Weekend Economists Salute the 99% September 26-28, 2014

[MattSh]

39. Ukraine Is On The Brink Of Total Economic Collapse - Business Insider

While we see a great deal of media coverage of Ukraine-related geopolitical risks, there hasn't been sufficient discussion about the dire economic and fiscal conditions the nation is facing.

Writing about men in masks fighting in eastern Ukraine sells far more advertising than covering the nation's economic activity. However it's the economy, not the Russian army that has brought Ukraine close to the brink.

And just to be clear, some of Kiev's economic and fiscal problems were visible long before the spat with Russia (see post from 2012).

Ukraine is now in recession. Deep economic ties with Russia have resulted in painful adjustments in recent months. The nation's exports are down some 19% from last year in dollar terms and expected to fall further. A great example of Ukraine's export challenges is the Antonov aircraft company known for its Soviet era large transport planes as well as other types of aircraft.

As the military cooperation with Russia ended, Antonov was in trouble. It had to take a $150 million hit recently by not delivering the medium-range An-148 planes to the Russian Air Force. The Russians will find a replacement for this aircraft, but in the highly competitive global aircraft market, it's far less likely that Antonov will find another client.

Here are some key indicators of Ukraine's worsening situation:


http://www.businessinsider.com/ukraine-is-on-the-brink-of-total-economic-collapse-2014-9