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Overview
Ukraine is the second largest country in Europe and occupies a strategic position between Asia and Europe, as well as on the Black Sea. Ukraine shares borders with Belarus, Hungary, Moldova, Poland, Romania, Russia and Slovakia. Ukraine achieved independence from the Soviet Union in 1991 but endemic corruption, continued state repression, and an antiquated Soviet-style infrastructure continued to impede the country’s path towards wider European integration. Ukraine is rich in natural resources, including coal, iron, natural gas, oil, magnesium and timber. The GDP per capita is estimated at $6,800. Ukraine has a population of just under 47 million but, like many former Soviet republics, suffers from a rapidly aging society and negative population growth rate (-.6%). The majority of the population (78%) identify themselves as ethnic Ukrainians, with Russians accounting for the second largest ethnic group (17%). Byelorussians, Moldavians, Crimean Tartars, Bulgarians, Hungarians, Romanians, Poles and others account for the rest of the population. The dominant religion is Ukrainian Orthodox or Orthodox (no affiliation), although almost 40% of the population does not identify with any religion at all.
Social Indicators
In the aftermath of the November-December 2004 Orange Revolution that brought thousands of protestors to the streets, demographic pressures and temporary internal displacement eased, as captured in the first two indicators. Despite the lessening of pressures caused by the massive month-long protests in 2004, Ukraine continued to have a rising HIV/AIDS rate, largely due to the human trafficking phenomenon, and overcrowding in main urban and industrial areas. Group grievance also rose in the months following the Orange Revolution as many Ukrainians, particularly those in the less developed east of the country, felt marginalized and betrayed by the political process and the new government’s failure to deliver on key economic reforms. Following the breakup of the Soviet Union, all former Soviet states and satellite states began to experience chronic brain drain as well-trained professionals sought work in the West. While this improved slightly from 2004, likely reflective of renewed hope following the revolution, Ukraine continued to experience sustained human flight, as indicated in the high score in this indicator.
Economic Indicators
In the Failed States Index 2005 (FSI 2005), uneven economic development between the west and eastern parts of the country continued to be a key issue although an overall improvement in the economy as a whole lessened the disparities. In March 2005, the new government eliminated most of the tax and customs privileges that formally were a major factor in fueling Ukraine’s illicit economy. The privatization of the Krivorishstal steel factory in late 2005 brought in an estimated $4.8 billion in revenue for the government when Mittal Steel purchased it for six times the original sales price. The windfall from the sale was used to finance the national budget deficit, reduce public debt, and recapitalize national banks. Despite some reforms, Ukraine was still criticized by the IMF and World Bank for not speeding the pace of structural reforms aimed at reducing its shadow economy and encouraging more foreign direct investment.
Political/Military Indicators
Beginning in late March 2005, cleavages within the newly elected Yushchenko government began to emerge that continued throughout the year. In September 2005, the president’s chief of staff, Olesandr Zinchenko, resigned and accused several high-ranking officials in the Yushchenko government of widespread corruption. In the aftermath, the president dismissed the government of his ally Yulia Tymoshenko, who was viewed as key in Yushchenko’s victory in the Orange Revolution. The new prime minister, approved later that month, is seen as an ally of the former Kuchma government and his appointment marginalized many of President Yushchenko’s former supporters, as captured in the score for factionalized elites which, while lower than last year, still remained high despite the new government. Ukraine’s human rights score improved in the FSI 2006, mainly due to reduced incidences of negligent deaths in work-related accidents and reduced instances of politically motivated arrests and beatings. There were several reports of personal security “units,” often comprised of retired or off-duty military and police officers, being employed by Ukrainian mafia figures for protection or intimidation purposes, resulting in the increase in the score of indicator by 10 percent in the FSI 2006. Despite an improved economy, public services did not improve in the FSI 2006 as infrastructure, education and medical improvement projects were slow to begin. While Ukraine has one of the highest literacy rates in the former Soviet Union and a widely available socialized medical system, both the education and medical sectors are overburdened and in need of greater human and capital resources.
Core Five State Institutions
| Leadership | Military | Police | Judiciary | Civil Service |  | |  | | | | Good | Good | Moderate | Moderate | Moderate |
Despite the high hopes following the Orange Revolution and the overwhelming support shown for President Yushchenko, his party has come under fire for not instituting enough promised reforms. In addition, the sacking of the very popular Prime Minister Yulia Tymoshenko has damaged Yushchenko’s reputation as a pro-Western reformist president.
The Ukrainian military, while in need of downsizing and reform, is generally regarded as professional and under firm civilian control.
Following the Orange Revolution, incidences of police brutality decreased, and reform and greater oversight contributed to increased police professionalism. There was also much better coordination between the military and police on cracking down on human trafficking rings, largely as a result of increased training initiated by the government.
The judiciary, while nominally independent, still relied heavily on the executive. In sharp contrast to the Kuchma era, however, the head of the Supreme Court reported that there were no incidences of executive interference in trials, even in trials of officials accused of corruption.
Ukraine’s civil service improved in 2005 as many Soviet-era appointees left and were replaced by younger, prodemocracy civil servants. Ukraine still suffers from endemic corruption in all of its state institutions, however, and the civil service is not an exception.
Prognosis
Following the heady days of the Orange Revolution, Ukraine has sputtered a bit on its path to democratic reform. The shakeup of the Yushchenko coalition has resulted in the disillusionment of many Ukrainians, as has slowed pace of reform. Yushchenko needs to continue to curtail the power of Kuchma-era appointees and use his political leverage, and support from the West, to continue to reform the Ukrainian economy and combat rampant corruption. In addition, more resources and infrastructure improvement initiatives should be directed to the east of the country, where high unemployment and inadequate public services continue to contribute to a strong desire to return to a Soviet-style political, social, and economic system.
Copyright (C) 2006 The Fund for Peace
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