O
nce referred to as the “Bread Basket” of the region, Ukraine was also the industrial heartland for the Soviet Union. However, post Soviet instability has brought economic stagnation and rampant corruption. Later, the Orange Revolution of 2004 raised the expectations that Ukraine’s orientation towards the West would bring democracy and economic prosperity. Instead, the Ukrainian government cut itself off from its large neighbor Russia which Ukraine relies on for energy and most of its trade, causing further economic decline. After six years in power, the Orange Revolution was defeated by a Blue Wave. Some analysts feared a Yanukovich presidential victory would mean sharing power with Prime Minister Timoshenko and thus causing more of the same stagnation brought about by a political tug-a-war. However, President Yanukovich managed to form a government strong enough to enact the badly needed economic reforms Ukraine needs to attract investment. Despite which direction the government orients itself to, when it comes down to investors laying their money on the line, stability is a critical factor. Now that a new government has ushered in hopes of stability, investors seem to be once again lining up to enter Ukraine’s markets.
Fitch Raises Ukraine’s Rating from Negative to Stable…
AP: Fitch ups Ukraine’s debt rating outlook…
Tags: BRIC, CIS, doing business in ukraine, eastern europe, economic crisis, emerging markets, Investing in CIS, recovery
