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Part 1 of the Economic Angle of the Russia-Ukraine War (Episode 11)

Ukraine has long been known as the “breadbasket” of Europe because of its agricultural success and particularly grain production. According to ABC News, “Together, Russia and Ukraine export nearly a third of the world’s wheat and barley, more than 70% of its sunflower oil and are big suppliers of corn … World food prices were already climbing, and the war made things worse, preventing some 20 million tons of Ukrainian grain from getting to the Middle East, North Africa and parts of Asia.” Corn, wheat, and meslin are Ukraine’s biggest exports, accounting for around 18% of Ukraine’s 52B dollar export industry. On the other side of the equation, China, Turkey, Egypt, Poland, Russia, and Germany are the biggest consumers of Ukrainian exports, reflecting the fact that most of Ukraine’s export markets are concentrated in Eurasia and North Africa. Prior to the war, Russia was Ukraine’s biggest trading partner.


Under the Soviet Union, regions of heavy industry were also developed in Ukraine, which produced 17% of the bloc’s industrial output. Donetsk, a region in eastern Ukraine, is the industrial heartland of the country and a major producer of steel. Ukraine also produces a great deal of transportation equipment, heavy machinery, agricultural equipment, and chemicals. When Ukraine was still part of the Soviet Union, it was an important arms producer, manufacturing and assembling rockets and naval vessels. In fact, the world’s largest missile plant used to be in Dnipropetrovsk, a region in southeastern Ukraine. However, since the collapse of the USSR in 1991, many of these facilities have been repurposed and now produce a variety of goods, ranging from aerospace technology to agricultural equipment.


Ukraine is rich in natural resources, including minerals such as iron ore, which support the country’s heavy industry and steel production. In addition to iron, Ukraine has large deposits of manganese, titanium ore, coal, ozokerite, potassium salt, rock salt, and mercury, among other elements. Petroleum and natural gas reserves can also be found throughout the country, though mining has exhausted much of the supply. The extensive energy supply initially warranted the creation of pipeline transport systems within Ukraine, but now the most important pipelines flowing through to Ukraine connect Europe to Siberian gas and oil fields. Throughout the war, Russia has used Europe’s dependence on Siberian natural gas as a weapon, decreasing and even completely shutting off the energy supply to increase the pressure on the European Union.


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