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Overview of Kharkiv Oblast Kharkiv oblast is located in the north-east of Ukraine. The territory of the oblast is 31,400 sq. m (5.2% of the territory of Ukraine). Population – 2,969,900 (6% of the population of Ukraine), population density – 95 persons per 1 sq. km There are 27 administrative districts, 383 village councils, 17 towns including 7 towns of oblast subordination, 60 townships, and 1694 villages in the oblast.

Kharkiv oblast is one of the largest industrial and agrarian, scientific, educational and cultural centers of Ukraine.

Historically, favorable natural conditions, extremely valuable black soils (chernozem), very good opportunities for trade have always attracted foreigners. This, in its turn, gave an impetus to industrial development, agriculture, transportation, trade and municipal economy.

In the late 1800s – early 1900s foreign capital investments promoted the industrial development.

It was foreign economic participation that was a key factor in increasing the rate of economic development, increasing the volumes of production, transformation of an agrarian region into an intensively developing industrial one, and Kharkiv became a largest industrial center.

Machine-building sector was developing.

The firm "Belke & Co" started manufacturing various factory machines, it established an iron and brass casting, mechanical and boiler plants in Kharkiv.

In 1870, A.A. Pilstrem invested capital into establishing a machine-building and an a iron-casting plants (at present, these are a machine-building plant "Chervony Zhovten").

The company M. Helferich-Sade established a plant manufacturing harvesting machines and tools. In 1904, this enterprise merged with a Belgian company (nowadays the plant "Serp I Molot").

The Leutner's Bicycle Plant which started its operations in 1915, became Kharkiv Bicycle Plant in 1923.

The plant of "Vseobschaya Electricheskaya Kompaniya" ("VEK" – the largest monopoly in the electrical sector of the USA) started its operations in 1915. The initial value of the main capital was 4.8 million gold roubles (at present, it is Kharkiv Electromechanical Plant).

Besides, whole sectors of industry were established with foreign capital investment. These included distilleries, breweries, tobacco factories, sugar-beet plants and printing houses.

The second stage of industrial development took place in 1920-1930s, when Kharkiv was the capital of Ukraine. During that period giant plants were built, among them Tractor plant, "Electrotyazhmash", and Machine-tool-building plant. Heavy engineering and metal-working sectors were developing.

The scientific potential was formed. Only in 1029-1931, 23 institutes were established (the greater part was based on Kharkiv university and the Polytechnical institute).

In pre-war years, by the speed of industrialization, Kharkiv ranked among the first among the industrial centers of the Soviet Union.

During the Great Patriotic War (World War II), Kharkiv industry was practically ruined –300 enterprises were leveled to the ground.

The third stage of intensive industrial growth was after the Great Patriotic War.

One year after the liberation of the oblast, 247 industrial enterprises of the city resumed their operations, and by 1948 the pre-war level of industrial output was achieved.

In 1945-1950, the rate of industrial output in the oblast was higher by one third than that in the USSR.

Alongside traditional sectors, enterprises of the defense complex started their development. Such enterprises as "The Plant of Electrical Equipment", "Proton", "Relay Works", Design Bureau "Electropriborostroyeniye" (now "Khartron"), the Plant of Radioelements, etc launched their operation. Many enterprises became considerably developed, among them "Malyshev Plant", Kharkiv Aviation Plant, "Kommunar", "FED", "Instrument-making Plant named after Shevchenko".

In the oblast sphere of material production nearly 6.5% of the national income of Ukraine is produced. In the region 674 industrial enterprises employing 244,200 people are concentrated. As for industrial production, the oblast occupies the 5th place among the regions of Ukraine. In the structure of material production the largest shares belong to machine building and metal working (33.5% of the total industrial production of the oblast), food processing industry (18.0%), power industry (22.2%), fuel industry (14.5%), industry of construction materials (3.1%), and light industry (0.9%). Plants of the region account for all the steam turbines made in Ukraine, 60% of tractors, 55% of rolling bearings, nearly half of program-controlled and large electric machines, 43% of gas extraction, 44% of ceramic facing tiles, 23% of roofing slate, about 20% of cement, bridge electric cranes, caustic soda, asbestos-cement pipes and couplings.

The Kharkiv region is justly considered the country’s leading machine-building center. Here a powerful tractor-building complex is established, which includes such companies as OJSC "Kharkiv Tractor Plant", OJSC "Kharkiv Plant of Tractor Self-Propelled Chassis", OJSC "Serp i Molot (Sickle and Hammer)", OJSC "Lozova Forging and Mechanical Plant", OJSC "Kupyansk Foundry", and OJSC "Kharkiv Plant of Tractor Motors". Development of agricultural machine building is considered one of the priority directions of the regional economy.

Power equipment with Kharkiv trademark is also well known far beyond the borders of Ukraine. It includes steam, hydraulic and gas turbines of OJSC "Turboatom" and State-Owned Company "Electrotyazhmash".

Multipurpose aircraft of Kharkiv State-Owned Aircraft Building Enterprise attract much attention of participants and guests of international aircraft trade shows.

There is a demand for polishing machines manufactured at the machine-building OJSC "KharVerst" in the world market.

The fuel and energy complex of Kharkiv oblast is unique in Ukraine. The differences are conditioned by two factors: first, nearly half of the Ukrainian gas is extracted in the region; second, the power system of the oblast is separated from the integrated power systems of Ukraine and supported by own generating capacities and transfers from Russia.

The fuel and energy complex includes gas extraction companies – Gas Production Department "Shebelinka Gas Extraction" and Gas Production Department "Kharkiv Gas Extraction", and power generation companies – State-Owned Company "Zmiiv Thermal Power Plant" and State-Owned Company "Kharkiv Thermal Power Plant - 5".

There are 39 gas and gas condensate deposits with estimated reserve of 318 billion cubic m of gas. About 7 billion cubic m of gas are annually extracted from the exploited gas bore-wells.

The centralized energy supply on the oblast territory is provided by power plants with the total capacity of 3,179.1 MW (including "Zmiiv Thermal Power Plant" – 2,400 MW).

The oblast possesses unique scientific and industrial potential which carries out research, development of scientific and technical documents and production of medical products. It comprises: the State Scientific Center of medical products (DNCLZ), the National Pharmaceutical Academy of Ukraine, 10 research medical institutes, 6 enterprises and associations ("Zdorovya", "Chervona Zirka', "Biolik", "DNCLZ Experimental Plant", "Stoma", Zdorovia Narodu", etc).

The enterprises produce over 300 kinds of medical products, over 20 diagnostic products, veterinary products, valve systems, dental mechanic products, etc. The products are manufactured in 11 forms and represent 24 pharmaceutical-therapeutical groups.

By the concentration of enterprises and the number of pharmacological groups of the medical products, Kharkiv oblast ranks the second after the Kyiv oblast, and ranks the first by the range of groups. Alongside the plants manufacturing medical products, a company manufacturing substances is also operating in Kharkiv – "The Plant of Chemical Agents".

The oblast's chemical and pharmaceutical enterprises have enough capacities to manufacture medicines of practically all pharmaceutical groups. By the product range, the products manufactured by Kharkiv plants are about 30% of the medical products manufactured in Ukraine, while some productions (those of vaccines and serums) are unique in Ukraine.

About 400 companies of the oblast manufacture consumer goods. They produce nearly 9,000 kinds of products.

The oblast accounts for nearly one third of laundry washers, TV sets, electric vacuum cleaners manufactured in Ukraine, for a half of margarine products, medical products and medical tools, and for 90% bicycles manufactured in Ukraine.

The oblast's light industry is represented by 60 leading enterprises of the sector, including: 18 textile ones, 30 clothing, 5 knitwear, 3 leather, 2 fur, and 2 footwear-manufacturing enterprises. They manufacture coats, knitted clothes, carpets, footwear, etc.

Agroindustrial Complex

In terms of the gross output the oblast ranks the 5th in Ukraine.

The oblast share in the national agricultural gross output is 5.1%.

639 agricultural enterprises of different forms of ownership, 1,102 farms, and over 260,000 individual land-plots of country dwellers are involved into agricultural production in Kharkiv oblast.

The area of agricultural lands is 2.4 million hectares including 1.9 million hectares of arable land.

The oblast is distinguished among other regions of Ukraine by its high level of grain, sugar beets, and sunflower production and intensive meat-and-dairy livestock breeding. "Slobozhanskyi" hog farming complex operating in the region is one of the largest in Ukraine: it holds about 100,000 hogs annually.

7 research institutes specializing in agriculture provide scientific support for the oblast agroindustrial complex.

Food processing industry of the oblast includes 18 sub-sectors with 185 companies involved. These enterprises altogether employ about 40,000 people and account for 1.2 billion sales.

The high level of the oblast's economic potential and the high density of the territory population are prerequisites of development of various transportation means – railway, automotive, pipeline (gas pipeline), subway (3 lines, 26 stations).

The air carrier "Kharkiv Airlines" offers flights to 7 countries of the world from the "Kharkiv" Airport.

The volume of mail and telecommunications increases every year. At present, the oblast ranks the 3rd in Ukraine in terms of the number of apartment telephones, city and country pay phones, ranks the 5^th by the number of long-distance pay phones.

Kharkiv oblast science has made a proud contribution into development of a number of fundamental scientific directions.

The theorists of the institute of physics and technology that used to be headed by L.D. Landau have a worldwide recognition. A significant contribution into formation of the economic science in 60-70s was made by Doctor of Economic Sciences, Professor Ye.G. Liberman.

The first splitting of atom, research into the nature of superconductivity, creation of the first radio-locator, development of the foundations of the theory of oscillations in plasma and processes of dispersion of slow neutrons in crystals – that is far from being the complete list of the achievements of Kharkiv researchers.

They also played a significant role in solving the problems of creation of highly efficient machines and equipment, advanced technologies promoting high industrial growth rates, and strengthening the power and defense potential of the country.

Tank and tractor, space flight automated control systems, and turbine building schools have been established in Kharkiv.

Kharkiv oblast occupies the second place on the national scale after the city of Kyiv and the first place among the regions of Ukraine for its scientific potential.

6 academic institutes, 82 higher education institutions of different forms of ownership, and nearly 200 sector research institutes of the region employ 97 academicians and corresponding members of the National Academy of Sciences of Ukraine, 1498 Doctors of Sciences and over 9,000 Candidates of Sciences.

The total area of the housing resources available in the oblast exceeds 59 million sq. m.

The total daily capacity of the water supply facilities is 2,264,900 cubic m, that of the purification facilities is 1,230,000 cubic m. The total length of the water supply network is 5,036.4 km, that of the drainage and collector system – 2,839,700 km.

The oblast operates 3,489.5 km of heating network, 1665 boiler houses, and 230 heat distribution stations.

The passenger rolling-stock totals 1068 units including:

—tram cars — 594 units;

—trolley-buses — 474 units.

966 comprehensive schools (including 16 lyceums, 8 gymnasias) having 370,000 students, 789 nursery schools attended by 62,300 children; 100 leisure establishments for children; 53 vocational schools, 45 higher education institutions of I-II accreditation levels and 24 of III-IV accreditation levels function in the oblast.

About 31,000 students go to new-type schools, namely lyceums, gymnasias, and teaching and educational institutions).

The oblast is also a large medical center where there are over 423 healthcare institutions employing 13,600 doctors and about 30,000 paramedics. A ramified network of specialized centers providing high-quality medical aid is established.

12 research institutes of medical specialization function in the oblast.

Kharkiv oblast has rich cultural traditions. On its territory there are 6 national theatres including 3 academic ones, the regional philharmonic society, a chamber and organ music hall, a circus, 33 museums with the historical and the arts museums being the most significant, about a thousand libraries of different systems accountable to different agencies with the State Scientific Library named after V. Korolenko having over 6 million volumes being one of the largest in Ukraine.

Besides, about 700 clubs and culture centers, recreation parks and the oldest in Ukraine zoo offer their services to the public.

Specialists for culture and arts institutions of the whole of Ukraine as well as of foreign countries are trained at the Institute of Arts and the Institute of Culture, culture, music and art colleges, and 78 aesthetic education schools.

National and international contests named after V.Kraynev, B.Kotorovich, P.Lutsenko, V.Gorovits, B.Lyatoshynskyi, K.Shulzhenko, "Kharkiv Assemblies" are established in the Kharkiv region. The International Folklore Festival "Pokut’" has become traditional.

There are 11,300 small businesses operating in the oblast, which makes 3.7 small business units per 1,000 of population (the all-Ukrainian rate is 2.0 units).

102 banks including 13 commercial banks having the legal entity status, 17 exchanges, 9 business centers, 1 leasing companies, 3 business incubators, 3 entrepreneurship promotion funds, and over 200 information-consultative and legal establishments for enterprise support function in the region.

Kharkiv oblast ranks the 9^th among the regions of Ukraine for goods exports and the 6^th for imports. The oblast's share in the Ukrainian foreign trade turnover for the three months of 2000 was 3.2%, including 2.1% in exports and 4.4% in imports.

For three months of 2000, the oblast's enterprises had foreign-trade transactions with partners from 90 countries of the world. The volume of foreign trade during that period was USD 184,900,000, which is 38.1% less against the corresponding period last year.

The largest volumes of export-import transactions were with Russia Federation – 56.5% and 33.9% respectively.

The main goods to be exported beyond Ukraine were machines and equipment (29.4% of total exports). The basic imports consist of: mineral fuel (31.4%) and machines and equipment (14.5%).

In 1999, 82 official delegations visited the oblast including a Polish delegation headed by the Polish President, two American delegations headed by the Deputy Coordinator of American Support to NIS Mr. Clifford Coopchan, a Bavarian businessmen delegation headed by the Minister for Economy, Transportation and Technologies O. Wizgoe, other delegations, as well as ambassadors extraordinary and plenipotentiary of many states.

International work is promoted by the Kharkiv-based Consulates General of Russia Federation, and that of the Republic of Poland which operate for eight oblasts, information and cultural centers of France, Great Britain, Germany, Vietnam and Israel.

As of April 1, 2000, the total volume of foreign investment into the region’s economy has been attracted at the amount of USD 83.2 million from 37 countries and allotted to 179 enterprises.

Investment to the oblast's enterprises were mostly made by non-residents from developed countries – over 61% of all investment. For instance, the volume of investment from the USA was USD 5.1 million, that from Liechtenstein was USD 5.5 million, Luxembourg USD 5.7 million, Germany 4.3 million, Russia Federation USD 2.0 million, Ireland USD 1.8 million, Great Britain USD 6.2 million and Switzerland USD 22 million.

Industrial enterprises account for 42.7% of all foreign investment, including food industry receiving 33.3% of all the investment, machine-building and metal-working receiving 5.2%. We can single out foreign capital investment into trade and public catering – USD 30.5 (36.6% of the total volume of investment), maintenance supply and sales – USD 2.4 million (2.9%), science and scientific services – USD 6.5 million (7.9%), finance, credit, insurance, provision of pensions – USD 2.8 million (3.4%), and construction – USD 1.5 million (1.8%).

Five enterprises of Kharkiv oblast made their contributions to the economy of Russia Federation, and one – into that of Belarus.

In order to preserve the unique production and scientific and research potential of the region in the sectors of priority importance, which are power engineering, electrotechnical, agricultural and tractor machine-building, aerospace, aviation and pharmaceutical sectors, the draft Law of Ukraine and decree of the President of Ukraine "On special regime of investment activities in the priority sectors of economy of the scientific and production complex of the city of Kharkiv".

The US Government and Kharkiv Oblast State Administration with support from the Cabinet of Ministers of Ukraine and the Executive Committee of Kharkiv City Council are implementing for the first time in Ukraine a Ukrainian-American international project of regional economic development "Kharkiv Initiative".

The launching of the project "Kharkiv Initiative" is a vivid confirmation of the preference given by the US Government to Kharkiv oblast as a region which, from the viewpoint of the prospects of the economy adaptation to free market conditions and potential attractiveness for investment, is a unique place for large-scale international investment projects and implementation of the most promising integrated programs of long-term Ukrainian-American cooperation.

The main tasks and goals of the initiative are creation of a favorable business climate and attracting private investment into the region's economy, creating new jobs and increasing the living standard of Kharkiv oblast citizens owing to private sector development and speeding up reforms in the region, expanding markets for products manufactured by Kharkiv enterprises taking into account foreign economic liabilities of Ukraine proceeding from its European and transatlantic integration. Such a solution can be found within the framework of search for common interest of Ukraine and the USA in the third world markets and those of the CIS with products of Kharkiv enterprises re-orientation to manufacturing competitive products including those of joint Ukrainian-American production.

The project's main directions are:

1. Development of business cooperation and attraction of foreign and domestic investment to the region's sectors of strategic importance.

2. Small and medium business development.

3. Commercialization of scientific and technological achievements of the oblast.

4. Development of food and processing industry and agriculture.