Editor’s NoteWhat is wrong with the Ukrainian economy, even now that many of the most important reforms have been implemented? The country is still exporting mainly unprocessed products and raw materials, such as valuable mined reserves or food grown and produced by huge enterprises that in most cases have been controlled by oligarchs since their emergence in the 1990s.
One way to get past this conundrum is to recognize emerging enterprises that are championing new, innovative, and creative products for the global market — especially in the realm of hi-tech. Most of these individuals started or expanded their activity relatively recently. Now, it is just a matter of time before they gain enough notoriety that they reach a critical mass and start to make a real difference. They have the potential to erode the over-reliance on unprocessed products and raw materials that dominate the Ukrainian economy, curtailing the oligarchs’ influence on the economy and politics.
Statistical picture of still-colonial Ukrainian economy and new promising growth
When comparing the statistics of Ukraine’s exports with other first-world countries (or even neighboring Belarus), Ukraine stands out as the worst possible scenario. Exports are predominantly raw or low-processed products. At the forefront is agriculture.
Top exports are Corn (9%), Seed Oils (7%), Wheat (6%), Iron Ore (6%), semi-finished Iron (5%), and — IT (6%). These are mostly exported to the EU, Russia and China.
Top shows 2019 exports of goods according to oec.world data. In total $49.5bn. (Note: graph excludes data for some $12bn of services that do not apply to these categories).
In 2019, Ukraine was the world’s biggest exporter of Seed Oils ($3.75B). However, this is nothing to be proud of, considering the country’s extremely low share of intellectual exports.
It would be fair to say that economically Ukraine’s colonial status has changed little since the days of Stalin. Although the exploitation of land is not as barbarous as during the 1933 Holodomor (Stalin-manufactured famine that killed more than three million people) it is still very harmful for ecology. 90% of Ukrainian steppe lands are under tillage.
Traveling by vehicle or train, virtually no raw nature is visible and very few villages – rather, kilometers and kilometers of cultivated fields. This choked land ultimately leads to a drier climate, dust storms, and other natural disasters that are becoming ever-more frequent, degrading biodiversity. There are few places in the world with such a high degree of tillage. One of the only analogies would be that of eastern Kansas. Even though the U.S. exports two times more grain than Ukraine, the statistical consequence for them is nowhere near that of Ukraine where grain is the main source of much-needed foreign currency.
50-kilometer-wide satellite image (top) of Kansas biodiversity compared to (bottom) 50-kilometer-wide image of Dnipro banks bordering on steppes, entirely under tillage with little or no diversity.
Lauded as one of the top breadbaskets of the world, there is no easy solution for this pros-and-cons dilemma. With over-population, the demand for food increases around the globe, especially in areas that are not able to satisfy the needs of its population. In Ukraine, where food products are the bulk of exports, the increasing damage to this critical resource is cause for alarm and the pressing need for counter-measures.
- Read also: Dust storms, dry rivers, and desertification in Ukraine offer harsh lessons against intensive farming