Ukraine’s postindependence economic performance—in sharp contrast to its relatively successful efforts at state building and diplomacy—was markedly poor. The social dislocation brought about by economic “shock therapy” in Russia dampened the Ukrainian government’s desire for rapid change; it opted instead for a gradualist approach toward achieving a mixed economy. Economic decline followed, since Ukrainian industry was already suffering from the disruption of trade with former Soviet republics in the wake of the U.S.S.R.’s demise. Ukraine’s heavy dependence on foreign energy sources also strained the economy, particularly because Russia, Ukraine’s main supplier, moved to raise the previously subsidized price of fossil fuels to world levels. As a solid monetary policy had not been established, Ukraine experienced hyperinflation, which reached a rate of at least 4,735 percent in 1993. Meanwhile, corruption increased as political insiders grabbed state assets for themselves or took unfair advantage of low-interest loans available to industry and agriculture. A sustained attempt at economic reform came with the appointment of Leonid Kuchma as prime minister in October 1992. His efforts, however, were strongly opposed by a majority of parliamentarians and, to a degree, undermined by President Kravchuk himself. An exasperated Kuchma resigned in 1993.

Social developments

Postindependence society in Ukraine saw some positive developments. The media became much more open and vibrant, although those who were too openly critical of the administration were subject to harassment, notably during Kuchma’s presidency (1994–2005). Previous constraints on academic and intellectual life were lifted, resulting in a growing and diverse body of publications, and liberal arts and business schools began to emerge. There was substantial development in religious life, as the Ukrainian Orthodox and Ukrainian Catholic churches—as well as other denominations—were able to operate freely. In addition, a new generation of youth began to grow up without the ideological and intellectual constraints of Soviet society.

Relations with minority groups in the postindependence period were generally peaceful. The Jewish community experienced something of a renaissance, with the American-born chief rabbi of Kyiv, Yaakov Dov Bleich, playing an instrumental role in organizing synagogues, schools, and charitable activities. Moreover, the Ukrainian government openly pursued a positive relationship with the Jewish community. The Hungarians and Romanians in western Ukraine were afforded nationality rights, and the government made some efforts to assist the Tatars, tens of thousands of whom still resided abroad as a result of mass deportations in the 1940s. Unrest among the Tatars was limited in the postindependence period, in large measure because of the effective leadership of former dissident Mustafa Jemilev.

Ukraine’s large Russian minority found itself in an ambiguous situation in the postindependence years. As part of the dominant nationality within the U.S.S.R., it had maintained the preferred status of what some observers termed a “psychological majority” in Soviet Ukraine. In independent Ukraine, however, the status of Russians was less assured. Although granting Ukrainian Russians the full rights of citizenship was never an issue, many of them were frustrated that Russian was not recognized as the second official language of the country. This highly contentious matter was resolved to some degree in 2012, when a new law was passed that allowed regional authorities to confer official status upon minority languages. Moreover, the gradual Ukrainization of the school system has not been popular in regions of Ukraine with large Russian populations. The matter was further complicated by Russia’s vow to defend the rights of ethnic Russians in the so-called “near-abroad,” which includes Ukraine.

Postindependence Ukraine witnessed the growth of numerous social ills. Both street crime and organized crime increased, and Ukraine became a conduit for the international illegal drug trade. A rise in the number of drug addicts accompanied a worrisome growth in the number of people infected with HIV. The trafficking of Ukrainian women for the international sex trade also emerged as a serious concern—evidenced by the fact that Ukraine was the first former Soviet republic to host an office of La Strada International (a network of organizations that work to prevent human trafficking). Life expectancy fell, particularly for males, and occurrences of diseases considered long eradicated, such as cholera, were recorded. Many people—especially the elderly—were reduced to living in dire poverty, and many others sought work outside Ukraine, both legally and illegally, as migrant labourers.