Trade Relations with and between Economies in Transition: Lessons from the Case of Ukraine

Trade Relations with and between Economies in Transition: Lessons from the Case of Ukraine

Tetiana Tsiupko (Università della Tuscia – Viterbo, Italy) and Margaret Loseby (Università della Tuscia – Viterbo, Italy)
DOI: 10.4018/978-1-5225-0451-1.ch007
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Abstract

The chapter analyses the transition process from a centrally planned towards a free market economy, with particular reference to countries that constituted the Former Soviet Union. Noting that the varied strategies applied in individual countries have led to differing degrees of success, the chapter aims to identify the factors restraining economic growth in Ukraine. It describes the way in which the pattern of trade existing formerly with the USSR had shaped the structure of the Ukraine economy. At present, Ukraine's strategy for freer trade with the rest of the world and in particular, with the European Union is conditioned by this former situation. It has contributed strongly to Ukraine's current geo-political dilemma. The need for the country to find equilibrium in its trade strategies with countries of the Former Soviet Union, with Europe and the Rest of the World is emphasized, and the difficulties involved are explained.
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Introduction

The process of transition from a centrally planned to a liberal or free market economy is a challenging one. In the case of the countries of the Former Soviet Union (FSU) it has invariably led, in the early stages, to recession and subsequently to different types of transition, which have enjoyed varying degrees of success.

The chapter begins by reflecting on the process of transition and examines the causes of the initial phase of recession, associated with unemployment and hyperinflation. It then describes the difficulties encountered specifically by the Ukrainian economy during transition. The features of Ukrainian external trade, of particular importance for the health of the economy, are examined in some detail.

The overall aim of the chapter is to identify some of the bottlenecks to economic growth in Ukraine and to illustrate how these are related to the economic structure inherited from the past and to the unsuitable approaches to transition policy adopted by former governments.

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