Ukraine's Economy in 1998

Real gross domestic product in 1998 comparing with the previous year reduced for 1.7%, though the recession was considerably less than in 1997. Despite the fact that positive tendency of GDP growth, which could be seen in the first part of 1998, was interrupted due to influence of the world financial crisis, it was the best index since Ukraine had become independent.

During 1998 all the subjects of industrial activity of Ukraine manufactured products in the operating wholesale prices for 82.9 billion UAH (Ukrainian hryvnas).

Industrial growth, which could be seen during the period of January - August, failed to be long lasting. Average annual products decrease was 1.5%.

Production of iron industry reduced for 6.8%, engineering and metal processing industry - for 4.5%, fuel industry - for 0.7% and energy industry - for 0.3%. Their share in general volume of industry production makes two-thirds.

At the same time there was improvement in the work of wood processing, wood pulp and paper industries. In 1998 there was a growth of the bulk of production for 10.4%, production of building materials - for 4.1%, light, chemical and petrochemical industries correspondingly - for 1.5% and 0.9%. It should be mentioned that in 1997 production of these branches reduced.

Enterprises of metallurgy of ferrous metals steadily work and increase their production. The growth in 1998 was 12.4% and that index exceeded the results of the previous year.

Enterprises of food industry reduced their time lag from 14.6% in 1997 to 0.5% in 1998.

In 1998 industrial entities of Ukraine sold their production for the sum of 75.4 billion UAH, and 32 billion UAH among them are received on the barter terms. The share of barter in the volume of the sold products in 1998, as well as in previous year composed more than 42%.

The share of products, which were sold on the barter terms, remains high. Namely: in building materials industry - 65.8%, fuel industry -57.8%, wood processing, wood pulp and paper industries - 48.6%, energy industry - 47.9%, chemical and petrochemical industries - 46.2%, engineering and metal processing industries -42.9%.

On the barter terms it was sold 89.3% of the production of enterprises of tire industry, 82.5% - cement industry, more than three-quarter -production of sugar, fish and china industries, more than 70% - production of oil refinery industry, mining industry, tractor and agricultural engineering, silk industry, structural elements of wood and slabs on wood base.

In comparison with 1997 the biggest increase of the barter share was in fuel industry (7.7) and building materials industry (6.3).

The lowest level of sold products on the barter terms was in ferrous metals industry - 20.2%. Against previous year the share of barter reduced almost twice.

In 1998 in comparison with 1997 fuel industry enterprises reduced the production of gas and oil, including gas condense, correspondingly for 1.2% and 5.7%. The bulk of coal increased for 1.6%, including coke coal - for 5.4%.

During the last business year oil refinery enterprises refined 13.4 million tons of crude oil, which is 4% more than in the last year. At the same time production of petrol and diesel oil increased correspondingly for 9.1% and 5%, oil slurry - decreased for 5.4%.

Energy production against 1997 was reduced for 2.9% due to reduction of its production on steam power plants and A-plants.

By the beginning of 1999 the main consumers of fuel had in their reserves 2.2 million tons of coal and 543.1 thousands tons of oil-fuel. In comparison with the beginning of 1998 coal reserves reduced for 1% and oil-fuel - for 21%, in comparison with the beginning of heating season (October, 1) they reduced for 8% and for 30% correspondingly.

Coal storage on enterprises and organizations of MINENERGO composed 353.9 thousands tons, oil-fuel - 72.7 thousands tons, and in comparison with the beginning of 1998 supplies of coal increased for 0.4%, when oil-fuel supplies reduced for 15.6%.

In iron and steel industry the reduction of the bulks of production during the year continued to deepen and in the aggregate in 1998 it composed 6.8% (in 1997 its increase was 7.7%). It happened first of all because of the reduction of iron ore and manganite mining (4.3% and 27.1% correspondingly) as well as the reduction of end metal products - rolled stock and steel tubes (9 and 17.6% correspondingly).

At the same time there was an increase in the production of steel plate rustles elements, plates and black sheets, profile iron, profile steel, high-capacity drive pipes.

Metallurgical coal reserves on the enterprises of In iron and steel industry on the 1^st January 1999 composed 461.6 thousands tons, what was enough for proper work of the branch for 7.8 of calendar day, while in January 1998 it was only 3.4 of calendar day. In comparison with the beginning of 1998 the reserves of metallurgical coal increased in 2.6 timer.

1998 year didn't become a critical moment for engineering complex. 1997 time-lag wasn't overcome, there was a reduction of production in two-thirds of major kinds of products of the branch. The general volume of production decreased for 4.5%.

There was a considerable reduction (56 -77%) in the production of water turbines, boilers, electrical motors and casting machines, for 25 -45% - in the production of power switches and rectifiers, electric lamps, for 17 and 22% correspondingly diesel locomotives and oil tank cars.

It wasn't reached the level of the previous year in production of blast, steel furnace, mining, pump, compressor, rolled and preparation plant equipment.

Enterprises-manufacturers of agricultural technique reduced their production of zigzag harrows, chemical applicators, tractor sprayers and combine harvesters in 2.5 times.

At the same time, automobile makers considerably increased car production, namely: motor cars - in 13 times, trucks and trolley buses - almost by half, buses - for 29%. Considerable growth was in the production of band conveyors and road graders, heat counters and water counters. There was increase in the production of power transformers, telephones, electric welding equipment and lead (copper) accumulators and cells, elevators, cultivators and tractor disk harrows.

In chemical and petrochemical industries the bulk of production against the last year increased for 0.9%. The production of soda ash, calcium carbide, bromine, polystyrene, thermoplastic, tires for trucks and cars increased. At the same time in comparison with the last year the production of synthetic dye, acetic acid, chemical components of flora protection reduced for 29 -45%, mineral fertilizers, hydrochloric acids, caustic soda, rubber footwear - for 18 - 25%, ammonia, chemical fibers and threads, cinematographic and photographic films - for 4 - 9%.

In wood processing wood-pulp and paper industries in 1998 general volumes of production as against the last year increased for 10.4%. Production of glue veneer and paper increased for 19 - 21%, board and cellulose pulp - for 6 -12%. At the same time time-lag from the level of 1997 in production of window and door units, parquet was for 17% each, lumbers, wood-fibred and wood-chipped panels - for 3 - 7%.

In comparison with 1998 the bulks of building materials industry production increased for 4.1%. The increase was in the production of more than half products of the branch. Namely:

• sanitary stoneware, tubes and slate ferrules for 18 - 23%,
• slates, stoneware, concrete, facing stoneware panels - for 9 - 11%,
• brunspiles, slurry - for 1 - 4%.

At the same time the production of tiles and bathtubs reduced twice; decrease in the production of linoleum, structural glass and roofing equipment was 11 - 18%.

The production of consumer goods in 1998 composed 14.6 million UAH (in the operating whole-sale prices), which is 19.4% in the general volume of industry production.

The letdown of rate of growth in the end of the year in the production of consumer goods prevented from getting average increase in 1998 and their bulks remained at the level of 1997. Such situation happened because of letdown in the production of food product. At the same time the increase in the production of nonfood items and spirits in 1998 composed 11 and 3.4% correspondingly.

Enterprises of food industry in 1998 as against 1997 reduced their volumes of production of many significant products of the branch. Namely: in the production of meat, absolute alcohol, meat half-stocks - for 32 - 39%, spirits and sausages, wines - for 21 - 28%, cannings, beverages, salt production, champagne, bread , wheat, cognac - for 10 -18%. There was an increase in comparison with 1997 in the production of tea, natural coffee, mineral waters, fat cheeses, margarine products, pastry and beer - for 11 - 23%, in the production of milk, sunflower oils, cereals - for 5 - 9%.

The bulks of production in light industry increased in comparison with 1997 for 1.5%. There was an increase in the production of fabrics and textile goods, in the production of commodities for children - suits, coats and dresses.

At the same time the time-lag wasn't overcome in the production of knitted and haberdashery goods, textile haberdashery, hosiery and footwear. There is still a considerable recession in the production of clothes for children: under-linen for babies, knitted goods, hosiery, footwear.

In 1998 there were no positive changes in the production of primary goods for light industry. Namely, the production of threads composed only 18% from the level of the previous year, the production of linen yarn, pure cotton and leather goods reduced for more than half, flax-fibres and silks - for 30 - 40%.

The production of cultural-domestic and household goods in 1998 composed 4.2 billion UAH (in the operating whole-sale prices), which is bigger than in 1997 for 12.9%. There was an increase in the production of color TV sets IN three times, irons and wall papers - more than a half, kettles - for 14%, refrigerators and school copybooks - for 2 - 8%. The production of shampoo increased in six times, toothpaste - for 86%, cigarettes - for 9%. At the same time there was a reduction in the production of sewing machines, motorcycles, cameras - for 77 - 83%, bicycles and radiosets - for 56 - 64%, electric mixers and tape recorders - for 41 - 48%, deepfreezes, electric juicers, coffee-mills - for 20 - 28%, houseware - for17%. Among every-day-use commodities the production of chemical industry in 1998 reduced for 12%, the production of household and toilet soap reduced for 33%, shaving foams - for 31%. In 1998 the share of industrial enterprises, which introduced know-how and innovation in the process of their production composed 15.1%.

The most favorable for innovations are the enterprises of oil-refining, pharmaceutical chemistry, glass and china industries.

The production of new products using innovations took place on 13.7% of industrial enterprises, the majority of which specialized on the household goods. There was an intensification of such activity on the enterprises of printing, light, food and wood processing industries.

Mechanization and automatization of production process was introduced only on 2% of industrial enterprises. They introduced 174 assembly lines, 102 workshops were mechanized and automatized.

At the same time financial limitations of the development of innovation activity of industrial enterprises led to the time-lag in the introduction of new technologies. Only 4.4% of industrial enterprises used progressive technological process, including 1.7% - aimed at the economy of materials and energy resources.

Almost 85% of enterprises were not involved in the process of development of their technological level of production (in 1997 - 83%). The biggest part of such enterprises was in printing, instrumental, wood processing industries, road building and public engineering, in the production of the trade equipment.

There were no positive tendencies in the work of introduction of innovations on the enterprises, which changed the form of property. In comparison with 1997 the number of privatized non-state enterprises, which introduced progressive new technological process, reduced for 14.2%, low-waste, resource saving and non-waste enterprises - for 17.3%, which introduced new technologies - for 7.6%.

In the end of 1998 80% of industrial enterprises were in non-state sector, during business year they produced 68% of the general volume of industrial production.

The most prevalent forms of property were joint stock companies. Their share in general number of enterprises was 64%, and in general volume of the production of this sector - 87%.

In the sphere of agriculture in 1998 the bulk of gross output in all categories reduced in comparison with 1997 for 8%, including public sector - for 14%, private sector - for 4%. The reduction of gross output happened due to the reduction of the bulk of production in the sphere of plant growing - for 15%. At the same time the cattle production increased in comparison with 1997 for 2%.

In 1998 88% of agricultural enterprises bore losses, the rate of losses in the whole branch composed 23%. Only the production of cereals and sunflower was profitable.

Grain production in the farms of all kinds of ownership in 1998 composed 26.5 million tons, which is 9 million tons less than in the previous year. It is connected with the reduction of sown area for 1.3 million hectares (for 9%), the reduction of crop yields for 3.7 centners (for 15%). From every hectare it was gathered only 20.8 centners (it is in 2.7 times less than in the most crop yielded 1990). The reduction of maize harvests (2.3 million tons - twice less than in 1997) had a negative influence on the level of production of grains.

From 1998 in all the categories of farms were received2.3 million tons of sunflower grains, which is almost the same as in the last year. The production of vegetable products increased for 6% and composed 5.5 million tons. At the same time the production of sugar beets reduced for 13% and composed 15.3 million tons, potato -15.3 million tons (8% less than in 1997).

In general production of plant growing there was an increase of the role of private collective farms. In 1998 their share in gross output of potato composed 97%, vegetables - 84%, grains -10%, including maize - 45%, sunflower grains -5%.

Agricultural processing enterprises received in 1998 15.2 million tons sugar beets, which is 13% less than in 1997. Because of the lack of monetary funds processing enterprises received the major part (95%) sugar beets on the give and take basis.

Purveying organizations and processing enterprises in 1998 received from all categories of farms 118.6 thousands tons of vegetables (107% of the level of 1997), 48.7 thousands tons of potato (80%), 55.1 thousands tons of fruit (17%).

Agricultural enterprises changed on the terms of barter 54% of the total volume of realization of sunflower, 46% of sugar, one third part of grains, 26% of potato, 23% of vegetable oil.

For 1998 harvest winter crops for grain and green feed were sowed in agricultural enterprises on the area of 7.5 million hectares (85% of planned rate). It is almost the same level as in 1997. Ploughing was made on the area of 7.6 million hectares (62% of expected) as against 8.6 million hectares (67%) in 1997.

The situation in the animal husbandry in all categories of farms was characterized by increase of quantity of pork and poultry for 5%, which composed 9.9 and 128.8 million heads correspondingly. There was also a tendency of slowing the process of the reduction of the quantity of cattle, sheep and goats: as of January, 1 1999 there were 11.7 million heads of cattle (which is 8% less than on January, 1 1998), among them there were 5.9 million cows (6% less); sheep and goats - 2 million heads (14% less).

Farms of all categories in 1998 produced .2.6 million tons of meat (in the live weight), which is for 11% less than in 1997, 13.7 million tons of milk (at the level of the previous year), 8.3 milliard tons of eggs (0.3% more), 4.5 thousands tons of wool (one third less). On private farms there was an increase in the production of milk and eggs (for 2 and 1% correspondingly) but there was a reduction in production of meat and wool. They produced 69% of general production of meat, 63% of eggs, 49% of wool.

There was an improvement in the productivity of animals and poultry in all agricultural enterprises. There was an increase in average daily growth of raising, fattening of cattle (for one fourth) and porket (for 23%), which composed 267 and 130 grams correspondingly. Average milk yield from one cow increased for 260 kg and composed 1647 kg. Laying hens produced in average 12 eggs more and composed 199 eggs.

Purveying organizations and processing enterprises of all forms of ownership in 1998 sold 0.4 million tons of live weight of animals and poultry, which is 31% less then in 1997, 2.9 million tons of milk and dairy produces (12% more), 850 million eggs ((16% less). The bulk of realization of agricultural production by the enterprises of public sector in existing purveying network reduced. There was growth of the number of goods, sold at free channels, which composed three thirds of the sold volumes of animals and poultry, more than two thirds of eggs, about one third of the sold milk.

The prices on the production of agricultural sector in 1998 rose in comparison with 1997 for 26%, including production of animal husbandry -for 29%.

On January, 1 1999 there were 35.5 thousands of agricultural enterprises (ranches) in Ukraine. It is 0.4 thousands less than in the beginning of 1998. At the ownership of those enterprises there were 1029 thousands hectares, among them -954 thousand hectares of ploughland (on an average there were 29 and 27 hectares correspondingly for each enterprise). In 1998 farms sold to the purveying organizations 878 tons of live weight of animals and poultry (112% of the previous year level) and 4.4 thousand tons of milk and dairy produces (in 4.4 times more).

In 1998 there was some vitalization of investment and construction activity. Enterprises and construction organizations of all kinds of ownership introduced new funds at original value of 10,898.4 million UAH, the bulks of investment to fixed assets for the account of all funding sources composed 11,543.1 million UAH. In comparison with 1997 investment into construction increased for 4.8%.

The major part of fixed assets (54.4%) is aimed at construction and erection works, at the purchase of machines, equipment, techniques and their setting (with this purpose 36.1% of all assets were used).

The main sources of investment into construction were still enterprises' and organizations' assets (71.4% of the general bulk). On the account of State budget 972.2 million UAH of centralized capital investment (or 8.4% of the general bulk) were received. Local budgets' funds composed 4.3% of all received funds in Ukraine, foreign investors share was 2.5%.

The biggest part of capital investment was aimed at the development of construction potential (68% of all volumes).

Almost one half of all investment into construction (43.8%) was received by state-owned enterprises and organizations, 42.8% - by private or joint-stock companies.

In 1998 at the account of all funding sources such objects were operationalized:

• power stations with the capacity of 13 thousands kV in the Republic of Crimea, two coke-oven batteries with capacity of 600 thousands tons of coke, powers for production of 110 thousands tons of coal in Lugansk region, 1 ton of amber in Rivnenski region, plant for processing of 7.5 tons of amber in Rivne;

• electric transmission lines length of 1.7 thousand km., transformation reducing substations capacity of 1.2 million kV A, 196 km of oil pipe-line, 65 km of oil products pipe-line, 43 oil and 58 gas wells, 249 gas pipe-lines, 234.1 km of paved freeway, 130 running meters of the sea ports' piers, 328.2 and 29.6 thousands of numbers on municipal and rural automatic telephone stations correspondingly, 5.6 thousands of numbers of cable television, 59 km of railway were electrified;

• powers for production of: paint, varnish and lacquer, electrodes, high-tension switchers, pavement tiles, custom concrete, porous concrete, clay, pediatric footwear, end medicine products, pastes, pastry, mayonnaise, ketchup, beer, alcohol beverages, wine, mineral water, alcohol free beverages, sausages, butter and vegetable oil, dairy produces, dry infant food, ice-cream, cigarettes etc.

For the period of 1998 in Ukraine there were built 67 thousands of flats in living houses of total area equal to 5.6 million m², which is 9% less than those in 1997. In Kyiv there were built 8 thousands of flats of total area equal to 608.7 thousands m² (for 21% more), which composed 10.9% of total Ukrainian flat building. The number of new flats in comparison with 1997 increased in five regions (Volynska, Dnipropetrovska, Ivano-Frankivska, Odeska, Cherkaska).

The biggest part (56.5%) of general area of living houses was built by private building enterprises, 23.2% - by joint enterprises and 20% - by state enterprises. In private sector the share of individual houses composed 99.6%.

In 1998 there were brought into operation secondary educational institutions for 24.1 thousands of pupil places in, pre-school institutions for 680 places, hospitals for 830 beds, ambulatory policlinics - for 4 thousands of visits per shift, clubs - for 580 places, gas and water networks of total length equal to 3.2 thousands km and 402.4 km correspondingly. In 1998 there was an increase in comparison with 1997 in bringing into operation secondary educational institutions and ambulatory policlinics.

State owned enterprises and organizations put into operation all hospitals, 82% of ambulatory policlinics, 61% of secondary educational institutions. During construction of the objects connected with the liquidation of the consequences of the accident at Chernobyl Nuclear Power Station, according to the information of constructors in 1998 117.7 million UAH of the state centralized capital investment were used (61% of the expected year volume), including at the objects of non-production use - 89.8 million UAH (63%). There were brought into operation living houses of total area equal to 29.5 thousands m² (61% of the year volume), secondary -for 3.6 thousands of pupil places (63%) and preschool - for 145 places (39%), hospitals - for 150 beds (16%), ambulatory policlinics - for 300 visits per shift (68%), gas and water networks of total length equal to 259.3 (75%) and 30.9 (46%) km correspondingly etc.

For construction of the objects of agricultural complex was used 1,849.8 million UAH of capital payments, which is 6% less than in 1997.

The volumes of contract works, executed by contract labor of assembling-construction enterprises in 1998 composed 5.3 billion UAH and exceeded the level of the previous year for 2.7% (in 1997 the reduction composed 11,9%). Contractors of collective form of ownership made 78.5% of general volume of works, contractors of state property - 21.1%, private - 0.3%, property of other countries, international organizations and individuals from other countries - 0.1%.

Construction enterprises of non-state form of property composed 88.9% of general quantity, they made 78.9% of contractor works.

Transportation

Transport complex of Ukraine during 1998 delivered for consumers 695.5 million tons of cargo, in comparison with the last year the reduction composed 5.1%. Cargo turn-over composed 375.2 billion t/km, which is 2% less. One of the main reasons of the reduction of cargo turnover was the reduction of industry and agricultural production.

In 1998 railway transport delivered 286.3 million tons of cargo, which is 2.5% less, than in the previous year.

Automobile transport delivered to consumers 153.8 million tons of cargo in comparison with 191.2 million tons in 1997.

Pipe-lines increased transportation of cargo for 3.7% due to increase of volumes of gas pumping (for 4.8%) and oil pumping (for 1.9%), general volumes composed 237.7 million ton. Cargo transit increased totally for 3.9%, including gas and oil - for 6% and 1% correspondingly, ammonia - decreased for 12.9%.

River transport delivered cargo on international ways for 3.8%, in local - for 7.4%, totally it delivered to the customers 9 million tons of cargo.

Sea and river ports (trade and fish) as well as industrial quays processed 82.8 million tons of cargo, which is 11.8% more than in 1997. Export cargo turn-over increased for 23.3%, transit - for 6.9%, local traffic - for 2.4%, processing of imported cargo reduced for 23.9%. The number of

worked up vessels increased for 13.6%, port services were supplied to 9.7 thousands of vessels of foreign owners and freighters.

In 1998 civil transportation transferred 2.9 billion passengers and executed work for 78.2 billion passenger-kilometers, which is correspondingly 3.4 and 7.2% less than in the previous year. The reduction of passenger transfers suffered all kinds of transport, the reduction of passenger work - railway, automobile and air. The enterprises of communication of general use offered services for the amount of 4.1 billion UAH, including for population - 1,7 billion UAH, which is correspondingly 2.7% more and 21.9% less than in 1997. Among services for population the biggest share belongs to city (32.7%), long-distance (23,9%) and international communication (17.4%). Provision of telephones for population in flats continued: during 1998 250,5 thousands of home telephones in municipal and 48,5 thousands in rural network were mounted, which is correspondingly 8.8% more and 4.6% less than those in the previous year.

Incomes of the consolidated budget composed 28.4 billion UAH (27.4% of gross domestic product). The biggest share belonged to value-added tax - 25.4% (3.6 billion UAH), profits tax for enterprises and organizations - 19.8% (5.6 billion UAH) and profits tax for citizens 12.5% (3.6 billion UAH). Incomes from excise duty composed 1.2 billion UAH (4.4% of general volume of incomes).

Duty to the Fund for execution of measures concerning liquidation of consequences of Chernobyl accident in profitable share of the budget was equal to 5% or 1,4 billion UAH.

Expenditures of the consolidated budget composed 30,5 billion UAH (29.14% of GDP). In the structure of expenditures of the consolidated budget of considerable specific weight were expenditures for social and cultural spheres - 42% (12,8 billion UAH). Expenditures for support of branches and separate objects of economy composed 6.9 billion UAH, or 22.5% of the total expenditures' volume.

Expenditures of the Fund for execution of measures concerning liquidation of consequences of Chernobyl accident composed 4.7% of general volume of expenditures and exceeded its income for 3.8 million UAH.

Expenditures on the settlement of the State debt composed 2.4 billion UAH (2.3% of GDP), or 7.9% of all expenditures, including expenditures on the settlement of the foreign State debt composed 0.8 billion UAH (0.7% of GDP) or 2,5% correspondingly.

The deficit of the consolidated budget in 1998 composed 2.1 billion UAH (2% of GDP).

To cover the budget deficit in 1998 were attracted 4,9 billion UAH of domestic funding and 1,5 billion UAH of foreign borrowings.

Incomes of the State budget in the amount of 15,9 billion UAH, or 15.3% of GDP (taking into consideration mutual relations between local budgets) were formed for 63.4% for the accounting of tax incomes, among which value-added tax composed 71.8% (7.2 billion UAH).

In the expenditures of the State budget, which composed 17.9 billion UAH or 17.2 % of GDP the biggest part belonged to the expenditures for financing of social and cultural spheres - 18.4 % (3.3 billion UAH), and also expenditures for support of branches and separate objects of economy - 17.6% (3.2 billion UAH), covering of the State debt - 13.5% (2.4 billion UAH).

The State budget deficit of Ukraine was run to 2 billion UAH (1.9% of GDP).

Enterprises and organizations, according to the preliminary calculations, during 1998 received 11.8 billion UAH of the balanced income, which in comparison with 1997 composed about 70%. The major part of income, as in the previous years, belonged to industrial and transport enterprises.

Considerable number of unprofitable organizations and enterprises proves a difficult financial situation in all branches of economy. During 1998 more than 50% of enterprises were unprofitable. Their losses amount composed almost 12 billion UAH. The major part of such enterprises was in agricultural sector, industry and transport.

One of the most important factors, which negatively influenced the financial state of enterprises, was the problem of non-payments. In comparison with the beginning of the year debts increased in 1.4 times. The total amount of debit and credit debts on December 1, 1998 composed 106.7 billion UAH and 148.2 billion UAH correspondingly.

In the structure of credit debts, the debts among Ukraine's enterprises composed 90.6% (or 134.3 billion UAH); among the legal entities of Ukraine and countries of former Soviet Union -3% (4.4 billion UAH ); with the legal entities of other countries - 6.4% (9,5 billion UAH). In the structure of debit indebtedness - 95.3%, 1.1%, 3.6% correspondingly.

The biggest share of credit debts belonged to industry - 46.2% (68.5 billion UAH) from total volume, transport and communication - 11.4% (16.9 billion UAH), agricultural industry - 8.5% (12.5 billion UAH), trade and catering- 13.5% (20 billion UAH), construction - 3.9% (5.7 billion UAH). More than a half of non-payments belonged to such branches of industry as electric energy (23.5% from the total amount of credit nonpayments), fuel industry (14.9%), iron and steel industry (20.6%), engineering and metal processing (13.3%).

The negative characteristic of indebtedness among enterprises of Ukraine was the dominating specific weight of the overdue indebtedness in the total amount of 71,3% (72.4 billion UAH) of debit and 72.8% (97.8 billion UAH) of credit. Mainly it arose in the process of payments for goods (works, services) - 81,6% of the overdue debit indebtedness and 63,9% of the overdue credit indebtedness.

In 1998 consumer prices growth composed 20% and was almost twice higher than in 1997

(10.1%). In comparison with the previous year there was quicker growth of prices for nonfood items, than for food products and services (correspondingly for 24.1, 22.1 and 13%).

Most considerably on the markets increased prices for fruit - in 2,1 times. The prices for tea, tobacco products, butter increased for 87.4 -68.2%; for coffee, alcohol beverages, vegetable oil, vegetables - for 53.4 - 40.4%, for fish and sea products, canned fish, eggs, grains and peas - for 29 - 22.1%. During the year prices for bread remained practically unchanged. At the same time there was a considerable reduction of the prices for potato - 22.3%, for flour - 4.3%.

Among nonfood items' prices the biggest growth was for synthetic abstergents and petroleum (correspondingly for 71.3 and 68.9%). The prices for television and radio appliances, perfumes, toilet soaps, auto and motor goods, medicines and chemical products - for 44.8 -34.3%; for computing techniques, furniture, electrical and photographic goods - for 30.5 -26.6%.

In the sphere of paid services greatly (for 85%) increased the value of communication services. Tourist excursions and services of the institutions of physical culture and sport increased in value for 34.9 - 24.3%. There was also a reduction of prices for studying on the courses and in the educational institutions, law services, personal and cultural services. Among personal services the biggest increase was for repair and building services, cleaner's and photographic services (39.9 - 19.5%).

The growth of the prices of manufacturers of industrial production in 1998 composed 35.3% and considerably exceeded the correspondingly index of 1997 (5%).

Among the branches of the industry the biggest increase was in energetic industry, ferrous and steel and iron industries (correspondingly for 66.4%, 55.2 and 50.7%). There was a considerable growth of prices in fuel, chemical and petrochemical (except for chemical-pharmaceutical) industries (for 35.3 and 30%). The prices in light, building materials, engineering, wood processing, wood-pulp and paper, food industries increased for 26.5 - 14.8%. At the same time the reduction of prices in flour-and-cereals industry composed 6.3%.

Money nominal private incomes in 1998 in comparison with 1997 increased for 10.5% and composed 53,322 million UAH. But real money incomes (without compulsory payments, optional contribution and the influence of inflation) reduced for 4.7%.

Monthly average per capita income composed 91.7 million UAH.

Cash expenditures and savings of the population in 1998 composed 54,362 million UAH, which is 13.4% more than in 1997.

In comparison with 1997 food expenditures (on the accounts on material of family budget examination) increased up to 40% (in 1997 - 38.6%), for non-food products - reduced correspondingly from 25.8% up to 24%. The share of payments for services remained the same and composed 19.2%.

Nominal wage, which was calculated in average for one worker in 1998, composed in average 167 UAH (without remuneration of labor of collective agricultural enterprises), which is 7% more than in 1997.

Specifics of the kinds of activity (industrial and social) stipulate considerable inter-branch differentiation in the levels of workers' wage. The highest levels of salary during the year were in the branches of industry, namely fuel and electric-power industries. In those branches salary was in 2-3 times higher than in social sphere (culture, social welfare, health protection, education). The workers of collective agricultural enterprises received (cash and natural assets) in average 85 UAH per month.

Every worker on an average during the year worked 1,521 hour (in industry - 1,360 hours), which is correspondingly 2.8 and 2.4% more than in 1997. Though there was no increase in the level of working time efficiency. The rate of use the nominal hours composed 74.2%, in comparison with 74.8% of 1997. During 1998 on administration's initiative almost 2.8 million of workers (20% of general quantity) were on stimulated vacations, 2.1 million worked in the regime of short-time.

In the previous year there was still an increase of volumes of debts on wages payments. On January, 10 total debt composed 6.5 billion UAH, almost one-fifth of it belonged to debts of 1997 and previous years.

The major part (57%) of debts was on enterprises and organizations of non-state form of property, namely collective agricultural enterprises - 25.3%, joint stock companies - 22.3%. At the same time, almost two-thirds of the debt belonged to industry (37%) and agriculture (27.3%).

On January, 10 10.8 million of workers didn't receive salary in time, which composed 71% of workers of all branches of economy, in industry correspondingly - 3.2 million or 75%, in agriculture - 3 million or almost all workers of the branch. Each worker that didn't receive his salary in time, wasn't paid on an average 604 UAH.

Total debt on pension payments (subsidies) during December reduced for 207.1 million UAH (9.3%) and as of January, 1 1999 composed 2,013.3 million UAH. In December it was paid 690.4 million UAH (31.1% of necessary) to cover the debts.

Total debt on public welfare payments according to Ministry of Labor and Social Policy, reduced for the last month for 3.4 million UAH (10.9%) and including payments for December to cover debts in the sum of 8.4 million UAH (27.2% of necessary), on January, 1 composed 27.6 million UAH.

According to the data of ministries and other central administrations in educational institutions the accrue scholarship debts during the year increased for 3.7 million UAH (3.9%) and on January, 1 1999 they composed 98.9 million UAH. In December It was paid 5.8 million UAH (6.1% of necessary) to cover the indebtedness.

In 1998 for the services of the offices that presented grants and subsidies for reimbursement of expenditures on payment for the housing-communal services and electric energy addressed 5457.9 thousands of families (95.1%), including in cities - 4480.4 thousands of families, in countryside - 977.5 thousands of families. The average amount of the offered grants for the year composed 213.9 million UAH, including in the cities - 165.4 million UAH, in the countryside -48.5 million UAH. The average amount of the offered grants for one family in December composed 51 UAH.

Besides, in 1998 740.5 thousands of families addressed for the grants for reimbursement of expenditures for purchase of the liquefied gas and solid fuel. The grants were presented to 705,3 thousands of families (95.3%) in the sum of 87.1 million UAH, including in the cities -210.6 thousands of families (95.2%) in the sum of 27.5 million UAH, and in the countryside -494.7 thousands of families (95.3%) in the sum of 59.6 million UAH. The average amount of the grants of this kind for one family in December composed 127 UAH.

Among city families, which received grants for reimbursement of expenditures on payment for the housing-communal services and electric energy in December, 57% were the families, living in private houses and privatized flats, 36% of families lived in the state and urban flats, 7% - in the houses of building societies. In the countryside 95% of families, which received grants, lived in the private sector.

According to the number of family members, those families that received grants could be divided in a such way: 33% of them were singles, 28% - families of two members, 33% - families of 3-4 members and 6% - families of 5 members and more.

The total volume of the sales of consumer goods for population on all realization channels in 1998 in comparison with 1997 in comparative prices reduced for 4.5% and composed 29.2 billion UAH. Specific weight of the volume of retail turnover in it composed 65.4%, turnover of the organized markets for goods sale - 28.8%, turnover of informal markets - 5.8%.

The bulk of retail turnover (including catering) of the officially registered enterprises of all property forms and management (trade, industrial, agricultural and other non-trade enterprises and organizations) composed 19.1 billion UAH and in comparison with 1997 it reduced for 5.4%.

The share of the state sector in the bulk of retail turnover composed 11%, collective turnover - 78%, private turnover - 10%.

The realization of food products through the network of retail trade and catering continued to reduce. Considerably reduced the sale of fruit, berries, potato, vegetables, tea, and canned vegetables - for 77 - 38%. The realization of salt, sausages and smoked meat products, bread, canned fruit and vegetables, meat and poultry, canned meat also reduced for 28 - 17%, fish and seafood, butter, wine vodka and alcohol beverages, canned fish, herring and cheese - for 13 - 4%.

There was an increase in realization of tobacco goods for 40%, pasta, alcohol free beverages, eggs - for 20 - 11%, barley, champagne, vegetable oil, sugar, beer, pastry, margarine products - for 6 - 3%.

Among the non-food goods in comparison with the previous year there was a reduction of sales of furs, gum and polymer footwear, house soap, threads, stocking-socket products, matches, glassware - for 40 - 23%. The reduction was also in the sale of motor bikes and bicycles, haberdashery, flax and wool fabrics, china-faience, clocks, leather, textile and combined footwear, toys and ornaments for a Christmas tree, agricultural machines and garden equipment

- for 17 - 9%. Stationary, paper goods, knitted goods, household soap, silk fabrics, plate, jewelry - for 7- 1%.

There was an increase in the sale of non-knitted goods for 87%, building materials, electric appliance, computing techniques, musical instruments - for 29 - 19%; cars and goods thereof, stockinet, textile products for household, perfumery goods and photographic and cinematographic goods - for 17 - 10%; toilet soap, electric illumination and electric lamps, wool fabrics and shawls, synthetic detergents, carpets and products thereof, clothes, headwear, furniture, printings, goods of domestic chemistry - for 7 - 2%.

Sale of agricultural products on the local markets during 1998 in comparison with the previous year reduced in general for 1%. At the same time the sale of planting products increased for 7%, livestock products - reduced for 7%. The prices in general in 1998 increased for 11%, including: bulb onion, cabbages - for 35% and 32%, fat, potato, vegetable oil, meat - for 27

- 33%, sugar, poultry - for 18 - 22%, eggs and apples - for 5 - 3%; at the same time there was a reduction of prices for carrots, beets, garlic -for 23 - 10%.

During the previous 1998 the volume of paid services, supplied for population by the enterprises of different form of property composed 10.3mlrd UAH, which in comparative prices, was less than the level of 1997 for 4,8%. Domestic services were supplied for population in the sum of 714,8 million UAH. Their specific weight in the general volume of paid services composed 7.3%, which is 0.4 less than in the previous year.

There was a reduction in the supply of paid and domestic services in the enterprises of the state form of property for 9.4 and 16% correspondingly.

Ukrainian enterprises executed foreign trade operations in January-November with the partners of 185 countries of the world.

In the accounting period there was a reduction of export-import volumes. Foreign trade turn-over of Ukraine for 11 months of 1998 reduced in comparison with the similar period of the previous year for 14% and composed 24.4 billion USD. At the same time the volumes of export reduced for 13% and import - for 15% and composed correspondingly 11.3 and 13.1 billion USD. But the rate of decrease for the last two months reduced. At the same time credit balance of foreign commodity trade reduced for 24% and composed 1.8 billion USD. The rate of import cover for the account of export composed 0.86 (for the similar period in 1997 - 0.85).

In comparison with the similar period in 1997 export volumes to the countries of former Soviet Union reduced for one-fourth, import volumes -for 20%. It took place for the account of trade volumes' reduction with the majority of former Soviet Union countries, including Russian Federation (export volumes reduced for almost one-third, import - for 12%). Export volumes to other countries of the world reduced for 4.9%, import -for 6.7%.

About 23% of export operations were executed to Russian Federation. To China, Belarus, Turkey and Germany it was exported 21% of commodities. Almost one half of import deliveries was executed from Russian Federation. From Germany, Turkmenistan, United States of America and Poland almost 19% of goods was imported.

Traditionally, more than one-third of export deliveries belonged to ferrous metals. A considerable part of export belonged to deliveries of the production of chemical industry and connected with it branches, mineral products, machines and equipment, steel and iron goods, means of land, water and air transport.

In comparison with the period of January -November of 1997 almost twice reduced the specific weight of food industry. It is stipulated by a sharp shortening of the export of sugar, meat and fish products, alcohol beverages. The share of live animals and livestock products, especially meat, milk, dairy produces and eggs reduced in 1,5 times.

In the total volume of goods import about half of them belonged to mineral fuel, oil and products of its refining. Import of machines and equipment, products of chemical and connected with it branches of industry composed more than 20% of the total import volume.

The process of the reduction of the share of export deliveries, executed on the terms of commodities exchange (barter) operations, continued. The specific weight of goods, which were exported on such terms, composed 7.6% in comparison with 10.5% of the correspondent period of the previous year, in import operations - 6.4% in comparison with 10%.

During the period of January - November of 1997 the give and take raw materials were exported for the amount of 90 million USD, or 0.8% from the total country's export. At the same time the end products were imported to Ukraine for the sum of 88.7 million USD, or 0.7% from the total country's import.

During 11 months of 1998 Ukraine received foreign give and take raw materials for the sum of 838 million USD, which composed 6,4% from the total import volume (15.2% less than in similar period of 1997). The end products, produced from the imported give and take raw, were exported for the sum of 1,233.2 million USD, or 10.9% of the total country's export.

Functioning of the registered market in 1998 was characterized by steady increase of labor surplus and cooling-off in its demand.

In 1998 1.4 million people turned to the State Employment Service for assistance in getting job, that is 27.8% more than in 1997.

The number of registered unemployed citizens on January, 1 1999 in 1.5 times exceeded the level of the previous year and reached 1,039.3 thousands people. Almost all citizens of that category had the status of unemployed (96.5%). The major part of unemployed belonged to women (61.8%), and there was a considerable increase of specific weight of youth in the age before 28 years old (up to 31.8%). For every 100 registered unemployed, 53 had a job before, 34 - had official position before.

Unemployed growth and the reduction of possibilities to employ them were the main reasons of the increase of unemployment growth.

The level of the registered unemployment in 1998in comparison with the beginning of 1997 increased for 1.4 and composed on January 1, 1999 3.7% of the efficient population in working age. This level was highest in Ivano-Frankivsk (7.2%), Chernigiv (6.5%), Lviv (6.1%), Volyn (6%), and Zhytomir (5.8%) regions and the lowest - in Kyiv-city (0,7%), Odessa region (0,9%) and Sevastopol-city (1.2%).

It should be mentioned that in the first half of the previous year enterprises' demand for workers grew up every month (approximately for 2.9 thousands people), but from June it started to move in the opposite direction (the reduction composed about 3 thousands people every month). For the period from June till the end of the year the number of free work places reduced for one-third (for 33.8%) or for 17.7 thousands and on January, 1 1999 it composed 34.6 thousands vacancies.

Such situation caused the increase of loading for free work places. In the end of July for one free work place (vacancy) there were 16 unemployed citizens, and already in the end of December their number increased almost in two times and reached 30 people. At the same time the loading for one free work place of the following categories for the same period also increased: workers vacancies - from 11 to 24 persons, official position - from 27 to 37 persons, vacancies that didn't demand special training -from 28 to 76 persons.

The biggest loading for one free work place remained in Ivano-Frankivsk (329), Volyn (137), Lviv (103) regions, and the lowest - in the cities:

• Sevastopil (4 persons), Kyiv (6 persons).

In the last year Employment center helped to find job for 390.6 thousands citizens. At the same time it is only one-fifth of registered. Among employed citizens almost one half were women (44.1%) and youth in the age before 28 (42.2%), one-fifth (18.9%) - persons, which require special social protection.

The number of citizens, who were unregistered without admissible excuse in the last year composed 606.8 thousands citizens, which is in 1.5 times higher than the number of employed ones and those, who receive ahead of time pension.

In 1998 there was an intensification of work of the State Employment Centers in the field of the organization of civil engineering works and assistance to unemployed citizens by skill conversion. Namely, Employment Centers sent 88.5 thousands unemployed citizens for professional education for them to get new qualification. That is in 2.2 times more than in 1997. The number of unemployed citizens, who were sent to civil engineering works, exceeded the level of 1997 in 1.8 times and composed 94.3 thousands persons or 4.6% of those, who were registered in 1998 (in 1997 correspondingly 51.1 thousands persons or 3.5%).

During the period of January - December 1998, from the State fund of employment assistance in order to solve the problem of unemployment was spent 208.2 million UAH, in comparison with 128.8 million UAH in the previous year. At the same time, monthly average volume of grants for one unemployed remained almost the same and composed in 1998 39.79 UAH, w comparison with 39.18 UAH in 1997.

Population

On January, 1 1999 enumerated population of Ukraine composed 50.1 million people. During the last year the number of inhabitants of our country was reduced by more than 400 thousand people. The main reason for this is still natural depopulation, which by estimate composed almost 300 thousands people. The natural depopulation level depends upon proportional birth and mortality.

In comparison with 1997 there was a reduction in the proportional birth: from 8.7 to 8.3 infant for 1,000 people. At the same time there was positive tendency in the reduction of mortality. B estimate, in the last year for every 1,000 people 14.2 died as against of 14.9 in 1997.

Environment

In 1998 there were 117 cases of volley emergency environmental pollution, which is 15% less than in 1997 and in 3-4 times less than in nineties. Seven of ten cases of volley emergency environmental pollution - were emission and polluting into water. The total amount of losses, caused by volley emergency environmental pollution composed 1,170 thousands UAH. Besides, six cases of volley emergency environmental pollution of the Black Sea (Odessa region) caused harm for environment in the sum of 518.6 thousands USD. About two-thirds of volley emergency environmental pollution took place in Ternopil, Lviv, Khmelnitskiy and Poltava regions.

The results of volley emergency environmental pollution were 18 cases of extremely high water pollution, 4 cases of land resources pollution and one case of air pollution.

The major part of those cases connected with the pollution of river and sea waters by chemical products, sewage effluents due to chemical products' damage, dumping from vessels, unfavorable weather conditions.

Except extremely high pollution, there were 860 cases of high pollution of surface-waters for 13 ingredient on 80 water objects.

Almost all river basins are polluted or too polluted. Among those rivers that suffered most from anthropogenic activities were Dnipro, Siverskiy Donets, Dnestr, Western Bug and Azov, where compounds of heavy metals, ammonia and phenol, sulfates and petrochemicals were revealed.

At the same time, in the last years there was a reduction of nitric oxide, phenol and petrochemicals in surface-waters; the heavy metals content remained at the same level.

From the permanent pollution sources in 1998 it was injected to the atmosphere, according to the calculation data, almost 4.4 million tons of harmful substances, which is 2% less than in 1997 and twice less than in nineties. More than 80% of general volume of polluting substances was injected into air basin by the enterprises of energetic, metallurgical and coal industries.

Levels of air pollution by nitrogen dioxide, ash, carbon dioxide and hydrogen sulfur were high in 10 cities of Ukraine.

The biggest general pollution of the atmosphere air was noticed in the following cities:

• Donetsk, Gorlivka, Yenakievo, Dzerzhinsk, Dnipropetrovsk, Lutsk, Lugansk, Makiivka, Mariupl, Odesa, Zaporizha, Slavansk, Kharkiv, and Cherkassi.

Soil examination in 16 cities showed that all of them had exceeded maximum permissible concentration of heavy metals.

Pesticides content in the soils of agricultural enterprises in all regions, except for Vinnitsa, Donetsk, Zaporizha and Kyiv didn't exceed maximum permissible concentration.

3.9 thousands cases of fires, which happened during the year in the forests of the country, caused significant losses. Fires covered 4.4 thousands hectares of forests, the sum of losses composed 4.6 million UAH. The main reasons of fires (96%) were the violations of rules of conduct and fire prevention in forests.

In 1998 the total number of crimes, registered by the Bodies of Home Affairs composed 576 thousands, which is 2.2% less in comparison with the previous year.

Despite the reduction of the level of crimes in general in the country, the criminal situation remained difficult. From the total number of registered crimes more than one-third were enormous (215.1 thousands crimes).

In the structure of crimes dominant position belonged to crimes for profit. More than one half of all crimes (57.3%) were thefts, robberies, assaults related to robbery, quack practices and theft of state or collective property by misappropriation.

The level of recidivous and organized crimes continued to grow (correspondingly 9.4 and 5.9%) - the number of registered crimes composed 81.4 and 79.3 thousands crimes.

In 1998 the Bodies of Home Affairs revealed 1,157 organized criminal groups, which is 7.2% more than in 1997. The number of offenses committed by those groups composed 9.3 thousands (in 1997 - 7.4 thousands crimes). Among offenses, committed by criminal groups the biggest specific weight (36.4%) belonged to the theft of state, collective and private properties -3.4 thousands crimes (increased in 1.3 times), assaults related to robbery - 7.2% (increased in 1.3 times), grand state and collective properties theft - 7% (increased in 1.2 times), racketeering - 5% (increased in 5.9 times), the number of bribery cases continued to grow (in 1.6 times). There was an increase of the financial, commercial crimes and crimes in the sphere of privatization (correspondingly in 2.1,1.7 and 1.6 times. From the members of criminal groups were seized 323 units of firearms and 276 cars (in comparison with the previous year there was an increase correspondingly in 1.2 and 1.5 times).

The number of crimes in the sphere of economy continued to grow - for 4.7%, among them the biggest growth was in the cases of simulated contracts - in 1.5 times, in the sphere of foreign economic activity and financial sphere - in 1.4 times (there were registered correspondingly 2.5 and 1.9 thousands crimes), in the cases of tax evasion - for 19.2%, fictitious enterprises -14.3%, bribery - for 10.5%.

Among found persons, who committed enormous offenses (330.1 thousands persons) there were 17.4% of women, 8.6% - non-adults. More than one half (60.1%) of persons, who committed crimes, didn't work or study. Every third of the number of persons, who committed crimes, did it in the group. Every sixth - was under the influence of liquor, every seventh - had been put to trial before.