BizAims

Ukraine:

In Soviet times, the economy of Ukraine was the second largest in the Soviet Union, being an important industrial and agricultural component of the country's planned economy. With the collapse of the Soviet system, the country moved from a planned economy to a market economy.

Ukraine's 2007 GDP (PPP), as calculated by the International Monetary Fund (IMF), is ranked 29th in the world and estimated at $399.866 billion.

Nominal GDP (in U.S. dollars, calculated at market exchange rate) was $131.2 billion, ranked 41st in the world. In the early 2000s, the economy showed strong export-based growth of 5 to 10 percent, with industrial production growing more than 10% per year. The growth was largely attributed to a surge in exports of metals and chemicals to China.

The World Bank classifies Ukraine as a middle-income state. Significant issues include underdeveloped infrastructure and transportation, corruption and bureaucracy. But the rapidly growing Ukrainian economy has a very interesting emerging market with a relatively big population, and large profits associated with the high risks. The Ukrainian stock market recorded 130% growth in 2007, the second highest in the world.

According to the CIA, in 2006 the market capitalization of the Ukrainian stock market was $42.87 billion. By December 2007 the average nominal salary in Ukraine reached 1,675 hryvnias per month. Despite remaining lower than in neighboring central European countries, the annual growth of average salary income in real terms is about 20 percent for several years (2001-2006) in a row. The country imports most energy supplies, especially oil and natural gas, and to a large extent depends on Russia as an energy supplier. At the same time, 85 percent of the Russian gas is delivered to Western Europe through Ukraine.

After 15 years of negotiations, Ukraine was invited to join the World Trade Organization on February 5, 2008. Ukraine ratified the agreements on April 10, 2008, and will become a WTO member 30 days after the ratification.

Republic of Moldova:

Moldova enjoys a favorable climate and good farmland but has no major mineral deposits. As a result, the economy depends heavily on agriculture, featuring fruits, vegetables, Moldovan wine, and tobacco. The country is considered to have the cleanest air in the world.

Moldova must import all of its supplies of petroleum, coal, and natural gas, largely from Russia. After the break up of the Soviet Union in 1991, energy shortages contributed to sharp production declines. As part of an ambitious economic liberalization effort, Moldova introduced a convertible currency, liberalized all prices, stopped issuing preferential credits to state enterprises, backed steady land privatization, removed export controls, and liberalized interest rates.

The economy returned to positive growth, of 2.1% in 2000, 6.1% in 2001, and 6% in 2007. But the economy remains vulnerable to higher fuel prices, poor agricultural weather, and the skepticism of foreign investors. In 2005 (Human Development Report 2008), the registered GDP per capita US $ 2,100 PPP, which is 4.5 times lower than the world average (US $ 9,543). Moreover, GDP per capita is under the average of its statistical region (US $ 9,527 PPP). In 2005, about 20.8% of the population were under the absolute poverty line and registered an income lower than US $ 2.15 (PPP) per day.

Moldova is classified as medium in human development and is at the 111th spot in the list of 177 countries. The value of the Human Development Index (0.708) is below the world average. Moldova remains the poorest country in Europe in terms of GDP per capita: $ 2,500 in 2006. The GDP in 2007 constituted $4,104 mln. That constituted a growing with 3% from the 2006 indicator.