Ukraine is bordered by seven states; to the south it lies on the Black Sea and the Sea of Azov. An independent Ukrainian state was established in 1918, but was overrun in the same year by Soviet forces from the east and Polish forces from the west. In 1991, Ukraine again became an independent state. The country has historically been divided between the nationally conscious and Ukrainian-speaking west (including areas which were part of Poland until World War II) and the east, which has a large ethnic Russian population.

In the cities and countryside of western Ukraine, Ukrainians make up the vast majority of the population. Russian is spoken by 60% of the people, and in several of the large cities of the east and south, ethnic Russians form a majority, a legacy of 19th-century industrialization and of more recent migration in the Soviet era. At independence, most Russians accepted Ukrainian sovereignty, though tensions remain.

In Crimea, however, where Russians make up two-thirds of the population, the central government is wary of separatist tendencies. The Crimea's other main minority, besides ethnic Ukrainians, is the Turkic-speaking Tatar people. Deported en masse to the eastern USSR in 1944 under Stalin, the Tatars have been returning to the Crimea since 1990 and now make up 12% of its population. There is a Romanian-speaking minority in the Odessa region.

Strengths

Well-educated workforce. Good urban transportation infrastructure. Potential for grain and food export. Mineral reserves. Technological potential, especially in aerospace and computers.

Weaknesses

Failure to reform centrally planned economy. High inflation. Weak currency. Huge debt. Antireform political elites. Inefficient, subsidized manufacturing industries. Corruption.

Profile

For ten years the economy contracted by over half, until real growth was at last recorded in 2000. Privatization of large enterprises has barely begun. There are many traders and street vendors, but bureaucracy stifles private enterprise and investment. Lack of land reform holds back agriculture in the "bread basket" of Europe. Controversial legislation passed in 2001 paved the way for the sale of farmland after 2004.

Ukraine introduced a multiparty system in 1991.

Profile

Ex-premier Leonid Kuchma, who had defeated Ukrainian nationalist Leonid Kravchuk in the 1994 presidential elections, gained increased powers after 1996 constitutional changes. Multiparty legislative elections were first held in 1994, and the strong position of the communists and allied pro-Kuchma groups was confirmed four years later. Kuchma's own reelection in 1999 was fiercely contested, however, with opponents claiming fraud and violent confrontations taking place in parliament and on the streets. The boost which Kuchma gained in early 2000 from a referendum backing electoral changes, and Western enthusiasm for his new pro-reform government, was dissipated by a scandal linking him with the murder of a journalist later that year, and the uncovering of massive financial frauds. The ranks of his opponents included growing numbers of discarded former ministers and the pro-Kuchma For United Ukraine was pushed into second place by the opposition Our Ukraine bloc in legislative elections in 2002.

Main Political Issues

Economic reform and corruption

There is generally more support for economic reform in western and central Ukraine than in eastern regions. There have been spasmodic efforts to promote the transition to a market economy, notably during 2000 under the then prime minister Viktor Yushchenko. Such radicalism has foundered on opposition in parliament, lack of sufficient backing from Kuchma, and problems of high-level corruption as powerful business and political factions vie to gain advantage.

Separatism among ethnic Russians

The Crimean parliament's declaration of independence in 1994 has been the strongest threat so far to Ukraine's integrity. It was resisted and later rescinded, although Kiev reaffirmed Crimea's status as an autonomous republic. A new Crimean constitution was approved in 1999. Donbass has also pressed for more autonomy, and the Donetsk region has voted to make Russian a joint official language.

In the immediate post-independence period Western countries viewed Ukraine as a convenient buffer state between Russia and the rest of Europe. However, their support for Ukraine did not make it strong enough to offset its economic dependence on Russia, especially for fuel. Over time this unqualified backing has been eroded by the West's own relations with Russia, and by distrust of President Kuchma's antidemocratic tendencies. Conversely, Ukraine's ties with Russia, initially seen as a potential aggressor, have been strengthened under Kuchma: a friendship treaty was signed in 1997 and a ten-year economic cooperation accord in 1998. Ukraine signed a trade agreement with the EU in 1995 and was admitted to the Council of Europe in the same year. Despite an ongoing territorial dispute with Romania, a friendship and cooperation treaty was signed in 1997.

Ukraine was a center for arms manufacture under the old Soviet system, and now has a major weapons export trade. A member of the CIS, Ukraine finally resolved in 1997 its long-smoldering dispute with Russia over control of the Black Sea fleet, with agreement on the division of the fleet and a 20-year Russian lease on port facilities in Sevastopol. Meanwhile, the Ukrainian parliament had ratified the START-I nuclear disarmament treaty, and Ukraine's nuclear warheads were transferred to Russia under a trilateral weapons dismantling accord also involving substantial US aid.

In 2000 it was decided that compulsory military service, which lasts 18 months, should be ended by 2015. The armed forces have been slimmed down, with further cuts planned to result in a total strength of 285,000 (including central and administrative staff) by 2005.

Ukraine joined NATO's Partnerships for Peace in 1995, signed a security pact with the alliance in 1997, and applied in 2002 for full membership.

Ukraine imports 80% of its oil and gas (its main source of energy), mostly from Russia. Some gas is in lieu of transit fees for pipelines carrying Russian gas, but it repeatedly fails to keep up payments for the rest. Yet Ukraine has oil and gas reserves of its own. Just under half of electricity is nuclear-generated. Coal is mined, in appalling safety conditions, mainly in the Donbass–Donetsk region.

Ukraine has 5% of global mineral reserves, including the largest titanium reserves, the third-largest deposits of iron ore, and 30% of global manganese ore. There is also mercury, uranium, nickel, and some gold. The metal industry accounted for nearly 20% of GDP in 1997 and 28% of exports. The steel industry has now begun to grow again after seven years of decline.

As a result of the Chernobyl nuclear disaster in 1986 – the world's worst nuclear accident – over three million Ukrainians live in dangerously radioactive areas and 12% of arable land is contaminated. The last working reactor at Chernobyl closed at the end of 2000, under agreements in which Western countries provided large-scale financial assistance. However, nuclear production continues elsewhere because of the cost of Russian oil and gas imports. Coal-fired power plants are old-fashioned, highly polluting, and inefficient. Industrial pollution is widespread, especially from steel and chemical works in the Donbass region, contributing to the acute problem of low air quality in eight major cities.

There are Soviet-style subways and trolley networks in the major cities. The rail system and the main highway linking Kiev and Lviv are being upgraded. Part of a former submarine port at Sevastopol has been opened to commercial shipping.

Health care, supposedly free to all, has declined significantly in the post-Soviet period. A $2 million UN program provides treatment and preventive care for the 350,000 people who dealt with the Chernobyl disaster. By 2001, 1% of the population was HIV positive.

Using Ukrainian in schools is the main element in the drive to promote the once-banned language. Some schools in the west no longer teach Russian. Most university teaching is in Russian in eastern regions, and in Ukrainian in those in the west.

Street crime, robberies, violence, and carjackings have increased sharply. The death penalty was abolished in 2000. The country is a major source for human trafficking to the West. Corruption is rampant across the economy. Political killings made headlines, as did the murder in 2000 of journalist Gyorgy Gongadze.

The gap between rich and poor has widened significantly. Wage arrears – and massive hidden unemployment – are major problems.

Among potential tourist attractions are warm resort areas in Crimea and the south, and the Carpathian Mountains. The government has maintained a highly regulated system of managing tourism, and bureaucratic hurdles have held up the development of Western-style hotels.

In 1240, Kiev was conquered by the Mongols. The Ukrainian Cossacks later came under the domination of Lithuania, Poland, and Russia.

• 1918 Independent Ukrainian state after collapse of Russian and Austro-Hungarian empires. Brest-Litovsk Treaty signed with Germany.
• 1919 Red Army invades. Ukrainian Soviet Socialist Republic proclaimed.
• 1920 Poland invades; western Ukraine under Polish occupation.
• 1922 USSR founded; Ukrainian SSR is one of founder members.
• 1922–1930 Cultural revival under Lenin's "Ukrainianization" policy to pacify national sentiment.
• 1932–1933 "Ukrainianization" policy reversed. Stalin induces famine to eliminate Ukraine as source of opposition; seven million die.
• 1939 Soviet Union invades Poland and incorporates its ethnic Ukrainian territories into the Ukrainian SSR.
• 1941 Germany invades USSR. 7.5 million Ukrainians die by 1945.
• 1942 Nationalists form Ukrainian Insurgent Army, which wages war against both Germans and Soviets.
• 1954 Crimea ceded to Ukrainian SSR.
• 1972 Widespread arrests of intellectuals and dissidents by Soviet state. Vladimir Shcherbitsky, a Brezhnevite, replaces moderate reformer Petr Shelest as head of Communist Party of Ukraine (CPU).
• 1986 World's worst nuclear disaster at Chernobyl power plant.
• 1989 First major coalminers' strike in Donbass. Pro-Gorbachev Volodymyr Ivashko heads CPU.
• 1990 Ukrainian parliament declares Ukrainian SSR a sovereign state. Leonid Kravchuk replaces Ivashko.
• 1991 Government declares full independence, conditional on approval by referendum, supported by 90% of voters. CPU banned.
• 1993 Major strike in Donbass results in costly settlement, which exacerbates budget deficit and stimulates hyperinflation. CPU reestablished at Donetsk congress.
• 1994 Autonomous republic of Crimea elects Yuri Meshkov as its first president. Leonid Kuchma defeats Kravchuk to become first democratically elected president of Ukraine.
• 1996 Hryvna replaces karbovanets as national currency. New constitution comes into force.
• 1997 Friendship treaty signed with Russia. Accord on Black Sea fleet.
• 1998 Ten-year cooperation agreement with Russia. CPU wins largest number of seats in election.
• 1999 Reelection of Kuchma. Opposition claims of fraud. Kuchma appoints pro-reform government.
• 2000 Chernobyl site closed.
• 2001 Kuchma linked with murder of journalist. May, reformist premier replaced.
• 2002 Opposition parties make large gains in legislative elections.