San José State University
Department of Economics
Thayer Watkins
Silicon Valley
& Tornado Alley

The Economy and the
Economic History of the Ukraine


The History of the Ukraine

The Ukraine was once the premier kingdom of the Slavic People, but over the centuries lost status to the kingdom of Russia to the north and was relegated to being merely the breadbasket of the realm. The language and culture of the Ukrainians are closely related to those of the Russians but different. Despite the centuries of suppression the Ukrainians wanted political and cultural autonomy. Against all odds they got that chance in the early 1990's with the collapse of the Soviet Union. But the Ukraine was fearfully unprepared for their independence. The Ukrainian State had very little in the way of fiscal resources and yet major needs for state expenditures. It coped with those needs by simply creating money. This led to hyperinflation which made the whole economy fragile and vulnerable to unexpected developments. To the outside world the Ukraine, politically and economically, appeared to be a house of cards which could collapse at any instant. And it did not help that there were Russians who sought such a collapse in order to bring the Ukraine back into the Russian fold. Nevertheless the Ukrainians in 2005 appear after weathering a major political crisis to be surviving and developing some stability.

Ancient History

The Slavs, a branch of the Indo-Europeans, appear to have arisen as a separatate linguistic-cultural group in the refuge of the Pripet Marshes. These marshes which are located in the basins of the Pripyat and Dnieper Rivers in the southern part of Belarus and the northern edge of the Ukraine. They are sandy, water-logged forests; a place where marauding nomads would have a difficult time finding the settlements. They thus sheltered and isolated the inhabitants allowing them to develop independent of the other Indo-European peoples. This habitat also discouraged the development of political unity among the Slavs.

When the Slavs began migrating out of the Pripet Marshes it was as small groups searching for settlement areas and not as invaders searching for populations to conquer. The Slavs, in contrast to the Huns and the Magyars, diffused over eastern Europe. Because their society was primarily based upon hunting and fishing and only secondarily on agriculture, the Slavs had to move frequently. Eventually they impinged upon territories controlled by other cultures and their presence was recorded. The Slavs themselves at that stage did not have writing.

The timing of the Slavic migrations is uncertain but roughly it extended from 1000 BCE to about 1000 A.D.

The history of the Slavs was strongly affected by the rise of the Magyars who around 900 A.D. migrated west from the region of the southern Ural Mountains and captured the the area which is now Hungary. This invasion drove a wedge between the northern Slavs and the southern Slavs.

(To be continued.)

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