UKRAINE IN THE WORLD
MARKET OF COMMODITIES
Kovalyuk Y., Savka T. Chernivtsi
Bukovyna State Finance Academy
The article deals with
the basic indexes of export and import of Ukraine. Commodity structure of
export and import, basic tendencies and ways of improvement of Ukraine’s
position in the world market of commodities are analyzed.
Presenting the problem. International trade occupies a special place in the complex system of
production-economic connections. Today, the main form of international economic
relations is foreign investment, that is why international trade with its
scales and functions keeps an exceptionally important position in the general
complex of international economic relations. It combines practically all types
of international cooperation, including joint production activity of
international transactors, international exchange of technologies and others.
Economic success of any country of the world is based exactly on international
trade. Yet not a single country succeeded in creating an effective and
independent economy by isolating it from the world economic system and
globalization processes.
There is not only world market of commodities, but also world market of
services in the world economy. Structure and directions of trade of separate
countries are formed under change of competitiveness of their commodities in
the world market.
Today, effective integration of Ukraine into international economic area
is an exigent task for the development of its state system and economy. But in
order that this process brought about the expected results, it is necessary to carry
out a few important initial steps. They must be based on:
– clear awareness of the real capabilities in the area of production and
distribution of goods and services;
– forecasting of tendencies in the changes of external economic
environment (systems of world economy), in which the national economy of
Ukraine must function;
– well-considered choice of its permanent place in the structure of the modern world
and the proper establishment of strategic alliances;
– awareness of necessary transformations of national economy, which
could provide effective cooperation with the world economy based on a high
level of economic competitiveness.
The aim of the article is to research volumes of export and
import of commodities of Ukraine, and share of these commodities in world
circulation of commodities.
Analysis of the latest
researches and publications. Such national
scientists and researchers dealt with this problem: D. Ashikhmin [1], O.
Avramenko, M. Rudenko [2], T.Hromova, O. Sidorenko [3], B. Karpinskiy, V. Dubik
[4], G. Koval' [5], L. Lisova [6], T.Logutova, L. Kapranova [7], O. Suburbs [8]
et al.
Exposition of the main
material. Ukraine is only becoming part of the world economic
system and on how this process will develop depend possibilities of its
subsequent economic and social development.
To begin with, Ukraine will run into great difficulties in the process
of integration into global economic area. It is stipulated by the following
number of reasons:
– vagueness in basic directions
and mechanisms of the structural reorganization of economy;
– active competitive opposition in the world market, flexibility of
strategy and tactics of international and national producers;
– unfavorable investment climate;
– growth of gas prices;
–
rapid growth of social expenditure;
–
insufficient reforms in agriculture.
In spite of the long-lasting and deep economic crisis, preconditions
still exist for creating competitive economy in Ukraine, which could strengthen
positions on international markets – these are, above all, rich natural
resources, advantageous geographical location, skilled and comparatively cheap
labour force, high-tech, science and relatively effective system of
education.
Nowadays Ukraine gradually activates its participation in the world
commodity market. Geography of partnering countries is gradually increasing, at
the same time, the structure of export testifies about its minor
diversification: share of metallurgical, chemical, oil-processing industries
and Agroindustrial complex (abbr.- AIC)
constitutes 60%.
However, during the last three years external trade turnover has
diminished. The structure of both export and import is declining. Export of
products of separate industries is ineffective, quite often – simply
unprofitable. The raw material orientation of the Ukrainian export
predetermines its susceptibility to the price-waves in the world market.
The volume of export and import of commodities for January-September in
2010 constituted 36252,78 million and 41680,29 USD accordingly, that was 132,1
and 132,2% from the volumes of the same period of the previous year. Subzero
balance of international trade of commodities was 5427,51 USD. International
trade transactions were carried out with partners from 212 countries of the
world. The countries of the CIS it is exported 34% all commodities, to the
countries of EU – 23,8% (in January-September of 2009 – according to 34,4% and
26,9%). Russian Federation remains the closest trading partner of Ukraine
(21,1% export and 28% imported deliveries). Among closest trading partners in
January-September in 2010 in comparison to the same period of the previous year
export deliveries grew to China – by 2,6 times (due to export of black metals,
ores, slags and ash) and to India – by 13,1% (due to export of animal and
vegetable fats and black metals). The volume of export to Italy decreased and
was 39,5% as compared to level 9 months in 2009, to Turkey – 42,7%, to Poland –
50,2%, to Russian Federation – 50,6%, to Byelorussia – 59,4%, to Germany –
64,9% and to Kazakhstan – 83,1% [9].
General volume of commodities export for January-September in 2010 in
comparison with the same period in 2009 share of grain-crops, mechanical and
electric machines, animal and vegetable fats increased. But share of black
metals, power materials, oil and products of its distillation, wares of black
metals, fertilizers, railway or tram-car locomotives, and transport equipment
decreased.
Thus, basis of commodity pattern of trade Ukraine, as well as before, is
made up of mineral products,
non-precious metals and wares of them, mechanical and electric machines,
chemical products and industries related to them, green products.
At present volume of export of Ukraine does not correspond to
capabilities of commodities producers and does not meet the requirements of the
country in currency receipts and in decline of inflation level.
There are grounds to assert that potential for extensive development of
export is already almost depleted. It is necessary:
1) to implement high-quality changes;
2) to modify structure of export in direction of increase of share of
ultimate products in the general volume of export;
3) to facilitate efficiency of export transactions;
4) to restore availability of national products on traditional markets and
establish positions on new perspective markets;
5) to improve government control of external economic activity.
Ukraine imports industrial and medical equipment, electronic devices,
chemical commodities, coffee and citruses from countries all over the world.
The closest economic ties exist with Hungary, Poland; Donetsk coal is supplied to Italy, France and Egypt. Iron ore is
supplied to Poland, the Czech Republic, Slovakia, Hungary, Romania and
Bulgaria.
It should be noted that despite relatively developed industry in
Ukraine, its products can compete mainly on the markets of the CIS and those of
developing countries. Ukraine has a considerable base of raw materials and rich
deposits of minerals, but the surplus export of mineral raw materials at low
prices does not bring proper returns.
AIC has a powerful base for
development and also possibility of rapid export specialization, but low
productivity and quality of agricultural products and the state of technologies
of AIC restrain Ukraine from entering world commodity market.
In addition,
there is powerful technological capability of military complex and established
scientific potential in Ukraine, however funds on its effective development as
well as on introduction of scientific developments are not allotted. By its
economic and scientific potential, Ukraine is included in the top five
countries of Europe, and by efficiency of their use is placed bottom of the
first hundred.
Taking into account the progress of world economy trends and in Ukraine,
in our view, it should concentrate its efforts on the following:
– development of agriculture;
– generation of new knowledge and technologies, based on it;
– advancement of traditional types of commodities of national economy
and their export.
The lack of food is sensed ever stronger in the world, and the land fund
of Ukraine (one of the best in the world) is not used fully. If the sowing
areas are increased, the structure of sowing is optimized and modern,
sophisticated technologies are applied, Ukraine will be able to increase the
volumes of export substantially and take the deserved place among the exporting
countries of agricultural production.
Membership in the WTO is important condition for Ukrainian commodities
and services to be represented on the international markets. Upon introduction
of the mode of greatest assistance in relation to the Ukrainian products,
producers will be able to access markets of other countries on the best
possible terms. Practically it means that Ukrainian commodity producers will be
able to supply products to the markets of member-countries of the WTO subject to conditions no less advantageous
than those of other member-countries of the WTO. For producers potential
benefits will also be related to the decrease in commercial risks – through
establishment of more stable trade mode which will facilitate corporate
strategic planning, and will also result in decrease in transport expenditure
due to guaranteeing freedom of movement for member-countries within the WTO
territory. On the whole, it will be instrumental in decrease of cost price of
Ukrainian production, and will consequently lead to increase of its
competitiveness [7, 257].
Important condition of Ukraine’s inclusion to international processes is
correspondence of domestic social standards to the international ones. Today,
Ukraine ranks bottom almost on all social development indexes in the world.
That concerns other indexes as well. For example, labour productivity is 10
times lower than in the USA and 8 times lower than in France etc. Wages are 12
times lower than in the USA and almost 9 times lower than in France [1, 185].
Ukraine has considerable competitive natural advantages: highly skilled
labour force, advantageous geographical position, rich natural resources etc.
But its potential advantages need yet to be developed and implemented. For this
purpose a number of factors are necessary:
1.
multilateral provision of favourable terms for Ukraine’s inclusion in to world
markets, support of domestic exporters and producers of competitive products;
2.
establishment of effective banking and flexible credit systems, guaranteeing
rights for the proprietors of currency assets and their free (within the
framework of legislature) use;
3.
creation of foreign trade infrastructure and new system of its informative
provision;
4.
exercising flexible import policy (tariff adjustment, mechanism of import
limitation, volumes and inventory of commodity nomenclature of critical import;
5.
improvement of the system of government control of international trade (legal
base arranged in accordance with international rules and standards, limited
protectionism, complex of normative documents).
As far as its production is concerned, Ukraine is at the stage of
competitive development, which is predefined by natural factors. Therefore, for
the increase of competitiveness of domestic economy the quickest possible
transition to the next stages of competitive development is needed, which are
predetermined by capital investments and innovations [4, 150].
Conclusion. Thus, there exist sufficient conditions for the assumption that Ukraine
has chances for improvement of its positions on the world market. This
achievement is possible only under condition of carrying out proper
international trade policy, when alongside with development of traditional
export potential export industries will develop in accordance with tendencies
on the world market. This can be achieved by assisting production of processed
high end goods using advanced technologies, which will enable to use the
available resources more effectively.
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