Unit I Text I. Foreign economic activities of ukraine

Long-term forecast of development of foreign trade of any country are always a top-priority issue both for domestic and foreign investors and businessmen. The attractiveness of sectors of the economy that are highly profitable in the long run is the subject. In this text we are talking about a crucial impetus in the development of the economy of the country.

Numerous economic and political factors and their combined effect determine the development of foreign trade of this or any other country.

Due to the forthcoming European integration of Ukraine the Ukrainian government has elaborated four directions of foreign economic trade for the nearest decades. Let’s review the potential in these directions.

1. First of all – the issue of providing food for an ever growing population. The “green revolution” and other effective measures have given hope of relief from the lethal threat of hunger in the largest and the most “hungry” countries in the past – Indian and China. But countries in Africa have taken their place. There is no way to know which countries will take the place of the African countries once those countries become sufficient food suppliers. However, while seemingly pessimistic, it is not unlikely that other countries won’t then arrive and the places of the African countries. Thus, those countries that have the ability to grow food products such as grain and vegetables and to produce meat, milk and other commodities will always be influential in the world market and in world politics. Ukraine with the potential of its fertile land resources, favorable climate and with its thousand – year traditions of husbandry will always be one of powerful exporters of processed food products and unprocessed foodstuffs. Investments in industrial agriculture should never devalue. Undoubtedly, a certain cycle can be observed and of course is present in the agriculture of Ukraine, as well as in other countries that export food products. Last year Ukraine’s grain harvest amounted to almost 40 million tons and more than 11 million tons of grains were exported. Ukraine is one of the top five leading grain exporters in the world. But, for the year 2005, a year of disastrous crop failures – only about to import almost two million of food grain though at the same time Ukraine’s export of fodder grain increased. A similar situation occurred in the year 2002 in Canada – one of the big exporters of grain. The potential for harvesting huge crops in Ukraine is so large that foreign companies with leading technologies are eager to invest in Ukrainian agriculture. Currently Ukraine is just beginning to apply modern technologies in agriculture. So in the long run Ukraine will always be an influential exporter of grain products in the world’s markets. Even with tough competition Ukraine’s advantage will be the natural quality of its unprocessed and processed agriculture products.

2. Energy is the second area. The whole last century can be called “a century of struggle” of the developed countries for energy resources. There is even such a saying – “politics smells like oil”. The third millennium began under the same “slogan”. At the same time scientists are optimistic about discovering soon a technology that will provide full and even an unlimited supply of energy for the needs of modern civilization. But first of all, there are grounds to doubt such excessive optimism, and secondly, there will always be a need for machinery, equipment for generation, transformation, distribution and consumption of energy. Therefore, those countries that have a sufficient supply of raw resources or production potential for the manufacturing of applicable equipment for the whole energy supply “logistic chain”, so to say, will always be present with their products in the world market. Ukraine will always be among such countries. Primary energy resources are limited in Ukraine (except for renewable energy sources like wind, solar, geothermal, hydro energy). However, the country has well-developed sectors of energy machinery production, extraction and transportation of oil, natural gas, coal (fossil fuel sources). Ukraine’s current reduction in the export of such machinery is a consequence of the reduction in foreign trade since the breakup of the Soviet Union. This situation is temporary. Ukraine will inevitably expand its presence in the world market offering its products and new high technologies for many sectors of economy. Ukraine’s share, which is insignificant now in the world trade market, will be increasing. Confidence in such future development is based on the fact that Ukraine possesses the necessary production and intellectual potential, and the overall demand for such products will be increasing in the future.

3. The third prospective direction in exporting Ukrainian goods and services is in the production of equipment and in the development of technologies for the protection of environment and humankind itself. There is no other country in the world that spends so much on ecology (8% of the state budget) as Ukraine does due to the necessity of protection for its population from the consequences of the Chernobyl disaster. It can be confidently stated that within a decade Ukraine will eventually become one of the leading countries in the field of providing high technologies and products in the world market for solving ecologyrelated issues. This will be one of Ukraine’s intellectual and production potential of the formed military complex can be re-oriented and used for solving ecology issues. As time goes by, investors who put their resources into this field of Ukrainian science and economy will become “founders” of new spheres for the world economy.

4. Lastly, production of military products is the fourth direction for Ukraine’s foreign trade. Such direction is significant now and will continue to be so in the future. Today Ukraine is in the top ten leading countries in the field of production of military equipment and technologies. During the first years of independence Ukraine was selling its military surplus that had accumulated during the years of Cold War. Such activity of the young independent state didn’t really bother its competitors that reasonably believed that the country would soon run out of stock of military products. But already in the past years new military products constituted three fourth of Ukraine’s total military production. The well-known radar system “Kolchuga” was among such products. In the past years Ukraine has become more noticeable in the world market in the specific field of military products. After September, a new threat to the world appeared – terrorism. That also causes the demand for specific sophisticated military equipment to increase. Therefore, this direction in foreign trade for Ukraine was, is and will be one of its priorities. Ukrainian military potential can even increase if the country decides to cooperate in this field with Russia and several other countries of the European Atlantic community. Such intentions have already been declared and even some agreements on joint efforts in this field have appeared. But Ukraine doesn’t take part in the annual exhibition of the means for fighting against terrorism. This is the core evidence for the country’s progress in the sphere of military production. The reason for this is that it became a “custom” in Ukraine to evaluate the competitive level of its products by considering what “artificial” obstacles are created for their promotion of foreign markets.