The former Soviet state of Ukraine is situated between Asia, Europe, and Russia. Rich in culture and history, this fascinating country is currently undergoing much economic, political, and social change. Abundant natural resources and with a highly-skilled labor force, it ranks second only to Russia among former Soviet states in potential to become a successful market economy.
Expatriates will find ancient cities, magnificent Ukrainian and Russian Orthodox cathedrals and monasteries, as well as many good restaurants and well-stocked shops.
The capital, Kiev, one of the oldest cities in Eastern Europe, is a lively cultural center with its excellent theater, opera, and ballet companies.
Government and politics
Ukraine is a parliamentary democracy with separate executive, legislative, and judicial branches. The executive branch consists of an elected president and a prime minister who is appointed by parliament. The president controls security forces, although they are subject to investigation by a permanent parliamentary commission. The unicameral parliament, or Verkhovna Rada, initiates legislation, ratifies international agreements, and approves the budget.
Regional and district heads are nominated by the president; however, the prime minister must also approve of these appointments. Local leaders are directly elected, and have full control over local budgets.
Ukraine's political landscape features many parties, although many are small and have few members. As a party must gain 3% of the vote to win any seats in the parliament, these small parties will often join together in coalitions to achieve this goal. Major parties include the Party of Regions, the Yuliya Tymoshenko Bloc (comprised of two smaller parties), and the Our Ukraine Bloc (comprised of many smaller parties). Both the Socialist and Communist parties also hold seats in the Verkhovna Rada. The ruling coalition currently includes the Party of Regions along with the Socialist and Communist parties. The Party of Regions, led by Prime Minister Viktor Yanukovych, endorses making Russian a second official language of Ukraine, pro-Russia foreign policy, and regionalism.
Ukraine, with its highly-skilled labor force and abundant natural resources, has great potential to capture the rewards of an independent free-market economy. Privatization and foreign investment are limited, but improving, as Ukraine recovers from the sharp economic decline of the 1990s post-Soviet era. Despite economic growth in every year since 2000, and double-digit growth in GDP, the standard of living is still well below that which the people of Ukraine enjoyed in the early '90s. Recent reforms have aimed at transforming Ukraine into a European-style capitalist state. Still, vast segments of the economy are state-controlled, particularly in the high-tech industrial sector.
Former Communists have lost much of their influence, but still exercise some limited power in the government as part of the majority coalition, where they vigorously resist economic change. Reports contend that corruption and favoritism are prevalent. The black market is everywhere, and merchants are becoming increasingly ingenious at avoiding government bureaucracy in marketing their goods. This corruption, along with complex regulations, remain the main limiting factors to foreign investment.
Ukraine depends heavily on Russia for its energy supply, a dependancy which could weigh heavily on Ukraine's economic future. A gas dispute in early 2006 between the two nations led to Russia to cut off gas supplies to Ukraine for three days before a compromise was reached. The incident was felt throughout Europe, as most European nations receive gas which travels through Ukraine from Russia, and supplies in these countries quickly dropped as a result of the dispute.