Table of Contents

Economic Convergence and Divergence in Europe

Economic Convergence and Divergence in Europe

Growth and Regional Development in an Enlarged European Union

Edited by Gertrude Tumpel-Gugerell and Peter Mooslechner

This highly topical book addresses the challenge of economic convergence within Europe, beginning with a thorough review of the theory of growth and related empirical research. Historical and more recent economic developments within the present EU and current accession countries are discussed, along with the design for the process of further integration of accession countries into the EU and the Euro area. Moreover, the potential to achieve a sustainable catch-up process in Western Balkan countries, the Ukraine and Russia is explored, focusing on the task facing the EU in designing proper policies vis-à-vis these countries. The contributors’ varied perspectives ensure that the theories and policies postulated are linked closely with the actual situation in accession countries and offer up-to-date insights.

Chapter 23: The case of Russia and Ukraine

Hermann Clement

Subjects: economics and finance, regional economics, urban and regional studies, regional economics


Hermann Clement 23.1. 23.1.1. PRECONDITIONS FOR CATCHING-UP Economic Basis The Russian and Ukrainian economies are regarded as relatively rich in natural resources. Ukraine, with its relatively favourable conditions for agriculture, also has an abundance of some metal and non-metal deposits. While Ukraine is poor in hydrocarbons – it owns only 0.8 per cent of the world’s explored natural gas reserves and less than 0.1 per cent of the oil reserves1 – Russia possesses huge reserves of oil and gas. About 5 per cent of the world’s known oil reserves and more than one-third of all known reserves of natural gas are on Russian territory. Coal reserves in both countries are significant, but mostly located in bad geological strata or in remote areas. Russia is therefore one of the great energy exporters while Ukraine has to import a large share of its energy consumption. A special calculation of the German Group of Advisors to the Government of Ukraine showed that Ukraine is able to cover economically only about 15 per cent of its energy use from its own resources.2 The high dependence on energy imports is therefore one of the most serious economic problems of Ukraine. The different situation in energy resources results in different economic dependencies for both countries. Ukraine and Russia also claim to have a well-educated and trained labour force that is eager to work. This claim is generally accepted in the West, particularly when it comes to workers in technical professions. But, due to the changed...

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