U n I t 2

Text A

On August 24, 1991 the Verkhovna Rada declared the formation of the Independent Ukrainian State and on December 1991, a nation-wide referendum confirmed the formation of a new large European state.

As to its territory Ukraine is the second largest country in Europe. As to its industrial potential, this is one of the most developed republics of the former Soviet Union with highly developed metallurgy, machine-building, chemical production and agriculture.

The economy of the Soviet Union was functioning for decades as an aggregate national economic system linked by united management, co-operated links and applied technologies. This has predetermined the inherited dependence of Ukraine on economic ties with former republics of the former Soviet Union. It will suffice to point out that 2/3 of the country’s gross domestic product did not have a closed productive cycle in Ukraine.

Clearly the emergence of political and economic borders in a formerly united economy, the emergence of the national monetary-credit and financial systems, breaking of the system of traditional economic links have brought the economy of the country to a crisis. Almost all the indices of the economic development have negative dynamics. But the rates of decrease of production are slown down⁷ and first signs of stabilization appear in a number of branches of economy.

One of the main reasons of inflation are prices for power carriers imported from Russia. These prices have increased by hundreds times during the last years. The government of Ukraine sees the way out of the crisis in realization of the programme of economic reforms which would make it possible to reorganize the economy, to change its structure, to carry out privatization and to restore stimuli to a highly effective work.

Comments

1. co-operated links — cпiльнi зв’язки

2. inherited dependence — успадкована залежнiсть

3. gross domestic product — внутрiшнiй валовий продукт

4. closed productive cycle — замкнутий виробничий цикл

5. emergence — поява

6. national monetary-credit and financial systems — нацiональна гро­шово-кредитна та фiнансова системи

7. rates of decrease of production are slown down — темпи зниження виробництва уповiльнюються

8. power carriers — енергоносiї

9. to carry out — проводити

Text B

Two interrelated processes are characteristic of Ukraine’s economy today, namely its assertion as that of an independent state, and its transformation from planned-centralized to market-controlled. These processes are rather complicated, but there are all prerequisites for their effective accomplishment.

Present-day independent Ukraine has a considerable potential to quickly develop its economy — and this is explained not only by the favourable natural conditions, but also by the convenient geographical position in terms of international trade exchanges.

Reforms, started in the national economy after the proclamation of independence, are aimed at the establishment of an open, effective market type economy.

The main directions of the programme of economic reforms are as follows:

1. The programme of structural reorganization.

2. Attainment of balanced payments account.

3. Creation of conditions for gradual integration of Ukraine with the world economy.

These and other problems must be solved at the cost of a wide attraction of foreign investments. In a short period of time the Verkhovna Rada and government of Ukraine have succeeded in creation a legislative and regulating basis for conducting economic reforms. Taxation and budget systems corresponding in their structure to the world practice are created essentially anew. The change over to a free price formation in the economy is carried out. The government regulation of price level is applied only in establishing prices for main energy carriers, some most important food, communal and transportation services.

Much attention is given to the change of the structure of property. Legislative basis is created for privatization of state-owned enterprises, implementation of reforms of the banking and financial systems.