Ukraine country brief

Overview

Ukraine is a large country, covering over 603,000 square kilometres. It borders Russia to the east, Belarus to the north, Poland, Slovakia and Hungary to the west, Romania and Moldova to the southwest, and the Black Sea and Sea of Azov to the south. Kyiv is the capital of Ukraine.

Ukraine became an independent, democratic state following the Ukrainian Parliament’s (Verkhovna Rada) passing of the Act of Declaration of Independence on 24 August 1991 and a subsequent referendum held on 1 December 1991 in which approximately 90 per cent of voters expressed support for the Act. Ukraine’s population of 44.3 million (2014 estimate) celebrates 24 August as the country’s national day.

Ukraine is a unitary state composed of 24 oblasts (provinces), one autonomous republic (Crimea), and two cities with special status (Kyiv, its capital, and Sevastopol, which is home port to the Russian Black Sea Fleet). In March 2014, Russia purported to annex the Ukrainian territory of Crimea, including the city of Sevastopol. On 27 March 2014, a majority in the United Nations General Assembly passed a resolution on the Territorial Integrity of Ukraine which emphasised that Russia’s purported annexation had no validity.

Political overview

Ukraine is a republic under a semi-presidential system with separate legislative, executive, and judicial branches. The President is elected for a five-year term and is the Head of State. Power over the security structures rests with the President. The current President is Petro Poroshenko. The parliament, Verkhovna Rada, has 450 seats, with members also serving five-year terms. The Rada adopts legislation, ratifies international agreements and approves the budget. The current Head (Speaker) of the Parliament is Andriy Parubiy.

The Prime Minister heads the Cabinet. The Prime Minister is appointed by the Parliament upon the submission by the President. The President proposes a new Prime Minister upon the suggestion of the coalition of parliamentary factions, which includes the majority of MPs. The current Prime Minister is Volodymyr Groysman.

Members of the Cabinet are not MPs, but are politically appointed. Whereas the Defence Minister and Foreign Minister are appointed by Parliament upon the submission by the President, remaining Cabinet Ministers are appointed by Parliament upon the submission by the Prime Minister.

On 21 November 2013, then President Viktor Yanukovych announced that the Ukrainian Government was suspending preparations for the signing of the EU-Ukraine Association Agreement, and would instead pursue closer ties with Russia. The announcement sparked major anti-government demonstrations, largely centred in Kyiv’s Maidan square. The resultant popular uprising lasted from November 2013 to February 2014, and ultimately led to the ousting of President Yanukovych.

Following these events, on 26 February 2014, unmarked Russian Armed Forces and other separatist forces occupied the Ukrainian Autonomous Republic of Crimea, which has a high proportion of ethnic-Russian residents and is home to the Russian Black Sea Fleet. On 16 March 2014, an illegal snap referendum was conducted in Crimea, and on 21 March 2014, Russia purported to annex the Crimean Republic.

Separately, in the eastern provinces of Donetsk and Luhansk, armed men declaring themselves as local militia seized government buildings, police and special police stations in several cities and held unrecognised status referendums. Protracted conflict has since ensued. More than 9,000 people are estimated to have been killed in the military campaign, and more than one million Ukrainians have been internally displaced inside Ukraine, with an estimated 730,000 refugees also having fled to Russia since the beginning of 2014.,/p>

Russia stands accused of providing significant military equipment, personnel, command and other support enabling the violent destabilisation of Ukraine’s eastern regions by pro-Russian separatists.

On 25 May 2014, Petro Poroshenko was elected President of Ukraine. (It is estimated that about three million people in Donetsk and Luhansk did not vote as a result of ongoing conflict, and in occupied Crimea, another estimated 1.8 million people did not vote.) Upon being elected President, Poroshenko vowed to continue the Ukrainian Government military operations to end the armed insurgency in eastern Ukraine.

On 27 June 2014, President Poroshenko signed the European Union (EU)-Ukraine Association Agreement, which serves to deepen political, economic and trade relations between Ukraine and the EU, signalling Ukraine’s decision to pursue closer ties with Europe following recent turmoil surrounding the question of Ukraine’s political and economic future.

Ukrainian Parliamentary elections were held on 26 October 2014. The ruling coalition maintained a majority by winning 303 of the 450 seats, with the Petro Poroshenko Bloc winning 147 of those seats. Arseniy Yatsenyuk was confirmed as prime minister at the first session of the new parliament by 341 votes. On 14 April 2016, however, Yatsenyuk was replaced by Volodymyr Groysman, the then Head of Parliament.

On 17 July 2014, Malaysian Airlines Flight MH17 was downed over eastern Ukraine, killing all 298 people on board, including Australians and others victims who were based in Australia. There are two investigations into the downing, the first of which has been completed.

The first was an investigation under International Civil Aviation Organization (ICAO) requirements, led by the Dutch Safety Board. On 13 October 2015, the Dutch Safety Board released the final report, which concluded that flight MH17 was downed by a BUK surface-to-air missile. The second is an international criminal investigation, conducted by the Joint Investigation Team (JIT) comprising the Netherlands, Malaysia, Ukraine, Belgium and Australia. This investigation is ongoing.

Economic overview

The transition to a market economy has been difficult for Ukraine, stricken, as it was, with eight consecutive years of economic decline following its independence from the Soviet Union. Ukraine has significantly diversified its energy imports from Russia, particularly natural gas (although it remains fairly reliant on Russian uranium). Following independence, the Ukrainian Government freed up most prices and began a program of privatisation.

In August 2010, Ukraine reached an agreement with the IMF for an additional US$15.1 billion to put the country on the path to fiscal sustainability, reform the gas sector, and shore up the country’s banking system. The years 2010 and 2011 saw economic growth resume. In early 2011, however, the IMF program stalled due to the Yanukovych Government’s lack of progress in implementing key gas sector reforms.

Real GDP is estimated to have contracted by 6.8 per cent in 2014, and a GDP contraction of 5.5 per cent was predicted in 2015. The World Bank is, however, predicting growth of two per cent in 2016. On 27 March 2014, the IMF announced an assistance package of US$14-18 billion to support Ukraine’s democratic transition. In February 2015, the IMF announced a further assistance package of US$17.5 billion.

The signing of the EU-Ukraine Association Agreement in June 2014 was aimed at deepening Ukraine’s economic relationship with the EU. On 1 January 2016, the Deep and Comprehensive Free Trade Agreement (DCFTA) between Ukraine and the EU entered into force. The immediate prospects for Ukraine’s economy, however, remain uncertain given the 12 February 2015 Minsk II agreement – to end the conflict in eastern Ukraine and reach a political solution – is yet to be fully implemented.

Bilateral relationship

Ukraine opened an Embassy in Canberra in March 2003, with current Ambassador Mykola Kulinich arriving in November 2015. In November 2014, Australia established an interim Embassy in Kyiv and appointed Australia’s first Ambassador to Ukraine in January 2015. Australia is currently represented in Kyiv by a Chargé d’Affaires. Australia also has a Honorary Consulate in Kyiv, headed by an Honorary Consul. Ukrainian President Poroshenko made an official visit to Australia in December 2014.

The 2011 Census recorded 38,791 people who identify as having Ukrainian ancestry. The active Ukrainian community in Australia plays an important role in developing bilateral relations. For example, in 2015, the Australian Federation of Ukrainian Organisations helped to establish the Australia-Ukraine Chamber of Commerce and organised OzUke2015, a bilateral relations conference held in Melbourne.

In June 2012, Australia donated €1 million to the Chernobyl Shelter Fund to help transform Chernobyl into a safe and secure site. In May 2014, Australia donated A$300,000 for the Organization for Security and Co-operation in Europe (OSCE) Special Monitoring Mission to Ukraine, aimed at reducing tension and fostering stability and security in Ukraine.

On 3 September 2014, then Prime Minister Abbott announced a package of assistance to Ukraine. As part of that package, Australia provided A$1 million in humanitarian aid to the International Committee of the Red Cross. Australia also provided over A$4 million worth of support in the form of cold weather clothing to Ukraine’s military. Australia has also provided loans under Australia’s commitments to the IMF as part of the IMF assistance package linked to economic reform in Ukraine.

On 19 June 2014 and 1 September 2014, Australia imposed targeted financial sanctions and travel bans on individuals who have been instrumental in the Russian threat to the sovereignty and territorial integrity of Ukraine. On 31 March 2015, Australia implemented expanded sanctions against Russia, which parallel those of the EU.

Bilateral economic and trade relationship

Australia’s trade relationship with Ukraine is modest. Merchandise exports from Australia were valued at A$114 million in 2014 and consisted mainly of coal and other ores and concentrates. In the same period, Australia imported A$34 million worth of products from Ukraine, mainly fertilisers. On 1 April 2016, Australia and Ukraine signed a Nuclear Cooperation Agreement, which would enable Australia to export uranium to Ukraine – one of the world’s top ten generators of nuclear power. The Agreement provides Ukraine the opportunity to diversify its energy supply, and will enhance bilateral cooperation between Australia and Ukraine on nuclear-related activities, including nuclear safeugards, security, safety and science.

Updated May 2016

Last Updated: 1 June 2016