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4 Reasons Why Ukraine Is Appealing to Putin

4 Reasons Why Ukraine Is Appealing to Putin

April 19, 2022
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The Ukrainian economy is a significant global player, more so than some might imagine. Its value, all too clear to Vladimir Putin, underlines Russia’s unfolding invasion of Ukraine.

Russia's invasion of Ukraine in February 2022 may be considered a political campaign move by some but likely is more of an economic undertaking for Putin. As we watch this war unfolding from the other side of the world, the riches of the Ukrainian economy may be what's most important to Russia. Here are some of the reasons why taking Ukraine is appealing to Putin:


#1. Natural resources and mineral deposits- Ukraine covers just 0.4% of the Earth’s surface and has 0.8% of the world’s population but has about 5% of the world’s mineral resources. More than 20,000 deposits of 200 different minerals are inside Ukraine's borders. Of the 94 types of minerals, most are of industrial importance. Ukraine is one of the leading countries in the reserves and extraction of iron, manganese, titanium-zirconium ores, and non-metallic raw materials.


Ukraine also has reserves of coal, oil and natural gas, iron and manganese ores, native sulfur, rock and potassium salts, non-metallic building materials, and mineral waters which are of great economic importance:


Ukraine's natural resources ranking

  • First in Europe in proven recoverable reserves of uranium ores
  • Second place in Europe and tenth place in the world in terms of titanium ore reserves
  • Second place in the world in terms of explored reserves of manganese ores (2.3 billion tonnes, or 12% of the world’s reserves)
  • Second-largest iron ore reserves in the world (30 billion tonnes)
  • Second place in Europe in terms of mercury ore reserves
  • Third place in Europe (13th place in the world) in shale gas reserves (22 trillion cubic metres)
  • Eighth place in the world in coal reserves (33.9 billion tonnes)

    Source- InvestmentMonitor


#2. Technology- Many Ukrainians are employed in outsourcing for the world's big tech companies. In 2021, Ukraine exported $6.8 billion (USD) worth of technology services to the world. Many American tech companies, including Facebook, Snap, Lyft, Microsoft, Google, and Cisco, have employees in Ukraine. Compared to other European countries, international companies turn to Ukraine for its educated workforce, especially its engineering and computer science workforce, and low wages.


#3. Foreign investors bringing money- Over the past thirty years, foreign investors have opened companies in Ukraine, with German auto companies the most prominent investors. Ukraine is an essential part of the EU's auto supply chain. U.S., German, and UK investors are critical investing players in Ukraine. In 2019-2020, one in five investments in Ukraine was from a US-based company.


#4. Agriculture, energy, industry- Ukraine is a world leader in agriculture, with grains as one of its leading exports. Ukraine has also invested in nuclear power and captures natural gas as oil is pumped from its vast oil reserves, a process other countries have not maximized to their benefit. Here is how Ukraine ranks in agriculture, energy, and industry compared to the rest of the world:

Ukraine's agriculture ranking

  • First in Europe in terms of arable land area
  • First place in the world in exports of sunflowers and sunflower oil
  • Third place in the world in black soil (25% of the world’s volume)
  • Third-largest producer of potatoes in the world
  • Fourth place in the world in barley production and fourth place in barley exports
  • Fourth-largest rye producer in the world 
  • Fifth-largest producer and fourth-largest exporter of corn in the world
  • Fifth place in the world in honey production (75,000 tonnes)
  • Fifth place in the world in wheat exports
    Source-InvestmentMonitor


Ukraine's industry ranking

  • Second-largest in Europe and seventh-largest in the world in terms of installed capacity of nuclear power plants
  • Third-largest gas production and the fourth-largest gas market in Europe (with the fourth-largest natural gas pipeline system in the world, supplying 142.5 billion cubic metres of gas throughput capacity in the EU)
  • Third-largest iron exporter in the world
  • Fourth place in Europe and 13th in the world in terms of rail network length (21,700km)
  • Third place in the world in clay exports
  • Fifth place in the world in titanium exports
  • Ninth place in the world for exports of ‘ores, slag and ash’
  • 12th-largest steel producer in the world
  • One of the world’s largest manufacturers of rocket launchers

    Source-InvestmentMonitor´╗┐

Ukraine's broad industry sectors are significant in economic value, reflected in the world markets as all eyes are on Putin and Zelenskyy to see what happens next.