As these lines are being written, Russian tanks are invading Ukraine from various directions, while cruise missiles are striking cities and military installations across the country. This full-scale invasion, which began on the morning of February 24, has been in the works for a long time.
Its architect, Russian President Vladimir Putin, shaped it rhetorically and politically years before he amassed 100,000 troops along the Ukrainian border in early 2022.
Putin’s historical romanticism regarding Ukraine, one of the founding nations of the Soviet Union, has been well known for decades, but it is his 5,000-word essay (which reads more like a blog post) that we will remember as his ultimate justification for war. Published in mid-2021, it is both a masterclass in disinformation and a love letter to the «kindred spirits» of the Russian and Ukrainian peoples.
For example, in his essay, Putin is sparing in his references to the wealth of the Ukrainian economy. And while he idealizes the Soviet period as the pinnacle of the shared cultural experience and heritage of the two countries, he remains tight-lipped about Ukraine’s obvious economic allure—and what an allure it is!—as shown in the tables below.
Ukraine's ability to attract foreign investors is evident
Like Putin, foreign investors also recognized the opportunities offered by the Ukrainian economy and, as a result, in 2020, six years after the Russian invasion of 2014 and despite the lingering crisis that followed, there were still nearly $50 billion in accumulated foreign direct investment in the country.
Over the past three decades, hundreds of foreign companies have opened branches throughout Ukraine (mainly in its western regions bordering the EU), with German automakers being the largest investors. Ukraine is an important part of the EU’s automotive parts supply chain. Meanwhile, in Kyiv and Lviv, more than 100,000 people are employed as outsourced contractors for major global technology giants, such as Facebook. .
«Ukraine offers a large consumer market, a highly educated and cost-competitive workforce, and abundant natural resources,» states the 2021 Investment Climate Report from the U.S. Department of State.
The country’s vast potential is one reason why it has become a top destination for the European Investment Bank (EIB), which invested 554 million euros (620.1 million dollars) in vital infrastructure projects across the country in 2021. Ukraine is the EIB’s top investment destination in the entire Eastern Bloc, accounting for more than 60% of the bank’s lending in the region.
The value of Ukraine’s economy, as well as the state of emergency amid a full-blown crisis, are reflected in the stock market’s reaction to the February 24 invasion of the country. Wall Street plummeted that day, with the Dow Jones Industrial Average falling by more than 800 points, while the price of oil skyrocketed—to Putin’s advantage—to a seven-year high of nearly $105 per barrel (a windfall that oil-rich Russia certainly did not reap by chance).
To help you better understand the wealth of Ukraine’s economy, the following section of this article will list Ukraine’s global rankings for key resources and exports.
Classification of Ukraine's Natural Resources s
First in Europe in proven recoverable uranium ore reserves
Second place in Europe and tenth place in the world in terms of titanium ore reserves
Second place globally in terms of proven manganese ore reserves (2.3 billion metric tons, or 12% of global reserves)
The second-largest Global iron ore reserves (30 billion metric tons)
Second place in Europe in terms of mercury ore reserves
Third place in Europe (13th in the world) in shale natural gas reserves (22 trillion cubic meters)
Eighth place in terms of global coal reserves (33.9 billion metric tons)
Agricultural Classification of Ukraine
First in Europe in terms of arable land
First place a world leader in sunflower and sunflower oil exports
Third place in the world in terms of the area of black soil (25% of the global total)
The third-largest world's leading potato producer
Fourth place the world's leading producer of barley and fourth in barley exports
Fourth largest world's leading rye producer
Fifth largest a producer and the fourth-largest exporter of corn in the world
Fifth place in the world in honey production (75,000 metric tons)
Fifth place in the world in wheat exports
Ranking of Ukraine's Industrial Sector
The second-largest in Europe and the seventh largest in the world in terms of installed nuclear power capacity
The third-largest natural gas production and the fourth largest natural gas market in Europe (with the fourth largest the world's natural gas pipeline system, 142.5 billion cubic meters of natural gas storage capacity in the EU)
The third-largest the world's leading iron exporter
Fourth place in Europe and 13th in the world in terms of the length of its rail network (21,700 km)
Third place in the world in clay exports
Fifth place in the world in titanium exports
Ninth place worldwide for exports of «ore, slag, and ash»
12th largest world's largest steel producer
One of the largest rocket launcher manufacturers around the world
With such advantages, it is easy to see why Russia’s ongoing invasion of Ukraine is not just about irredentism, but also long-term economic interests that Putin likely hopes will offset the costs of a very expensive military campaign, as well as Western sanctions against Russia.
Opinion piece by Sebastián Sechadi in Investment Monitor
