Ukraine country brief

Overview

Ukraine is the second largest country in Eastern Europe. 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. 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. On 18 February a violent government crackdown on protestors in the square failed to end the protest and led to Mr Yanukovych fleeing the country on 21 February.

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 supporting and enabling the subsequent 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, 38 of whom called Australia home. Two investigations into the downing are underway. The first is an investigation under International Civil Aviation Organization (ICAO) requirements led by the Dutch Safety Board. The second is an international criminal investigation, to which Australia is a party. In September 2014, the Dutch Safety Board released an independent preliminary report and the final report is expected in October 2015.

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. It is heavily reliant on Russian energy imports, especially natural gas. 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 did not grow at all in 2013 and is estimated to have contracted by 6.5 per cent in 2014. 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. However, the immediate prospects for Ukraine’s economy remain uncertain given the violent unrest in Ukraine’s eastern regions.

Bilateral relationship

Ukraine opened an Embassy in Canberra in March 2003. In November 2014, Australia established an interim Embassy in Kyiv and Australia’s first Ambassador to Ukraine arrived in January 2015. Australia also has a Consulate in Kyiv, headed by an Honorary Consul. Australia and Ukraine have an Agreement on Trade and Economic Cooperation, signed in March 1998. In May 2009, AUSTRAC signed a Memorandum of Understanding with Ukraine on the Exchange of Financial Intelligence.

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 2002, the Australian Federation of Ukrainian Organisations helped establish Ukraine–Australia House in Kyiv to promote commercial ties.

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, 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 non-lethal support in the form of cold weather clothing to Ukraine’s military. 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$93 million in 2013-14 and consisted mainly of coal and other ores and concentrates. In the same period, Australia imported A$42 million worth of products from Ukraine, mainly fertilisers, and electrical circuits equipment.

Last updated: May 2015


Last Updated: 17 July 2014