Ukraine Sustainability Issues

The critical environmental and sustainability issues of Ukraine:

  1. Economy

Ukraine was already mired in an economic slowdown when the bloody, pro-Europe Maidan revolution led to the former government’s dramatic collapse in early 2014.

The events that followed, including Russia’s annexation of a swath of land in the south and fighting with pro-Russia separatists in the east, have deepened the recession, sending Ukraine’s currency — the hryvnia — plunging while debt has jumped to 100 per cent of GDP.

Ukraine suffered a deep recession in 2015. Since then, the govt. has focused on reforms to bring the economy back on track.  However, the issues still continue to persist

-Nearly two-thirds of Ukrainians (65%) are dissatisfied with their standard of living

-Nearly four in 10 adults in Ukraine report not having enough money for food or shelter (38%).

-Almost half (47%) say they are dissatisfied with the availability of good, affordable housing in their city.

GDP: $112 bn, GDP per capita: $2,963 

Annual GDP growth: (2012-17): -2.4% 

Economic Freedom Index: 52.3

 

  1. Migration

Ukraine is a small country spread over 603,500 sq km area with a population of only 44.2 million people. Low wages, combined with a lack of employment options, have led some Ukrainians to look abroad in search of new opportunities. A recent article in The Washington Post finds that one in 10 Ukrainians, nearly 5 million people, are currently working outside of their country’s borders. These workers provided remittances back into Ukraine that are expected to amount to nearly 12% of the country’s GDP this year.

While some of this movement is cyclical, with workers returning home at regular intervals, a growing number of residents are looking to move out of Ukraine for good. A record-high 31% of Ukrainians report that they would like to move to another country permanently, a rise of 12 percentage points since 2014.

 

  1. Conflict

In March 2014, Russian troops took control of Ukraine’s Crimean region, before formally annexing the peninsula after Crimeans voted to join the Russian Federation in a disputed local referendum. Russian President Vladimir Putin cited the need to protect the rights of Russian citizens and Russian speakers in Crimea and southeast Ukraine. The crisis heightened ethnic divisions, and two months later pro-Russian separatists in the Donetsk and Luhansk regions of eastern Ukraine held a referendum to declare independence from Ukraine. 

The conflict in eastern Ukraine has transitioned to a stalemate after it first erupted in early 2014, but shelling and skirmishes still occur regularly, including an escalation in violence in the spring of 2018.

 

  1. Corruption 

The country ranks 131 out of 176 countries in the Transparency International 2016 Corruption Perception Index. New anti-corruption agencies have been set up in part thanks to the active involvement of civil society as well as Western conditionality. However, the new National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAPO) have yet to deliver significant results. 

According to the United States Agency for International Development (USAID), the main causes of corruption in Ukraine are a weak justice system and an over-controlling non-transparent government combined with business-political ties and a weak civil society.

 

  1. Debt and Balance of Payment Issues 

International Monetary Fund aid has kept Ukraine’s economy above water so its ongoing support is seen as crucial, especially with around $3 billion (about 2 percent of GDP) of external debt obligations, including interest, coming due in the remainder of 2019. Another $5.5 billion (about 4 percent of GDP) must be repaid in 2020.

But Ukraine’s patchy reform efforts led to repeated delays in its previous IMF program that ended up disbursing only $8.7 billion of a planned $17.5 billion. 

Foreign debt: 113.3% of GDP & 150.4% of total exports

Current account balance: -2.4% of GDP

Debt service ratio: 19.3