It is this economy that Europe has hoped to tie more closely to the West rather than to Russia.
But some analysts wonder whether the European Union would be taking on a breadbasket, or a basket case, that even the latest offer of $15 billion in EU aid would do little to change.
"Ukraine has unfinished business in terms of making its transition (from the Soviet times) into a healthy, stable and secure democracy," said Ben Tonra, head of the School of Politics and International Relations at University College Dublin in Ireland.
Despite the recent bloodshed in Kiev that resulted in pro-Europe opposition forces toppling President Viktor Yanukovych – who favored closer ties to Russia – it's not yet clear if Europe is willing to extend the lifelines necessary to prevent Ukraine's economic collapse, say analysts.
Still, the World Bank says Ukraine's "tremendous agricultural potential has not been fully exploited due to depressed farm incomes and a lack of modernization within the sector." Analysts say that it's European self-interest that recognizes supporting Ukraine will be mutually beneficial economically in the future.
Even so, the EU's desire for bringing Ukraine closer is about more than economics, say analysts, who note that the bloc wants peaceful, prosperous and stable neighbors.
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"You are talking about Ukraine as a source of raw material, manufacturing goods, agricultural goods – Ukraine is the bread basket of Europe – so increasing trade on both sides increases mutual prosperity on both sides," said Tonra.
Meanwhile, IHS Global Insight analyst Li! lit Gevorgyan estimates that the Ukrainian government has sufficient reserves to keep the economy on life support until the end of March. After that, its options aren't clear.
"Every day the Ukraine inches closer to default," Gevorgyan said. "The government could run out of reserves to pay external debt and meet public sector wages and pensions obligations. An economic crisis is the biggest risk the country is facing compared to any other risk I see."
Protests erupted in Kiev in November after Yanukovych nixed an EU trade agreement and instead accepted a $15 billion financial package from Russia. The decision sparked a backlash that cost him his job. But Russia's offer reflected Ukraine's actual financial needs. Now, the international community is waiting until elections scheduled for May 25 before extending the financial lifeline.
Ironically, even if Yanukovych had accepted the popular EU trade deal, Ukraine's dilemma would be far from solved. The country's deteriorated industrial base isn't really prepared for the European market.
"Ukrainian companies would have to compete with European companies at a higher standard," said Stefan Meister, senior policy fellow at the European Council on Foreign Relations. "It would increase the unemployment rate, as many companies would have to close due to lack of competitiveness."
That's why, from the EU's perspective, the trade agreement was a great deal, especially when southern countries like nearby Greece are desperate for new markets, he added.
"One key thing is that the EU wants the Ukraine to enter the European market because it is the second largest after Russia in the post-Soviet region," said Meister, of the 46 million-strong population.
Today, Ukraine exports steel, machinery, chemicals and agricultural goods — especially wheat grown in the country's exceptionally fertile black soil, said Vitaliy Kravchuk, senior research fellow at the Institute for Economic Research and Policy Consulting in Kiev. There's! also a b! udding information technology sector.
"We can increase our exports to the EU and on the other had the EU can increase ties, investment and make money in Ukraine," Kravchuk said.
But the country's mainstay corporations are holdovers from the Soviet era that were seized by criminal elements in the chaotic transition to independence in the 1990s, added Kravchuk.
Established to produce equipment for the Soviet Union's massive oil and mining industries, those businesses haven't adapted to globalization. Their profits have paid for townhouses in London, beachfront property in Cyprus and hefty offshore bank accounts.
"There are oligarchs who control significant parts of the large companies," he said.
Yet many of those oligarchs are in favor of moving closer to Europe because they fear Russian influence. For them, it would be a nightmare scenario if Russia annexed eastern Ukraine, where much of the Soviet-era industry they plundered is located. Their political leanings are far from altruistic, however.
"They clearly understand that if a split were to hypothetically happen, their Russian oligarch neighbors would gobble up their wealth," said Vitaly Chernetsky, a University of Kansas professor and president of the American Association for Ukrainian Studies. "Ukraine being an independent state and not splintering is a guarantee for them."
At the same time, the oligarchs and endemic corruption they foster are major reasons why the EU won't likely welcome Ukraine with open arms into the bloc anytime soon.
The most recent Eastern European nations to join — Bulgaria and Romania — took years to implement the economic, political and judicial reforms required by Brussels before they joined the union. Critics say Bulgaria and Romania's reforms still haven't borne fruit, and they are a fraction of the size of Ukraine.
"There is no real interest from a number of (EU) member states to give Ukraine membership," said Meister. "They see the problems coming because it is ! a very co! rrupted, under-developed country with a huge number of inhabitants, and it would be very problematic for the EU," he said.
Wagons filled with coals are parked on railroad tracks near a steel factory in Donetsk, eastern Ukraine.(Photo: Darko Bandic, AP)
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