East European countries East European countries outside Russiaoutside Russia

Economic GeographyEconomic GeographyI. International Business bachelor study programme (BA)I. International Business bachelor study programme (BA)Spring term 201Spring term 20144/201/20155..CUB Department of Economic Geography and Futures StudiesCUB Department of Economic Geography and Futures Studies

dr. Jeney Lászlódr. Jeney LászlóSenior lecturerSenior lecturer

jeney@caesar.elte.hujeney@caesar.elte.hu

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State of economic State of economic development of Ukraine development of Ukraine among the post-Soviet among the post-Soviet countriescountries

GDP per capita, PPP in the post-Soviet countries, 2010Source of data: Worldbank

0

5000

10000

15000

20000

25000

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Russian

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Lithu

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Latvia

Belar

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Kaza

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Azerba

ijan

Turkmen

istan

Ukraine

Armen

ia

Geor

gia

Uzbe

kistan

Moldov

a

Kyrg

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Tajik

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curr

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East European countriesOther successor countires

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Strong economic ties to Russia

SU times: countries were tied closely together After transition: UA and BY prefer greater

independence Old connections hard to break

– Eastern UA: most important iron and steelmaking region industries depend on: import oil and natural gas (mainly from Russia) 85% energy needs

– BY: heavy industry 50% of trade with Russia New connections difficult to form

– SU: developed heavy industry equipment was not kept up to date

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Economy of UkraineEconomy of Ukraine

Till 1970’s: belonged to the growth poles of the SU– Main supplier of food and heavy industrial centre– Share in the SU: 18,5% of population, 26% of coal production,

36% of iron industry– Heavy industry: 80% of industrial employment, 90% of

investments, 70% of production Conservation of bad economic structure after transition

– Role of heavy industry, agriculture remained– Critical dependency of oil and natural gas supply (from Russia,

Kazakhstan and Turkmenistan)– Soviet connections are hard to break, out-of-date firms are not

competitive Economic lagging

– Per capita GDP, 1990: 4700$ (94% of the SU average of the former SU) mid-position in the rank

– Living conditions (living area, salaries of employees, savings): also under the post-Soviet average

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Ukrainian EmploymentUkrainian Employment

Ukrainian employment– Manpower: 22.3 mn

But: unemployment rate: 2.7%

– Rate of skilled workers: 50% But: lack of management

– Sectoral composition: Employment: A: 25%, I: 20%, S: 55% GDP: A: 17% I: 43% S: 40% But: rising global prices for steel

– 2005: important changes

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Economic Geography of Economic Geography of UkraineUkraine

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Ukrainian employment– Manpower: 22.3 mn

(unemployment rate: 2.7%)– Rate of skilled workers: 50%– Empl: A: 25%, I: 20%, S: 55%– GDP: A: 17% I: 43% S: 40%– 2005: important changes

Regional differences– East: Russian minority, heavy

industry more developed– West: Ukrainian majority,

Hungarian, Polish, Romanian minority

Regional development inequalities 2000

Better state of Belorussian economy

Russian: main trading partner

1991: Russian – Belarusian Federation

Cheap Russian oil and natural gas vulnerable

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888888

Southern Caucasus Southern Caucasus (Transcaucasus)(Transcaucasus) Georgia, Armenia

– Mountainous (peaks above 5000 m)– Georgia: East Orthodoxy, Armenia: autocephaly

Christianity Azerbaijan

– More flat (Caspian Sea coast: areas below sea level)– Muslim stronger linkages towards Asia

Historical states– BC 100: historic Armenia: also East part of contemporary

Turkey (mount Ararat)– From the AD 1000 to 1200: Georgia– Turkish occupancy– Russian rulers till 1991

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Economy of Southern Economy of Southern CaucasusCaucasus In SU times (till 1991)

– Georgia: 90% of SU’s tea and citrus fruits– Armenia: fruits (mainly grapes)

2000s: steadily improved Economies suffered greatly from the ethnic

conflicts Increasing industrial and service sectors

– Black Sea: SE part of ex-’Soviet Riviera’ (Batumi, Suchumi)

Developing trading relationship with US, EU and Iran– Georgia: reduction dependency on Russia 99

Ethnic based conflicts and Ethnic based conflicts and their economic impactstheir economic impacts

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Area of Russian influences

Periods of Russification1) Early 1800s2) Soviet times

Permanent movements within the SU– Out-migration of Russians

to Belarus and Ukraine till 1989 to industrial concentrations

Share of ethnic Russians– Belarus: 13% (63% speaks

regularly Russian)– Ukraine: 22% Crimean

Peninsula, industrial areas of Eastern Ukraine, cities

– Russia: 82% (re-migration)1111

Russia: mixture of political units

52 % of the minorities: autonomous territorial units:– 15 national autonomous

republics– 2 autonomous districts

(okrug) Homelands in European

Russia– North Europe, Urals and

Middle Volga: relative higher share of Russians

– North Caucasus: Russian minority

90 numerically significant recognized nationalities– 55 nationalities without

republic status (homeland)1212

Official constitutional position of republics

1990s: the Kremlin gave up much of its power– Also other official language besides Russian– 1350 newspapers, 300 TV and 250 radio channels in 50

minority languages and also in the federal TV and radio broadcasting

– 75 minority languages taught in 10 thousand schools– Minority organisations (2000)

2000s: the Kremlin took it back– European Council: discrimination in legislation– Public actions are hampered– Lots of minorities are out of minority education– Lack of minority teachers, books– Maintenance of minority culture is insufficient

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Ethnic conflicts in Caucasus Region

Economic and cultural similarities: mountaineer identity

Ethnically and linguistically one of the most complex area of the World: Christians and Muslims

Russian control from mid 1800s Soviets divided minorities

– Karbardians (have more in common with Cherkessians), but grouped together with Balkars

– Division of Ossethians– Armenians in Azerbaijan

(Nagorno-Karabakh) War between 2 member states (Armenia and Azerbaijan) during the SU regime

– Azeri Exclave: Nakhichevan

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Resistance against Russian rule

North Caucasus: remained part of Russia– 1991: Chechnya also attempted its independence

2 bloody wars in Russia (1994–1996 and after 1999 more 100 thousand victims)

South Caucasus: independent states: Georgia, Armenia and Azerbaijan

Ethnic based tensions in the successor states– Georgia: Abkhazia (Abkhasians), South Ossetia

(Ossetians)– Azerbaijan: Nagorno-Karabakh (Armenians)– Moldova: Transdnistria (Russians)– Ukraine: East Ukraine, Crimean Peninsula

(Russians)1515

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Conflicts and closed Conflicts and closed bordersborders Georgia: conflict with Russia

– Abkhazia: occupied by Russia (entrance from Georgia)

– South Ossetia– Closed Georgian Russian border– Good relationship to the West (EU and NATO)

Armenia: conflict with Turkey and Azerbaijan– Armenian genocide by Turkey (not declared by Turk.)– Lost territories (Mt. Ararat) in Turkey– Karabakh question: Armenians in Azerbaijan– Closed Arm–Turk and Arm–Azeri borders– Good relationship with Russia

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