Ukraine, a country once considered as an integral part of the Soviet Union, has had a checkered economic history since its independence.
Despite being one of the largest economies in Eastern Europe, Ukraine's GDP per capita has always lagged behind Russia, which has been three-four times better in terms of GDP terms per capita. The recent announcement by the World Bank that the forecast for Ukraine's GDP has been cut down to zero this year (2013) has only added to the country's economic woes.
The upcoming Eastern Partnership summit in Vilnius, where the Association Agreement, including its Deep and Comprehensive Free Trade Area, is to be signed, has generated a lot of interest and speculation about the future of Ukraine's economy. Many are hoping that eventual incorporation into EU structures will change the country's economic trajectory for the better.
One of the countries often cited as a positive example is Poland, which has seen significant improvements in its economy and GDP since joining the EU. In the next few posts, I will be comparing Ukraine with Poland to gain a better understanding of the challenges facing Ukraine's economy and what lessons can be learned from Poland's experience.
It is important to understand the root cause of Ukraine's economic struggles. The country has a rich cultural and historical heritage and vast natural resources, but has been unable to leverage these assets to its advantage. Corruption, political instability, and an outdated economic system have all contributed to the country's economic malaise. The government has been slow to implement the necessary reforms to modernize the economy and attract foreign investment.
In addition, Ukraine's close proximity to Russia, which has a significant influence on the country's economy, has also been a hindrance to its growth. Russia has used its natural gas supplies as a political weapon, putting pressure on Ukraine's economy and limiting its ability to pursue independent economic policies.
The signing of the Association Agreement with the EU, however, holds great promise for the future of Ukraine's economy. The agreement, which includes a Deep and Comprehensive Free Trade Area, is expected to provide a much-needed boost to the country's economy by increasing exports and attracting foreign investment. The EU is also expected to provide technical assistance and financial support to help Ukraine implement the necessary reforms.
Poland, on the other hand, has been a success story since joining the EU. The country has seen significant improvements in its economy and standard of living, and has become a regional economic leader. Poland's experience can provide valuable lessons for Ukraine as it seeks to follow a similar path.
In conclusion, Ukraine has a lot of potential to become a successful and prosperous economy, but it will require a concerted effort from the government, the private sector, and the international community. The signing of the Association Agreement with the EU provides a great opportunity for Ukraine to turn the corner and move towards a more prosperous future. In my next posts, I will continue to explore the challenges facing Ukraine's economy and what lessons can be learned from Poland's experience.
