, restrict the export of Ukrainian goods, introduce a tough system of technical, sanitary, organizational and other standards, including changing the gauge of railways, restricting activities in energy markets, etc.
Customs tariffs are far from equal. So, for the export of pork from Ukraine the tariff is 10,2% + 93 euro per 100 kg, and from the EU - only 5%. Butter to Europe - 189,6 euros per kg 100, and to Ukraine - 10% with a decrease of 5 years. Sardines to Europe - 23%, to Ukraine - 0%. Tariff for wheat and to Europe - 94 euro per ton with a restrictive quota of 950-1000 thousand tons and corn - 94 euro per ton and a quota of 400-650 thousand tons. In addition, European producers receive subsidies that are limited for Ukraine and are prohibited. For metal products from Europe to Ukraine, a zero duty is set, and from Ukraine - arbitrary (whichever you want) . At the same time, the vehicle offers a mutual removal of duties. The Russian budget for export duties will lose 5 billion dollars in favor of Ukraine, about the same - Gazprom .
All this will further worsen the financial condition of Ukraine, make it reduce production, bankrupt a lot of enterprises, especially small ones. Unemployment will increase greatly. You need to be the enemies of Ukraine to agree on the European version.
The argument in favor of the association and the common market with the EU is striking in its ignorance. Naive hopes for investment and technology cooperation. Innovative projects - expensive goods, weapon competition, and no one will give us. Foreign fixed capital investment over 20 years makes up only 5% of the total. They will not increase, since for an investor the main condition is the availability of a sales market and the opportunity to receive high profits. This is not the case in Ukraine, and when joining the EU, the situation will only get worse. There is an opinion that Ukrainian oligarchs are afraid of Russian business as stronger. As if European companies somehow stand on ceremony. Moreover, the Customs Union offers Ukraine only trade and production-cooperation cooperation without political and state-organizational integration, while the EU draws Ukraine into full organizational and political subordination to the emerging European confederation, where Ukraine as a third-rate province will have no rights. And the business conditions will be dictated by multinational companies.
Entry into the EU market for Ukraine is detrimental
The entry of Ukraine into the free trade zone with the EU will sharply worsen its economic situation, because Europe, due to a number of objective reasons, does not need finished goods from Ukraine. Europe needs only raw materials - low-grade metals, grains and oilseeds, as well as markets for their products. Therefore, the inclusion in the FTA with the EU for Ukraine will give the following consequences:
1. An increase in the flow of imports of goods, primarily consumer goods, and an increase in foreign trade unprofitability.
2. The suppression of the remnants of industrial production, non-primary agriculture (livestock, horticulture, vegetable growing, viticulture and winemaking), rising unemployment and poverty.
3. The death of the wholesale and retail trade of Ukraine under the competitive pressure of large European firms (these processes will primarily determine the ruin of small and medium businesses).
4. Consumer prices will rise to European levels with a few times lower wages.
5. The rise in price of imported gas and oil and the reduction of their transit
6. The final transformation of Ukraine into the impoverished raw-material semi-colony of the EU with an endangered and scattering population, as well as the decline of culture, education and, accordingly, language, not to mention science.
Ukraine already has a bitter experience. She hurriedly asked for it to the WTO. And what did she get? The constant financial deficit of foreign trade is about 10-15 billion US dollars per year. In 2011 a negative balance on goods amounted to 14,2 billion. And the government can not do anything about it.
Ukraine entered the European Energy Community. Thus, Russia's interest in the gas transportation consortium has been lost. Russia closes the ring of bypass channels for the supply of gas to Europe (North and South streams, the gas pipeline through Belarus) and, in fact, eliminates the gas transmission potential of Ukraine. And what does the European Energy Community give? Ukraine only loses. Neither the current government, nor the opposition can present any realistic arguments in favor of the FTA with the EU and European integration. Emotions for fools: we are Europeans. Refuse to join the Customs Union of Russia, Belarus and Kazakhstan, the economic advantage of which is confirmed by practical calculations and practical evidence . After all, Russia is importing a huge amount of food. By virtue of its historically developed specialization and connections, it is interested in industrial and scientific cooperation with Ukraine. Thus, very restrained calculations in a joint report of the Institute for National Economic Planning of the Russian Academy of Sciences and the Institute for Economics and Forecasting of the National Academy of Sciences of Ukraine showed that when Ukraine joins the Customs Union, export growth by 17,2%, or 6,2% to GDP, and a decrease in the value of imports by 5,8 billion can be expected. dale  In addition, you can count on the multiplicative effect of the growth in the volume of joint ventures and the development of cooperation in high-tech industries (for example, in the production of weapons, aerospace products, nuclear engineering). After all, even now the engineering products of Ukraine contain from 30 to 90 components from Russia. Improving the terms of trade, the abolition of export duties, reducing the price of gas to Ukraine can bring about 9 billion US per year. The volume of Ukraine's GDP may increase by 17%. All these calculations are indirectly confirmed by the practice of two years of the existence of the Customs Union of Russia, Kazakhstan and Belarus. Over 2, the trade volume in the union grew 2 times.
The economy of Russia and the Customs Union is a huge, growing, growing market! And with protection from oppressive imports. By entering it, Ukraine could radically improve its economic position. In particular, by providing itself on acceptable terms with gas supplies and earnings for the transit of energy resources. The EU cannot offer anything like this. He is in deep crisis and has no prospects for significant growth.
For the impulse to development, a revival in the economy, a transition to growth, and a revitalization of entrepreneurship are needed. This requires the expansion of markets for products with relatively high added value. Such an opportunity in the EU markets for Ukraine is practically excluded. The products of mechanical engineering and non-primary agricultural sectors are still bought in Ukraine mainly in the East. In 2009, Ukraine’s exports to the CIS were 45% more than in the EU. At the same time, the share of machinery, equipment and instruments in exports for the CIS amounted to 58,7%, and for the EU - only 17,4%. In case of trade in engineering products from the CIS, Ukraine has a surplus of 4,2 billion US dollars, and with the EU a negative one, 6,1 billion US dollars. When trading with the EU, Ukraine’s imports by 46% exceed exports. When trading with the CIS, if gas and oil are not taken into account (these goods will not become cheaper when purchased in the EU), exports exceed imports . That is, trade with the CIS is more profitable for Ukraine. Moreover, by developing the Eurasian direction, it is possible to achieve a reduction in gas prices.
Now Ukraine is advisable to shift the focus in trade relations eastward. We need a decisive turn in foreign economic policy, towards the Customs Union and the Eurasian space, otherwise there will be no conditions for development. And there is no need to identify trade and cooperation relations with the Customs Union and political integration with Russia. One must be able to remain politically independent, but use a cost-effective market.
The government’s intention to introduce Ukraine in parallel to the FTA with the EU and the FTA with the CIS, in our opinion, will not be able to give positive results or even be realized. Goods from the EU through the weakened customs border of Ukraine will begin to penetrate the markets of the CIS (disguised re-export, etc.). In addition, the flow of goods from Ukraine will be strengthened, being replaced by European goods. All this will force the CIS markets to defend themselves, and the free trade zone will crumble. Ukraine will not be able to sit on two chairs. We must be able to trade with everyone, but a special regime with lower customs tariffs must be coordinated between the two markets - without intermediaries. And they want to put Ukraine in the position of a translucent intermediary between markets that are not bound by customs agreements (not taking into account the general rules of the WTO). It is unlikely that anything will come out of this.
The opinion of the American specialist J. Perkins regarding the policy of the so-called free trade of Western states is instructive. “Free trade is a real euphemism. It gives transnational companies the privileges that national producers are deprived of. ” He cites an example of how the North American Free Trade Agreement (NAFTA) ravaged Mexico: “The American presidents and Congress introduced a whole system of rules that forbid other countries to levy American goods and subsidize local producers who could compete with our (American) agrofirms, but they have not abolished duties and subsidy programs in the United States, thus giving American agrofirms an unfair advantage. ” As a result, American agricultural firms flooded Mexico with dumping prices that do not cover production costs . Something similar is being prepared for Ukraine.
If the government (anyone!) Does not have enough wit and will to reconsider the policy in the direction advantageous for Ukraine, the decline of the economy and the well-being of the population will increase, and Ukraine will lose state sovereignty.
Ukraine is a failed state.
So, the ruling circles of Ukraine (in full agreement with the so-called opposition) are bringing the economy to full bankruptcy. This is the most important manifestation of the inability of the government to govern the country. There are signs of a failed state.
1. The Constitution is violated and repeatedly revised.
2. The parliament does not work much of the time, making scandals and fights.
3. The parties that are members of parliament do not have fundamental program differences (except for the communists), but simply struggle for power in the interests of business.
4. Laws and decrees of the President are not carried out by the whole country, individual regions and cities establish regulatory rules and practices that are contrary to the general state. At the same time, the form of a unitary state is preserved.
5. The president and his party that supports him have completely abandoned their campaign promises and are pursuing a non-dependent and anti-national policy.
6. The policy of Ukraine is determined by external dictatorship and influence, the country, in fact, loses its sovereignty and in the near future will lose it completely; partial or full entry into the EU deprives Ukraine of the remnants of state independence, turns into an externally controlled territory;
7. The population of the country is not a political nation, there is no unity of views on the fundamental problems of the organization of society and politics; even the functioning of terrorist bases that train mercenaries and aiming at changing the state system (in Crimea) is allowed.
8. US agencies can completely ignore the existence of the state of Ukraine. Thus, the military department completely occupies the laboratories and repositories of pathogens of especially dangerous infections and conducts experiments on the population of Ukraine. In 2009, in Ternopil, there was an outbreak of pneumonic plague, which was hidden under the guise of supposedly influenza. It is likely that the “leakage” of the infection was intentional. This was said by one of the people's deputies of Ukraine.
9. The country has destroyed the rule of law. The state is not able to guarantee the inviolability of property. Raider seizures of enterprises, premises and apartments have become almost everyday. The conditions are the corruption of the city authorities and the courts.
10. The country has lost the ability to socio-economic development, the economy is degrading.
These are the results of the domination of the liberal-nationalist parties and the presidents and prime ministers they have nominated, as well as the Party of Regions, which lags behind them. The bankruptcy of the economy and the destruction of the national state. If you can still save something, then this requires a sharp turn in politics.