News / Economy

Ukrainian Businesses Look for Alternatives to Russia

Ukrainian Businesses Look for Alternatives to Russiai
X
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

Obama: Alaskans Feel Signs of Climate Change

They're seeing bigger storm surges as sea ice melts, more wildfires, erosion of glaciers, shorelines More

Katrina Brought Enduring Changes to New Orleans

The city’s recovery is the result of the people and culture the city is famous for, as well as newcomers and start-up industries More

Magical Photo Slides Show Native Americans in Late 1800s

Walter McClintock spent 20 years photographing the Blackfoot Indians and their vanishing culture at the dawn of the modern age More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs

World Currencies

EUR
USD
0.8874
JPY
USD
120.83
GBP
USD
0.6497
CAD
USD
1.3271
INR
USD
66.162

Rates may not be current.