Trends in economy development

• To develop the export potential of the country in the international specialization, which would organically combined with beneficial for Ukraine in structural transformations in the economy (of course). According to the balance between domestic and external demand for Ukrainian goods and services).
• To increase efforts in the most promising sectors of the world economy (electronics, energy, materials with predetermined properties, biotechnology, scientific, technical, engineering, consulting services, international tourism, etc.).
• Creating competitive transnational corporations to develop global marketing strategies, technologies major international cooperative projects.
• Diversify heohrafichnuu structure of foreign trade, minimize critical dependence on individual countries (markets) under increasing economic security of Ukraine.
• To ensure the balance of exports and imports, trade and current account balance of Ukraine. Ukraine 20 years already exist as an independent state. However, the only reasonable program of socio-economic development, which would be focused its attention on priority areas of international and thus stimulated the use of market benefits of domestic production has not yet been developed. This negatively affects the development of international commercial relations Ukrainian enterprises blurs the boundaries between the political and marketing factors of international cooperation. In order to accelerate the process of economic self-determination, the application is really marketing tools and approaches that are inherent in the global market, you must:
• To determine the sectoral priorities export activities and to provide state support actor precisely the Ukrainian companies whose products have a perspective on the world market;
• Specify and significantly reduce the list of countries and regions that can claim to be a strategic partner of Ukraine, export enterprises should focus efforts on the most promising geographic areas;
• Significantly improve the protection and rights of domestic producers;
• Improve the management and marketing of foreign trade activities;
• Develop a system of macro-and microeconomic indicators and quality standards that promote the organization and development of modern marketing. [21]

Thus, Ukraine gradually take their rightful place in the world economy, spoke not as a raw materials appendage of the developed countries, but as an independent country with a modern economy that leverages its scientific and technical potential and acquired experience in management, including - Marketing, operations. Today Ukraine should actively identify its potential in economic terms.

 

2.2. Evaluation of import and export potencial of Ukraine

After years of strong growth, in 2009 Ukraine experienced one of the worst recessions in Europe. Growth rate decreased by -15%, under the joint effect of a decline in economic activity, drying up of foreign funding and a crisis in the global demand for steel. The country faced a collapse of its industrial production, a currency crisis, an inflation hike, and a weakening of its banking system and eventually had to be saved by the International Monetary Fund (IMF). Ukraine resumed growth in 2010 (3.7%), thanks to the recovery of international trade and a political stabilization following the March elections. [18]The new government elected in Mars has reestablished relations with the IMF (which had been suspended due to the country's failure to pursue the necessary reforms) and is committed to put in place the planned structural reforms: strengthen the competitiveness of the Ukrainian industrial sector, reform public administration, invest in regional development and deregulation and reform the financial system, fiscal procedures and public finances. The economic crisis had a deep social impact in Ukraine. Unemployment rose sharply, finally leveling off at just below 9% in 2010. Wage levels have also declined.  

Main Industry Sectors

The agricultural sector has a major role in Ukraine's economy. It employs around 17% of the population and contributes around 10% to the GDP. The main crops are cereals, sugar, meat and milk. Ukraine is the fifth biggest exporter of cereals in the world. Ukraine is rich in mineral resources, the main ones being iron and magnesium, and in energy resources (coal and gas).

Ukraine's three main suppliers are: Russia, the Commonwealth of Independent States (CIS), Germany, Italy, China, Poland, Turkmenistan and Turkey. Russia is a major supplier of oil and gas, almost a third of Ukrainian total imports. The Ukraine mainly imports fuels and oil, machinery, vehicles, electric and electronic equipment and plastics. Its main customers are Russia and the CIS (25%), Turkey and Germany, Italy and the USA. Main export goods are iron and steel, fuels and oil, nuclear reactors and boilers, machinery and machine tools (nearly 30% of exports), and cereals. [14]

	Exports		Imports		Balance
	thsd.USD	in % to Jan 2011	thsd.USD	in % to Jan 2011
Total	5326708,3	114,5	5385372,4	106,0	–58664,1
CIS countries	1847403,4	117,8	2618272,1	92,9	–770868,7
Azerbaijan	50060,1	100,6	5840,4	88,1	44219,7
Belarus	117670,3	75,4	305565,8	205,6	–187895,5
Armenia	7427,8	82,3	952,2	119,7	6475,5
Kazakhstan	205672,4	243,5	101455,5	168,9	104216,9
Kyrgyzstan	6082,4	155,7	366,4	86,1	5716,0
Moldova, Republic of	39084,4	97,9	7430,6	164,7	31653,8
Russian Federation	1350448,7	112,8	2190712,1	84,6	–840263,3
Tajikistan	2537,7	73,1	297,5	51,1	2240,2
Turkmenistan	53952,2	574,4	553,3	169,5	53398,8
Uzbekistan	14467,5	98,6	5098,3	54,4	9369,2
Other countries of the world	3479304,9	112,8	2767100,3	122,3	712204,6

 

 

 

Fig.2. Ukraine’s Foreign Trade in Goods

Currently the country's gross domestic product is an estimated 81.4 billion. Some 34.29 billion was made from Ukrainian exports last year alone. As things stand, Ukraine is seeing a lot of financial gain from exports. The country has immense agricultural, mineral and industrial resources which it continues to draw on and profit from. Despite suffering eight years of economic decline, Ukraine has emerged as a country of immense economical importance. Since the turn of the century the country's economic growth averaged 7.4% a year, but this dropped to about 2.6% last year. The high rate of poverty has begun to drop as personal incomes continue to rise. Ukraine's currency has remained fairly stable since its introduction in 1996 and, all in all, the country’s economy has improved in leaps and bounds. Ukraine is now recognized as having the potential to become a major European economy.[22]

Ukrainian exports have certainly helped the country’s economy to stabilize over the past few years. Besides the country’s major exports mentioned above, the country is involved in many spheres of commerce. Crop farming, timber harvesting, coal, ironstone, complex ore and mineral deposit mining are major contributors to the country’s GDP. Grain, sugar and sunflower seeds are the main agricultural yields.

Besides metals and oil products the country is also involved in producing coke, fertilizer, airplanes, turbines, metallurgical equipment, diesel locomotives and tractors. Ukraine also imports energy, mineral fuel, oil, machinery and parts, transportation equipment, chemicals, paper and textiles.

Fig.3. Ukraine exports by month

Ukraine exports were worth 22.6 Billion USD in the second quarter of 2012. Historically, from 1998 until 2012, Ukraine Exports averaged 11331.8600 Million USD reaching an all time high of 27253.0000 Million USD in September of 2008 and a record low of 3587.0000 Million USD in March of 1999.

Ukraine exports mainly steel, coal, fuel and petroleum products, chemicals, machinery and transport equipment and grains like barley, corm and wheat.   More than 60% of the exports goes to other former Soviet Republics countries with Russia, Kazkhstan and Belarus being the most important. Others include Turkey and China.

Fig.4. Ukraine imports by month

Ukraine imports were worth 25.2 Billion USD in the second quarter of 2012. Historically, from 1998 until 2012, Ukraine Imports averaged 11876.4400 Million USD reaching an all time high of 29780.0000 Million USD in September of 2008 and a record low of 3287.0000 Million USD in June of 1999.

Ukraine imports mostly oil and natural gas, machinery and equipment, chemicals. Its main import partners are former Soviet Republics countries (Russia and Belarus are the biggest). Germany, China, and Poland have been also gaining importance in recent years. This page includes a chart with historical data for Ukraine Imports.[17]

2.3. Trade of Ukraine at the international markets.

Foreign trade in commodities. In the transformation of the market economy in Ukraine's foreign trade is one of the important means of filling the state budget. A key problem is the issue of foreign trade to improve the structure of Ukrainian exports and imports, increase in the share of products with high added value and products embodying achieve world NTP. The global economic recovery in early 2011, rising prices for steel products and raw materials contributed to the increase in the volume of merchandise exports in Ukraine.

The positive dynamics of export-import operations with the goods is gradually recovering after a sharp drop in the global financial crisis of 2008, and especially the process became noticeable in 2010-2011. So, in 2011, Ukraine's merchandise exports amounted to 68 billion dollars. U.S. imports - 82 billion dollars. USA. Compared to 2010, exports increased by 33.1%, imports - by 36%.

Fig.5. Ukraines foreign trade in agricultural goods

Merchandise trade deficit of Ukraine in 2011 amounted to 14 billion dollars. USA. Thus, the negative balance of foreign trade grew by 52%, compared with the 9.337 billion. U.S. in 2010 Export-import coverage ratio was 0.83 (-0.85 in 2010). After the global financial crisis of 2008-2009, there was a change of trends in geographical and commodity structure of foreign purchasing activity of Ukraine. In terms of key product groups the largest contribution to the growth of exports accounted for ferrous metals and products from them - 31.2% of total exports (up by 28.4% against 2010). Mineral products accounted for 15% (an increase of 52.4%), machinery and electrical machinery - 9.9% (an increase of 19.2%), vegetable products - 8.1% (an increase of 39.1%), products chemical and related industries -7.9% (an increase of 54.9%), ground transportation vehicles, aircraft, vessels and equipment - 7.1% (an increase of 49.3%), fats and oils of animal or vegetable origin - 5% (an increase of 29.8%).

Fig.6. Structure of foreign trade in agricultural goods

Geographic structure of Ukraine's foreign trade in goods in the period 2010 to 2011 was noted by small fluctuations. The share of CIS countries in the Ukrainian export goods in 2011 amounted to 38.3% of total exports, Europe - 27% (including the European Union countries - 26.3%), Asia - 25.9%, Africa - 4.9%, America - 3.7%. The greatest export to the Russian Federation - 29% of total exports, Turkey - 5.5%, Italy - 4.4%, Poland 4.1%, India - 3.3%, China - 3.2% Belarus - 2.8%. Imports from CIS countries amounted to 45% of the total, Europe - 32.8% (including from the European Union - 31.2%), Asia - 16.1%, America - 4.7% Africa - 1.1%, Australia and Oceania 0.2%. In total imports most revenue from the Russian Federation - 35.3%, Germany - 8.3%, China - 7.6%, Belarus - 5.1%, Poland - 3.9%, USA - 3, 1% , Italy - 2.4%.

Fig.7. Geographic structure of foreign trade in agricultural goods

The volume of commodity exports in the first half of 2012. amounted to 889.9 million dollars. U.S. import - 2257.1 million, compared with the first half of 2011. exports increased by 19.6%, imports - by 20.5%.The negative balance of foreign trade was 1367.2 million, export import ratio was 0.39. Foreign trade operations in goods with partners from 132 countries. Exports to CIS countries amounted to 54% of total exports of goods to EU countries - 17.1%. Over a third of export region was carried to the Russian Federation. Significant also are export items to India, Kazakhstan and Germany.[15]

Increased compared with the first half of last year, exports of goods to India, Iran, Islamic Republic of, Japan, Belarus, Russia and Egypt. Decreased exports to Spain, Germany and Kazakhstan. The most important was the supply of fats and oils of animal or vegetable origin, paper and cardboard, cocoa and products thereof, grains, rubber, rubber, sugar and sugar confectionery, prepared foods from the grain. 
Compared with the first half of 2011. significantly increased exports of cereals, fats and oils of animal or vegetable origin, prepared foods from grain. Imports from EU countries amounted to 51.5% of total imports of goods, CIS countries - 25.4%.

Fig.8.Ukraine third largest corn exporter.

Receipt of goods from Russia, Germany, Belarus, China and Poland together accounted for more than half of the total volume of imports of goods. Significantly increased compared to January-June 2011. import supplies from Turkey, the Netherlands, China, Italy, Great Britain, Germany, Hungary, USA, Poland and Belgium. The basis of the commodity structure of imports of the region in the first half of 2012. were mechanical machines, surface vehicles other than railway, mineral fuels, mineral oils and products of their distillation and pharmaceuticals.

March 2012 became the most successful month for the export performance in the history of sugar beet industry in Ukraine. During March 2012 it was exported 16.42 tonnes of sugar, which is 50% more than in September-February 2011/12 marketing year (MY). In general, in the current marketing year, Ukraine exported 27.7 thousand tons of sugar.

The volume of sugar exports from Ukraine in March exceeded the volumes exported during the first six months of the current marketing year.

The industry, despite the surplus year, continues to evolve, and the major players are looking for all possible ways to continue to improve the efficiency of the sugar business and to prevent stagnation of the industry. On the other hand, the increase in sugar exports also indicates that the sugar producers is difficult to find a market at affordable prices in the domestic market, which makes contact to seek export markets. The main consumers of Ukrainian sugar for today are: Kazakhstan, Lebanon, Kyrgyzstan, the Syrian Arab Republic, Turkmenistan, Croatia, Slovakia, Georgia and others

At the beginning of 2012/13 MG in the absence of imports of raw sugar transient stocks of sugar will be about 550 thousand tons, taking into account the volume of sugar purchased by the Agrarian Fund. Production of sugar in the crop area of about 500 hectares and average yield of 2 million tons.[24]

The largest share of the total exports accounted for Myronivsky, Yagotinsky, Kiev Svyatoshinsky counties and cities Borispol White Church. The largest import entry in Kiev Svyatoshinsky, Boryspil, Myronivsky Brovarsky districts and cities Borispol Brovary Obukhov.

Foreign trade in services.

 In Ukraine, the trade surplus in services for 6 months in 2012 amounted to 3 billion 361 million dollars, reports the State Statistics Service (State Statistics). At the same time, the positive balance of foreign trade in services for the first half 2011 amounted to 3 billion 795.9 million dollars this way, foreign trade surplus in services of Ukraine in the first half of 2012 decreased by 11.4%.Exports of services for the first half 2012 amounted to 6 billion and $ 588.8 million, compared to the same period last year, up 99%, imports amounted to 3 billion and $ 227.8 million increased by 12.8% .

Foreign trade operations services with partners 217 countries.The largest share in the total volume of Ukrainian exports of services were transport (65%), miscellaneous business, professional and technical (13.6%) services. Increased exports of computer services - by 97.5 million (42%) and auxiliary transport services - by 86.5 million (38.2%), travel services - by 85.4 million (at 48.9%), various business, professional and technical services - by 38.2 million (4.4%), insurance - 31.4 million (78%), air transport - 30 $ 6 million (4.5%) and construction services - $ 22 million (25.9%).While simultaneously reducing the volume of pipeline transportation services - by 314.6 million USD (15.7%), the railway - 59.6 million (6.8%), repair services - by 38.2 million (12.8%), financial - by 29.1 million (18.5%), communication services - to $ 28 million (16.8%) and other business services - by 7.2 million USD (9.9%).Services exports to CIS countries amounted to 45.6% of total exports, the European Union countries - 27.8%.The main partner countries in the export of services remains Russia, which accounts for 2 billion to $ 702.1 million (41% of total exports).That the services of the CIS countries, has increased, compared to the same period last year by 60.2 million (2%).The highest growth was observed in the volume of exports of services provided Kazakhstan - 33.9 million (up 57.2%), Turkmenistan - 27.1 million (45.8%) and the Russian Federation - 12 million (0.5%). This will reduce the amount of services provided to Belorussia - 25.3 million (32.6%).[11]

The volume of exports of services to other countries in the world has decreased, compared to the first half of 2011, to 129.5 million USD (3.5%). Reduction accomplished in the amount of services rendered in Switzerland - at 318.1 million USD (55.3%), Austria - 37.2 million (33.8%), Belgium - 21.1 million dollars . (14.7%) and the United States - 10.9 million (3.1%). Simultaneously, increased exports of services Marshall Islands - at 95.9 million dollars (9.8 times), and the UK - 45.1 million (14.8%), Estonia - 37.7 million ( 51.4%), Cyprus - 27.7 million (13.2%), Germany - 25.8 million (14.3%), the Netherlands - 24.8 million (55.1%), India - 15.7 million (95.6%), Virgin Islands (British) - 15.6 million dollars (12, 2%), Greece - $ 13.8 million (33.1%), Spain - 13.3 million (68.9%), Israel - 13.3 million (27.4%), France - to 12.8 million (23%), Poland - 11.3 million (19.3%), Latvia - 10.6 million (57.3%) and Finland - 10.3 million USD(46.3%).

The largest share in the total imports of services amounted to transportation services (24.9%), financial (14.7%), miscellaneous business, professional and technical (14.3%), public services, not elsewhere classified (9, 4%), and travel services (8.7%).

Imports of services increased, compared to the first half of 2011, to U.S. $ 365.6 million due to growth in the volume of construction services - by 80.1 million (2.8 times), services of travel - 71.2 million (34.1%), railway transport - by $ 61 million (24%), public services, which are not classified in the other categories - 51.7 million (20.6%), insurance - 35.7 million (56.4%), other business services - by 33.2 million (32.3%), royalties and license - 33.2 million ( 17.8%), auxiliary transport services - by 25.1 million (65.4%). This will reduce the volume of imports of financial services - by 45.9 million (8.8%) and various business, professional and technical services - by 38.2 million(7.7%). Imports of services from CIS countries amounted to 17.8% of total imports from the European Union countries - 55.2%. The volume of services received from the CIS countries increased, compared to the same period last year by 86.4 million (17.7%), including from the Russian Federation - by $ 62 million (15.5%) and Turkmenistan - 14.1 million (2.9 times). Imports of services from other countries increased by U.S. $ 279.2 million (11.8%) due to the growth of services received from the UK - by 74.6 million (24.6%), Turkey - 65.8 million USD (65.5%), Poland - 30.7 million (50.5%), Germany - 26.3 million (12.4%), Israel - 21.2 million (2.1 times), Estonia - 15.4 million (3.2 times), and Hungary - 14 million dollars (33.6%).