From Global Economic Crisis to Armed Crisis: Changing Regional Inequalities in Ukraine

Despite the new geopolitical situation caused by the revolution at Maidan in February 2014, little is known about the real economics of Ukraine and its internal spatial disparities. In the survey of regional disparities, data on incomes, employment and unemployment were involved and completed by those on migration and age structure of the population. The spectrum of available data at rayon level is not particularly broad, but this is counterbalanced by the ca. five hundred territorial units that provide a minute picture of the inequalities. According to the classic view, the spatial pattern of economic development is opposite to the Central European west to east slope. In Ukraine, Eastern regions are not more developed as a whole but they accommodate more developed large urban centres. Spatial differences grew most rapidly during the period of economic decline (1990–2000). However, these disparities were mitigated during the two years following the global financial crisis as the latter mainly affected the large urban centres of the economy. Conversely, the Donets Basin as a whole was highly exposed to the effects of these crises owing to its outdated industrial structure (coal mining, iron and steel industry). This led to a rearrangement in the ranking of the east Ukrainian regions based on GDP per capita: Dnipropetrovs’k overtook Donets’k, and the Dnieper Region (including Zaporizhzhia) has a higher output per capita than Donbas. A significant part of the productive capacities and incomes are found in the Donbas, an area hit hard by the fighting; their loss would further deteriorate the state of the country’s economy. The fighting in the Donbas that did by far the greatest harm to the economy among the post-Soviet conflicts. It happened in a period when Ukraine, after the transformation crisis, had been on the path of growth for more than one decade. Concerning population number, area and economic weight, the Donbas exceeds Transnistria or Karabakh by an order of magnitude.