Ukrainian economy emerges from ashes

Opinion remains divided on the success of Ukraine's President Viktor Yanukovich, who has been in office for one year and whose biggest gain thus far is probably the starting economic revival of the country.

­When Viktor Yanukovich campaigned for the presidency a year ago, he pledged to revive Ukraine’s crippled economy.

Twelve months on, some in Ukraine accuse him of not keeping his word. However, the annual economic report paints a different picture.

In 2010, Ukraine registered four per cent GDP growth – that is one of the highest figures in Eastern Europe. While a year before that, the country’s economy was devastated by a 14 per cent slump.

Ukraine was among the countries worst affected by the global recession. And while experts say it has not yet fully overcome that blow, many spheres of the economy saw double-digit growth in 2010 – with the industrial sector being a firm leader.

“We have registered 30 per cent growth. This helped us to avoid financial damage this year. Exporting our products is what can save our economy now, in the post-crisis year. Our company exports up to 80 per cent of what we produce and the Russian market is our priority,” says Oleg Svinarchuk, president of Bogdan Corporation.

As ties between Kiev and Moscow moved from strained to warm, demand from the Russian market increased.

“Industrial production increased by more than 11 per cent. There was significant increase in demand for Ukraine’s machinery from Russia, which was the major determinant for impressive growth in machinery – more than 30 per cent. This gives us a basis to expect strong performance from the economy in the current year,” says Phoenix Capital analyst Oleksandr Lozovy.

The government still has a lot of issues to address – an ailing social structure, ineffective banking sector and poor agriculture. But one political analyst is sure that it is only a matter of time.

“The previous administration lived in a dream world. And wanted the whole country to live in that world too. This regime stands firmly on its feet and deals with the real problems. We must give it another year to see how they would fulfill the many projects they have begun,” says political analyst Dmitry Vydrin.

The opposition is still rigorous in accusing the new power circles of failings – something of a new round of political in-fighting within this post-Soviet state. But experts are sure of one thing: if the economy continues to rise at the same rate, come next year, many critics will be silenced by witnessing the promised better living conditions.