News / Economy

Ukrainian Businesses Look for Alternatives to Russia

Ukrainian Businesses Look for Alternatives to Russiai
August 18, 2014 11:42 PM
With tensions continuing to rise with Russia, Ukrainian businesses are looking for opportunities elsewhere. VOA's Gabe Joselow reports on the economic changes taking place in Ukraine from the eastern town of Kharkiv, near the Russian border.
Gabe Joselow

With tensions continuing to rise with Russia, Ukrainian businesses are looking for opportunities elsewhere. 

In the eastern Ukrainian city of Kharkiv, near the Russian border, economic change is underway.  On a warm summer's day riding the cable cars at an amusement park in Kharkiv, you would never guess there is a war going on next door.

Just a few hundred kilometers from here the Ukrainian military is battling pro-Russian separatists in a months-long conflict that has divided the country.

Kharkiv has remained relatively peaceful despite the conflict in neighboring Donetsk province, but the economy has taken a hit because of tensions with Russia.

So, business owners are looking for opportunities elsewhere.

Industries in places like Kharkiv were built around serving the needs of the former Soviet Union.  Ukraine still exports about 25 percent of its products to Russia.

These include agricultural goods like sunflower seed oil, as well as other food and heavy machinery.

But new Russian trade restrictions on Ukrainian products have started to affect local businesses.

Dmytro Kutovyi runs a successful construction business in Kharkiv, his wife owns a popular upscale cafe, and they are active with a leading civil society forum.

“Probably in the short perspective, the Ukrainian economy will suffer losses because cooperation with Russia has lessened and in some fields has stopped," Kutovyi said. "But nothing extremely awful has happened during these months.”

Russia has already put restrictions on food imports from Ukraine and exporters have complained about new, prohibitive customs requirements to access Russian markets.

Kutovy says the increased pressure from Moscow has encouraged businesses in Kharkiv to start looking increasingly inward to Ukraine for opportunities.

“No economy can be dependent on one, even a really large, customer," he said. "Even now, companies are slowly starting to work on the domestic market, which is traditionally important for such fields as the defense industry.”

One of Kharkiv's biggest industries is the production of military vehicles bought by Russia.  Ironically, the rebels fighting against the Ukrainian military are accused of using Russian-supplied equipment.

A new regional administration is focusing on shifting the defense industry to support the local economy, as well as the country's armed forces.

The head of the Kharkiv state authority, Igor Baluta, says the industry was long neglected under the previous government.

“Things for many years have been falling into pieces, say, sabotaged, by the leaders of the Ministry of Defense.  We are trying to restore it now,” he said.

The new government of President Petro Poroshenko has agreed to trade deals with the European Union to encourage more economic cooperation with the West.

But Russia remains the economic powerhouse in the region, its greatest leverage stemming largely from the supply of natural gas.

In the meantime, as war rages, Kharkiv is optimistic the most promising business horizon is at home. 

You May Like

Video Russia’s Syrian Escalation Tests Obama’s Crisis Response

Critics once again question whether president has been slow to act on Syrian conflict, thus creating opening for powers like Russia More

Ancient African DNA Shows Mass Migration Back Into Africa

First genetic analysis of ancient human remains in Africa suggests massive migration from north around time of Egyptian empire More

NASA: Pluto Has Blue Sky

New photos also reveal the presence of water ice More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Hungary Criticized for Handling of Refugeesi
Henry Ridgwell
October 08, 2015 8:02 PM
Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs

World Currencies


Rates may not be current.