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, 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 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 Prime Minister heads the Cabinet. On 25 May 2014, Petro Poroshenko was elected President of 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. It is estimated that about three million people in two eastern regions of Ukraine affected by conflict did not vote, and in occupied Crimea, another 1.8 million people also did not take part. Presidential elections were held in May 2014, with President Poroshenko elected. Prior to the elections, President Viktor Yanukovych was ousted in a popular uprising lasting from November 2013 to February 2014. At issue was the former Ukrainian Government’s announcement on 21 November 2013 that it was suspending preparations for the signing of the EU-Ukraine Association Agreement, and would instead pursue closer ties with Russia. The announcement sparked anti-government demonstrations largely centred in Kyiv’s Maidan square. Following the ousting of Mr Yanukovych, beginning 26 February 2014, Crimea, which has a high proportion of ethnic-Russian residents and is home to the Russian Black Sea Fleet, was occupied by unmarked Russian Armed Forces. On 16 March an illegal snap referendum was conducted in Crimea, and on 21 March Russia purported to annex Crimea.

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, which began in April 2014. On July 17, 2014, Malaysian Airlines Flight MH17 was downed over eastern Ukraine, killing all 298 people on board, including victims who called Australia home. 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. 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. However, the IMF program stalled early 2011 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 is predicted in 2015. The World Bank is, however, predicting growth of 2 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. A Deep and Comprehensive Free Trade Agreement (DCFTA) between Ukraine and the EU is expected to enter into force on 1 January 2016. However, the immediate prospects for Ukraine’s economy 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 Australia’s first Ambassador to Ukraine, Doug Trappett, arrived in January 2015. Australia also has a 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, 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.

Updated December 2015


Last Updated: 17 July 2014