When 2066 Americans were asked where Ukraine is located, as the dots on the following map show, the replies were rather scattered. While 16% of the respondents knew their geography, the rest were off by an average of 1800 miles.
The redder the dot, the more accurate the response about where Ukraine is located:
Ukraine’s location makes it the perfect gas conduit between Russia and Europe. Tracing the black arrows from Russia, across Ukraine and then into Europe, you can follow the trajectory of Russian gas pipelines.
And you can see that the quantity of gas that Russian exports to Ukraine and Europe is significant.
One problem with Ukrainian consumption of Russian gas is subsidies. A payment from government to consumers, Ukrainian natural gas subsidies have created unproductive incentives. Encouraging households to consume more, they diminish efficiency. Meanwhile, whenever Russia has increased gas prices, the gap for the Ukrainian government between what they pay and what they charge widens. Here is some gas price and subsidy history:
And finally, do be sure to call Ukraine, Ukraine. “’Ukraine is a country,’ says William Taylor, who served as the U.S. ambassador to Ukraine from 2006 to 2009. “’The Ukraine is the way the Russians referred to that part of the country during Soviet times … Now that it is a country, a nation, and a recognized state, it is just Ukraine. And it is incorrect to refer to the Ukraine, even though a lot of people do it.’” (Time)
Our bottom line? Today we just wanted to share some Ukraine facts that provide some economic insight. Please do add to our short list with your comments.
Sources and Resources: You might want to look at The Washington Post, Business Insider and this IMF working paper to read the articles that accompanied our maps and graphs. Also, this US energy agency has one page on Ukrainian energy that was chock full of facts.