The successful “Orange” Revolution of 2004, built on popular protests, strengthened Ukraine’s multiparty system and the country’s move towards democratic and economic reforms. The target is European integration, even though EU membership is a long way off.
Relations with Russia are important. The country is dependent on Russian energy and trade. The balance between Europe and Russia is one reason for the party-political conflicts that have partly paralyzed reform work. Another is the party leaders’ own ambitions.
Ukraine’s reform policies have been built on an action plan that has been produced together with the EU. This has also formed the basis for Sweden’s cooperation. The country is negotiating with the EU about an association agreement, which will replace the current partnership and cooperation agreement.
The reform work consists of strengthening democracy, modernizing laws, such as within the environmental area, making administration more efficient and laying the foundations for freer economic cooperation with the EU and the rest of the world.
Power struggle delaying reform work
The power struggle between the president, prime ministers and opposition has made the reform work more difficult. State administration is centrally controlled, ineffective and corrupt, and the legal system functions unsatisfactorily.
Additional economic reforms are required for a more investment-friendly climate. But the country is opening up for freer trade and in 2008 it became a member of the World Trade Organization (WTO).
Following several difficult years, economic growth and living conditions in Ukraine have improved during this decade. Rising salaries and social subsidies have reduced poverty. However, that positive trend was broken by the global financial crisis in 2008, which hit the country very hard.
Development assistance an important stimulant
The US is the largest single donor to Ukraine.The World Bank is also supporting the country’s investments and reform work. The EU is responsible for the largest cooperational programme, with EUR 464 million between 2007 and 2010. Sweden is one of the largest European donors. International development assistance equates to just 1 per cent of Ukraine’s GDP, but is nevertheless important in implementing the reforms necessary for the country moving towards the EU.
Sweden’s focus areas in Ukraine:
- Democratic governance and human rights
- Natural resources and the environment.
Read more about Sida’s work in Ukraine.
