The individual regions of the Ukraine differed greatly in their development because natural resources are unevenly distributed and because for centuries the territory of the modern country was in the hands of three different foreign powers. The fertile black-earth region to the west of the Dniepr was long held by the great power of the Poland-Lithuanian Commonwealth, while the lands to the east of the great river, rich in coal, iron and other ores, belonged to the empire of the czars. Galicia, the western-most territory, belonged to the neglected regions of the Habsburg Empire.
When Poland was partitioned at the end of the 18th century, the western, “right-bank” Ukraine also fell into the hands of the czars. During this period, the land-owning Polish nobility erected the first grain mills and factories for processing agricultural products here, particularly sugar beets. The government in Moscow established multiple Black Sea ports for strategic reasons, including the subsequent metropolis Odessa. The first iron rolling mill was erected in Luhansk in the coal-rich Donez Basin in 1795, also for the military. The plant equipment was imported from Britain.
The abolition of serfdom by Czar Alexander II in 1861 gave a much needed impetus to industrialisation by freeing up labour for the factories. Construction of the first railway began in 1866, which made it possible to transport wheat from Balta to Odessa. Even more important was the “Catherine Railroad”, which opened in 1884 and ran from the booming coal mines in the Donez Basin via Yekaterinoslav (later Dnipropetrovsk, today Dnipro) to the iron-ore mines of Kryvyj Rih. In the 1860s and 70s, an enormous industrial landscape took shape in this region, termed “Donbass” for short, as ever more coal mines, iron works and settlements were established. The heart of this region was the city of Donezk, which developed from an ironworks belonging to the Welsh industrialist John Hughes and was thus originally called Yuzovka. The capital for this boom came mainly from abroad, while the workers mostly came from Russia. At this time, the agricultural industry in the western Ukraine was also expanding rapidly, particularly sugar production and grain exports. In scarcely developed Galicia, by contrast, only the exploitation of some smaller petroleum deposits ameliorated the poverty.
Nevertheless, by the turn of the century the Ukraine was still primarily agrarian. However, the one-sided industrial development was already resulting in a fatal dependency: raw materials and semi-finished goods were shipped to Russia for further processing, while finished products had to be imported.
The first Ukrainian nation state, founded in 1917, was violently annexed by the USSR in 1920. Subsequently, the government in Moscow invested massively in the reconstruction and expansion of the industrial plants destroyed during World War I. Among other projects, a steel plant and a tractor factory were comstructed in Charvik, a steel complex and a harvester factory in Zaporižžya and a locomotive factory in Luhansk. In 1932, the world’s largest hydroelectric plant was completed on the Dniepr. By 1937, the Ukraine was numbered among the world’s leading producers of pig iron and coal. The south-eastern portion of the country developed into a modern industrial region and urban population doubled by World War II, but the dramatic regional imbalance remained.
After World War II, the government of the Soviet Union once again prioritised reconstruction of the devastated factories. The pre-war production level was already surpassed by 1950, but the population suffered under drastic shortages of goods. The aviation complex Antonov was founded in Kiev in 1946 to manufacture the aircraft and buses of the same name. The Tupolev 104, the world’s second passenger jet, was built in Charkiv in 1955; today it may be seen in the Kiev Aviation Museum. Soon, the Ukraine was producing around half of all the USSR’s tanks and missiles, making the country a centre of the military-industrial complex.
However, as in the inter-war period, growth was driven by the increasing exploitation of resources and manpower, with no improvements in productivity. Consequently, the economy scarcely grew from mid-century on. Additionally, the central government began investing more heavily in the Asian republics, and the importance of the Ukraine for the state as a whole declined. As it was also forced to import ever greater amounts of the new fuels petroleum and natural gas, the Ukraine’s dependence on Russia only increased.
Ukraine's economy since 1991
Boryslaw. Oil Fields