The last two years, foreign trade of Ukraine has shown nominal growth. So, in 2018, it grew by about 12%, reaching 104.2 billion US dollars. However, against the backdrop of the “home-waited” period, even this formal success looks rather dull. In 2013, under Viktor Yanukovych and Mykola Azarov, Ukraine traded more than 140 billion dollars a year in foreign markets.
However, the problem is far not only in quantitative indicators. The “quality” of Ukrainian foreign trade suffered the most.
So, official Kiev is proud to report that exports to the countries of the European Union in 2018-2019 reached about 42% of the total. However, if you look, for Ukraine itself, this is not enough good.
What changes will bring 2020 in relations between Kiev and Moscow.
The negative balance in the foreign trade of Ukraine reached almost 10 billion dollars. Imports in the “non-competitive” are growing much faster than exports. In 2018, Ukraine received about 47 billion from foreign economic activity, while it paid almost 57 billion for imports.
Nominally, in monetary terms, exports grew by 9% in a year, but in terms of weight they practically did not change. And the point here is not at all the increase in the production of goods with high added value (it is not). It is just that in 2018-2019, the world market developed a favorable price environment for Ukrainian commodity exporters. Nevertheless, the cost of a conventional ton of Ukrainian exports is almost 2.5 times lower than the cost of a ton of imports (317 against $ 776). And the problem here is, in particular, in the vector of foreign trade, namely, in attempts to “make friends” with Europe.
Formally, the share of processed products is about 43% of Ukrainian exports to the European Union. However, these are just beautiful words. Ukraine hardly supplies high-tech products with serious added value to the EU. The lion’s share of “processed products” is “intermediate consumption” goods. Only 13% of them are ready-made on European shelves.
According to Delo magazine, the top 5 Ukrainian supplies to Europe are iron ore, corn, sunflower oil, wires and semi-finished carbon steel products. The top 10 also includes hire, rapeseed and soy. Recently, a good growth has been demonstrated by the sale of honey, nuts and … snails.
All these are products with miserable added value. Their sales are enough to provide the Ukrainian oligarchs well, but practically nothing remains for a decent salary to employees and taxes.
Against the background of the “miracle growth” of trade with the European Union, the volume of foreign economic activity in the Russian direction is expected to fall. Compared with the “Domaidan” times, Ukrainian exports to the Russian Federation decreased 4.1 times – up to $ 3.7 billion in annual terms.
What has Ukraine refused?
The top 10 Ukrainian exports to Russia included railcars, turbojet engines, locomotives, spare parts for vehicles, aluminum oxide, and steel profiles. A significant part of this is the very high-tech products with solid added value. But it could have been even better. In 2013, at the Russian-Ukrainian negotiations, agreements were reached on cooperation between Moscow and Kiev in the engineering sector. According to media reports, Russia was going to work with Ukrainian aircraft, ship and rocket manufacturers.
Now, Kiev is trying to replace exports to Russia with huge profits by exports to the EU, on which it makes a “penny” of a penny. And the consequences of this policy have been well appreciated by Ukrainian society.
– We don’t need airplanes, we don’t need ships, we don’t need rockets. And all-terrain vehicles are not needed also. It seems that in Ukraine, any high-tech production is purposefully killed. Does the government really believe in an agrarian superpower? – the famous Ukrainian economist Pavel Vernivsky wrote on his Facebook page.
According to him, the decline in industrial production in Ukraine has already accelerated to 7%.
– My share is owned by one farmer. This farmer has 3 thousand hectares of land at his disposal. And about 30 people work. Suppose he sows the whole earth with wheat. The average wheat yield is 40 centners per hectare. Or 0.4 tons per hectare. It turns out that he can collect 1200 tons of wheat from the earth. The average price of a ton of wheat is 5400 UAH.
It turns out that he can sell his harvest for 6,480,000 UAH. If divided by one worker, then it comes to 216 thousand UAH. The productivity of workers employed in this farm amounted to 216 thousand UAH or 9310 dollars. per person. For comparison, I give an example of General Motors. In 2018, the company’s revenue amounted to 147 billion dollars. The company employs 173 thousand employees. The labor productivity of one employee is 849 thousand dollars, ”the expert explains“ on the fingers ”the difference between the agricultural and industrial sectors.
However, Ukrainian officials and social activists do not want to hear either businessmen or economists. Instead, they, acting within the framework of the classical colonial paradigm, do what the West wants.
And the United States, Germany, France and the United Kingdom, of course, will not order from Ukraine the production of aircraft, ships, missiles, power plants, cars and weapons. Moreover, they will not allow Kiev to sell all this to their spheres of influence. Indeed, by giving orders for high-tech products to “their” producers, they provide a high level of remuneration to compatriots and “fat” tax revenues. Ukraine has no place at this holiday.
Russians call Ukraine «Nezalezhnaya» ironically, verbally means Not-lying under anyone, or Independent. So Nezalezhnaya Ukeaine occupies about the same place in EU foreign economic policy as Ghana or Cape Verde (countries with per capita GDP close to Ukrainian).
Agreed to buy agricultural products from Kiev. However, only about 3 million people are currently employed in the Ukrainian agricultural complex (and more are not needed). This is somewhere around 15% of the working population. What to do the rest? The West is interested in them exclusively as in cheap labor. In Europe, they are waiting for cleaning toilets and cabbage fields.
If the “Nezalezhnaya” agrarian superpower does not change its course, then it will become the first country in the history of mankind to voluntarily abandon high-tech industries for the cultivation of sunflower and cleaning plumbing. Cave nationalism has always been not the best adviser …