Replies

When I saw the statement about Ukraine being the poorest country in Europe, I decided to Google more information. It certainly seems that using the metric of local currency incomes compared with other countries Ukraine has rated lowest over a number of years. But it is more complicated than that. Certainly rampant corruption has played a serious role. For example it appears Ukranians with som extra money invest in condos. The really rich send their money overseas. See more details in this article from 2019.

https://www.atlanticcouncil.org/blogs/ukrainealert/what-is-wrong-with-the-ukrainian-economy/

It also seems things got worse after 2014. That would make sense with Russia invading the most resource rich eastern areas, and Crimea. However, below is the most interesting paragraph I read. I certainly hope that in the intervening 4 or 5 years, useful measures have been taken to improve the banking situation. There are several other interesting paragraphs about finance and banking before this one.

“The banks’ primary problem is that their biggest clients do not pay. In total, non-performing loans in the Ukrainian banking system are more than 50 percent. The reason is that Ukraine has a few hundred people who consider themselves too superior to pay, and unfortunately the Ukrainian judiciary agrees. In particular, 427 members of parliament enjoy legal immunity and probably two-thirds of them are businessmen. Others have simply very good relations with the relevant parts of the law enforcement apparatus. European elites behaved like that in the 18th century. It was only in the 19th century when the playing field was leveled that Europe started growing.”

I certainly hope that the “legal immunity” enjoyed by the “427 members of parliament” has been substantially fixed by now.

rxh4n1: "Corrupt, maybe.
Stupid, no.
There is something really wrong in Ukraine.
They have vast mineral and agricultural wealth, a large industrial base, an educated population comparable to Canada’s in size.
Yet it is the poorest nation in Europe."

Corruption Perception Index:

Let's start here:
According to Transparency International's Corruption Perception Index, during the 1990's Ukraine was among the most corrupt countries on earth, easily as corrupt as the very Mother of Corruption, Russia itself.
Over the past 30 years, Ukraine has slowly, slowly improved itself, to the point where it is today at roughly the half-way point, equivalent to countries like Bosnia and Herzegovinian, Serbia, Brazil and India.

Russia also improved itself, somewhat, but today remains in the worst 20% of countries' perceived corruption.

Democracy Index:

In The Economist Democracy Index, Ukraine also stands roughly half-way, as a hybrid regime, similar to Mexico, while Russia and China are near the bottom 10% of worst authoritarian regimes.
Like the USA, Ukraine's Democracy Index has fallen slightly in recent years, though for different reasons.
In Ukraine's case their Democracy Index fell after Russia's 2014 invasion and again after Russia's 2022 invasion.

In GDP-PPP per capita, Ukraine also stands about halfway, along with countries like Vietnam and Sri Lanka, while Russia is in the top 30%, equivalent to Greece and Bulgaria.

The key factor to remember about Ukraine's economy is that GDP fell almost 30% after Russia's 2022 invasion and has been recovering at a very slow pace, such that today it is still down by 25%.
GDP per capita looks better because there are fewer Ukrainians today than in 2021.

Russia's total GDP is also down slightly, though still ten times that of Ukraine.

GDP per capita: