text: However, Ukraine has failed to embrace the political and economic reforms that will bring it into twenty-first century Europe. Its state institutions, particularly those that promote the rule of law, are weak. It is ruled by competing oligarchies that skirmish over the division of resources and power. Its leadership resists constructive change, preferring a course of stagnation that benefits themselves and their associates. Freedom of the press appears endangered. President Leonid Kuchma has even been accused of complicity in the murder of an outspoken journalist who had dared to criticize corruption at the highest levels of the Ukrainian government.
  After a continuous and severe decline during the 1990s, the Ukrainian economy is experiencing modest growth in the early years of the current century. However, privatization of the economy is incomplete and characterized by massive corruption. The economic base is narrow and concentrated in areas where foreign markets are highly competitive, particularly agriculture, chemicals, and heavy industry (mining, steel, machinery, transportation equipment, and military hardware). Further, recent gains will do little to offset the enormous decay of the last decade. Capital needs in basic infrastructure — health care, education, communications, and transportation — are almost beyond calculation. Ecological degradation is severe, causing untold damage to the health of local residents and to the well-being of the entire country. Skilled professionals continue to emigrate, seeking political and economic stability elsewhere.
  Average per capita income in Ukraine is less than $600. Many payrolls are about 20 weeks overdue. Pensions range from about $9 to $15 monthly, obviously inadequate in a society where the poverty line is about $30 monthly. Barter dominates a large segment of the economy, a reality that erodes much of the potential tax base. The existing tax system is capricious and often punitive, and corruption in tax collection is rampant. Consumer price inflation in 2000 was 25 percent, a significant increase over that of 1999. International lenders, such as the International Monetary Fund, point to several systemic problems in the Ukrainian economy, including unrealistic budgeting, an oversized bureaucracy, partisan political interference in routine government and economic decisions, delays in privatization, inadequate legislation governing business transactions, and excessive international debt.
  Severe budgetary problems afflict most cities and institutions. Heat and hot water, which are centrally controlled by municipal authorities, are turned off in some cities for months at a time. Hospitals and universities have closed entire departments. The situation in smaller cities and towns is especially bleak.
  The population of Ukraine has fallen precipitously since 1991, from 52 million to 49.5 million at the turn of the new century. Reflecting economic distress and gravely compromised health care, Ukraine (and Russia) are suffering serious demographic decline. The largest Ukrainian cities are: Kyiv, the national capital (about 2.6 million people) in central Ukraine; three industrial centers in eastern Ukraine — Kharkiv (1.5 million), Dnipropetrovsk (formerly Ekaterinoslav) and Donetsk (each about 1.1 million); and the Black Sea port of Odesa (about 1 million).