News / Europe

Ukraine Interim Leader Warns Economy in Steep Decline

EU, IMF Vow Assistance for Battered Ukraine Economyi
X
February 24, 2014
Ukraine’s economy appears on the brink of collapse, following historic developments this weekend that saw the ouster of its Russian- backed president, Viktor Yanukovych. But Western creditors who met at the G20 in Australia say they’re ready to help. The International Monetary Fund says it’s prepared to lend support but says reforms are a prerequisite for any financial support. More from VOA's Mil Arcega.

Related video report by Mil Arcega:

TEXT SIZE - +
VOA News
Ukraine's interim president says his country faces serious economic problems that began long before the deadly street protests against ousted president Viktor Yanukovych.

Acting President Oleksandr Turchynov said Sunday night that the country is in a steep economic decline, even as many of the world's economies are advancing.

"On the background of the world economic recovery, Ukraine is rolling down into an abyss and is a pre-default state," he said.

Ukraine's finance ministry said Monday that it needs $35 billion to survive this year and next, and some of the money is needed in the next week or two. The interim government is looking to the United States and the European Union for financial help, with the International Monetary Fund possibly financing an aid package.

U.S. Treasury Secretary Jacob Lew said there was broad support from leaders at a weekend G-20 meeting of the world's largest economies for IMF-based assistance, but only after a transitional Ukrainian government is established by parliament. He underscored the need for Ukraine to undertake government reforms.

Kyiv governments have long struggled with corruption and bad government. Ukraine's economy has relied on cheap natural gas supplies from Russia, which could be at risk with the ouster of Yanukovych. His rejection of closer EU ties and embrace of Moscow three months ago touched off the street demonstrations that led to his fall.

Newly-elected speaker of parliament Oleksandr Turchynov, who on Sunday assumed interim presidential powers, is seen in the parliament building in Kyiv February 22, 2014.Newly-elected speaker of parliament Oleksandr Turchynov, who on Sunday assumed interim presidential powers, is seen in the parliament building in Kyiv February 22, 2014.
x
Newly-elected speaker of parliament Oleksandr Turchynov, who on Sunday assumed interim presidential powers, is seen in the parliament building in Kyiv February 22, 2014.
Newly-elected speaker of parliament Oleksandr Turchynov, who on Sunday assumed interim presidential powers, is seen in the parliament building in Kyiv February 22, 2014.
Yanukovych turned down a free trade and association agreement with the EU and instead accepted $15 billion in Russian assistance, a package Moscow has put on hold with the political uncertainty in Kyiv.

In his speech Sunday, Turchynov said the Ukraine "must return to [the] family of European countries," while also recognizing "the importance of our relations with Russia."

Ukraine, with 44 million citizens, had a $174 billion economy in 2012, according to the U.S. Central Intelligence Agency. Its $7,300 per person economic production ranks 137th in the world.

It has a significant industrial base and substantial natural resources, including rich farmland. But its economy plunged sharply in the world economic downturn in 2009, dropping 15 percent. The CIA said it was "among the worst economic performances in the world."

Earlier this month, the Fitch financial services firm downgraded the country's credit rating. Fitch said the political uncertainty in Kyiv has contributed to weakening confidence in the country's currency, the hryvnia, and noted that its value had fallen 7 percent against the U.S. dollar since the first of the year.

You May Like

Analysts Warn of Regional Proxy Conflict in Afghanistan

Analysts warn if Kabul’s neighbors do not start to cooperate, competing desires for influence could deteriorate into a bloody proxy war in the country More

Saudi Intelligence Chief Replaced

Bandar bin Sultan came under criticism for supporting al Qaida, prompting King Abdallah to wrest Syria operations away from him in February, handing them to Interior Minister Prince Mohammed bin Nayef More

Poetry Magazine editor Don Share talks what makes a good poem with VOA's David Byrd

What makes a good poem? And is poetry as viable an art form as it once was? To find out, VOA's David Byrd spoke to Don Share, the editor of Poetry Magazine. More

This forum has been closed.
Comment Sorting
Comments
     
by: 1stworldview from: texas
March 18, 2014 4:34 AM

The invasion of the Ukraine by Russia is sending a ripple effect through out Eastern Europe. With the prospects now for possible cold war starting all over again investors brace for sanctions against Russia. And with the already falling economy of the Ukraine, investors and business are bailing out as fast as they can.

During the next few years, the Ukraine economy will be pushed to its limits. Currently, the Ukraine desperately needs 30 billion in loans to survive, and with ousted former president Viktor Yanukovich having already pulled the country out from the European Union, and the new government wanting nothing to do with Russia, the government will be in dire straits.

The US State department has issued a travel warning urging Americans not to travel to the Ukraine. Tourism is a huge part of Ukraine economy. with hotels, airlines and restaurants depending on tourism. As these businesses cut back, the ripple effect in cities like Kiev, Odessa and Yalta will have devastating consequences on the economy. Just as when the housing market died in the US, the effects were felt world wide. Not only will Ukraine's economy continue to decline, but most of Western Europe's fragile economy will also feel the effects.

One industry that seems to thrive on the situation is the foreign bride market, A Foreign Affair operates four office in the Ukraine. Kenneth Agee the marketing director says, "In the last few weeks we have seen the biggest surge ever on women signing up. Not only have we seen the biggest surge, but we have seen the highest quality of women signing up; doctors, engineers, even some of Ukraine's most beautiful models, With the possibility of war looming over the horizon, American men are looking very desirable." A Foreign Affair 's new member Irina of Kiev says, "America is stable, American men have very good family values. These are important to Ukraine women; we want a good environment to raise our families. With Russian tanks rolling down our streets, I do not see a bright future here for starting a family.

The future does not look good for the Ukraine. Russia has no intention of letting Ukraine have complete independence. Most western Ukrainians have had a strong dislike for Russia for many generations, and will do what ever it takes to resist Russian influence or occupation. This being said, the country will have a long battle and many lines drawn in the sand, from serious economic sanctions to full out war. At this time, it looks like this struggle could go on for a decade or more.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid