Introduction

These days Ukraine is experiencing serious unrest in both economical and social
aspects. This paper concentrates mainly on comprehensive analysis of several
economic factors between Ukraine and Romania. Romania was chosen as a
subject of comparison due to its relative similarity to Ukraine sharing same
middle-class income group. Also, both countries were part of Soviet Union and
are neighbouring each other.
Research
Figure 1. External debt stock (total (current US$); % of GNI; % of exports of goods,
services and primary income)

Chart Title
10000000000
9000000000
8000000000
7000000000
6000000000
5000000000
4000000000
3000000000
2000000000
1000000000
0
4] 6] 8] 0] 2] 4] 6] 8] 0] 2] 4] 6] 8]
199 199 199 200 200 200 200 200 201 201 201 201 201
R R R R R R R R R R R R R
[Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y
94 96 98 00 02 04 06 08 10 12 14 16 18
19 19 19 20 20 20 20 20 20 20 20 20 20

Ukraine Romania

It is evident that external debt of both countries was relatively insignificant from
1994 to 1998. From 1999 UA debt leapt several times higher but then steadily
decreased to third of its size by 2013 while ROU experienced rapid climb and hit
its ceiling surpassing UA’s debt by 10 times. By 2017 both are almost at similar
point of half of 2013 ROU’s debt.
 Figure 2. Total debt service

Chart Title
60
50
40
30
20
10
0
4] 6] 8] 0] 2] 4] 6] 8] 0] 2] 4] 6] 8]
199 199 199 200 200 200 200 200 201 201 201 201 201
R R R R R R R R R R R R R
[Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y
94 9 6 9 8 0 0 0 2 0 4 0 6 0 8 1 0 1 2 1 4 1 6 1 8
19 19 19 20 20 20 20 20 20 20 20 20 20

Ukraine Romania

Both countries have quite fluctuating debt service history peaking at different
points of time due to the difference of ability to pay and the respectable size of
their debts.
Figure 3. Foreign direct investments (net inflows)

Chart Title
10
9
8
7
6
5
4
3
2
1
0
] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ]
994 995 996 997 998 999 000 001 002 003 004 005 006 007 008 009 010 011 012 013 014 015 016 017
R1 R1 R1 R1 R1 R1 R2 R2 R2 R2 R2 R2 R2 R2 R2 R2 R2 R2 R2 R2 R2 R2 R2 R2
[Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y
9 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
4
19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

UKR ROU

The flow of investments to both countries peaks around the period between 2004
and 2006 due to the most stable economic situation for the respective countries.
However, they inevitably decline after economic recession of 2008 and don’t
recover to their past numbers.
 Figure 4. IBRD loans and IDA credits

Chart Title
6000000000
5000000000
4000000000
3000000000
2000000000
1000000000
0
4] 6] 8] 0] 2] 4] 6] 8] 0] 2] 4] 6]
199 199 199 200 200 200 200 200 201 201 201 201
R R R R R R R R R R R R
[Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y
94 9 6 9 8 0 0 0 2 0 4 0 6 0 8 1 0 1 2 1 4 1 6
19 19 19 20 20 20 20 20 20 20 20 20

UKR ROU

Steady increase in loans can be detected which points to the increase in the
development of ROU and UA. It should be noted than Ukraine was leading in that
aspect for solid four years from 2014 to 2017.
Figure 5. Use of IMF credit

Chart Title
20000000000
18000000000
16000000000
14000000000
12000000000
10000000000
8000000000
6000000000
4000000000
2000000000
0
4] 6] 8] 0] 2] 4] 6] 8] 0] 2] 4] 6]
199 199 199 200 200 200 200 200 201 201 201 201
R R R R R R R R R R R R
[Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y
94 9 6 9 8 0 0 0 2 0 4 0 6 0 8 1 0 1 2 1 4 1 6
19 19 19 20 20 20 20 20 20 20 20 20

UKR ROU

The graph depicts staggering difference in the usage of IMF credit between UA
and ROU. It seem that Romania mostly avoided or didn’t need, however, as an
exception from 2009 to 2013 when the usage of it even surpassed Ukrainian.
Although Romania was in the lead on that one Ukraine has overtaken it in 2014
and remains higher by 2017.
 Figure 6. Personal remittances

Chart Title
2000000000
1800000000
1600000000
1400000000
1200000000
1000000000
800000000
600000000
400000000
200000000
0
4] 6] 8] 0] 2] 4] 6] 8] 0] 2] 4] 6]
199 199 199 200 200 200 200 200 201 201 201 201
R R R R R R R R R R R R
[Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y [Y
94 9 6 9 8 0 0 0 2 0 4 0 6 0 8 1 0 1 2 1 4 1 6
19 19 19 20 20 20 20 20 20 20 20 20

UKR ROU

Sum of personal remittances is steadily rose in UA up to 2013 and 2014 when it

peaked while ROU’s numbers were at all time significantly lower, this tendency
can be explained by large amount of Ukrainian man power working in foreign
states. Romanian workforce, on the other hand, opted to work in native
environment.

Conclusion
All in all, Romania and Ukraine are quite similar, however, in certain aspects we
are behind Romania due to our ever-growing debt or inability of entice people to
work inside the country. Even though recent years were more successful it
doesn’t mean the situation will get better, the economic state might worsen after
the elections. We need even more foreign investors and less international loans.
 MINISTRY OF EDUCATION AND SCIENCE OF UKRAINE

IVAN FRANKO NATIONAL UNIVERSITY OF LVIV

Department of International Economic Analysis and Finance

Individual research on topic:

«Comparative analysis of external debt of

Romania and Ukraine»

Done by:

Sviderska K. O. MVP-14

Checked by:

docent Tsapko-Piddubna O. I.

Lviv, 2019