GENERAL INFORMATION

The Chernivtsi region is situated in the northwest of Ukraine on the foothills of the Carpathians along the Dniester and Prut rivers. It was formed on August 7, 1940 as a result of reunification of the northern part of Bukovyna and the Khotyn district of Bessarabia.

The region borders on the Ivano-Frankivsk, Ternopil, Khmelnytskyi and Vinnytsia regions of Ukraine. In the north and east there is a state frontier with Moldova and Romania.

The region covers the area of 8,100 sq. km, which makes 1.3% of the territory of Ukraine. Its population is 935.4 million people. The major part of the population (57.3%) is rural.

The region is divided into 11 administrative districts. It includes 11 towns, 8 townships, and 398 villages. The regional center is the city of Chernivtsi, which covers the territory of about 15,300 hectares on both banks of the Prut river and has the population of 258,200 people.

The Chernivtsi region occupies an advantageous geographic and transport position, has a developed network of railways, motor roads, pipelines and power transmission lines. The regional center has convenient railway connection with European capitals: Bucharest, Sofia, Belgrade and Moscow.

NATURAL AND MINERAL RESOURCES

The land reserve of the region is 809,600 hectares, including 475,000 hectares of agricultural lands, composed of 340,400 hectares of arable land, 25,900 hectares of perennials, 39,100 hectares of hayfields, 69,600 hectares of pastures. The most fertile soils are in the forest-steppe zone. In this part of the region, mostly on the Dniester terraces, chernozem (black soil) with crumb-granular structure and humus content of up to 7 % is encountered. Because of the hilly landscape, agricultural lands occupy 59% of the total area of the region, while the share of plowed fields is 42%.

Water resources include surface and underground water. Owing to the local and transit surface waters, water supply per 1 inhabitant is 5 times more in the region than on average in Ukraine.

The region is rich in natural resources. Four oil and gas deposits (Lopushne, Chornohuzy, Krasnoilsk, and Sheremetiv) have been found on the Bukovyna territory. More that ten oil-gas-promising areas have been recently discovered in the Vyzhnytsya, Storozhynets and Putyla districts).

There are a lot of precious building materials in the region bowels. Large deposits of gypsum and anhydride have been discovered in the Dniester area and the Prut basin. The northern and eastern districts of the region are rich in marls and limestone. Near the village of Krasnoilsk there is a perspective marble deposit.

Loam excavated in the Vyzhnytsya district is used in brick-tile and pottery industries. The red-brown and gray sandstone is used for road construction and wall facing. Various types of sand are extracted in Zastavna district.

On the region’s territory there are also deposits of quartzite, schist, as well as sources with mineral water of "Izhevska", "Matsesta", "Borgiomy" and "Naftusia" types.

The Chernivtsi region landscape is mainly formed by mountains, lakes and rivers. According to the landscape peculiarities, the region is divided into three parts: plains, foothills and mountains. The northern plains are situated on the Prut-Dniester interfluve within the Podillia and Khotyn Hills. The surface is cut by picturesque canyon-type river valleys and ravines. In the middle part of the foothills the Chernivtsi Hills are situated (the maximum height is 537 meters). About 25 % of the territory is covered with the Pocuttia and Bukovyna Carpathians.

The geological and geomorphologic formations in the Northern Bukovyna have an outstanding educational and aesthetic significance. The Dovbush Cavern, the rocks "Kam’yana Bahachka" and "Chorniy Dil", the Dniester "walls" near the villages of Vasyliv and Zveniachyn can be distinguished. The Bukovyna Carpathians are offer favorable conditions for development of mountain climbing, mountain hiking and sports qualification tourism. Unique gypsum caves "Popeliushka", "Bukovynka-1" and "Bukovynka-2" are available for speleological tourism.

On the territory of the region there over 70 rivers, each of them over 10 km long. They belong to the Danube and Dniester basins. The river system of the region is formed with the Dniester, Prut, Siret and Cheremosh rivers.

Forests, which are the source of wood and non-wood plant products, are of great importance for economic and social development of the region. The total area covered by the forests is 258,000 hectares. The forests are formed with various tree species such as spruce, beech, oak, ash and birch. The average age of the stands is 60 years.

The fauna of the Northern Bukovyna is represented with extremely interesting animals of over 300 species.

The mineral resources of the Chernivtsi region include mineral water sources and medicinal mud formations. The geological structure and tectonic conditions (especially in the southern part) have caused the appearance of virtually inexhaustible reserves of mineral waters of various chemical composition used for treatment of numerous diseases. There are over 60 mineral water sources in the region.

Industrial bottling of potable and medicinal water from 15 sources ("Bukovynska", "Brusnytska", "Kelmetchanka", "Khreschatyk", etc.) is performed. Water from the Brusnytske source containing sulphur-hydrogen and soda hydrocarbinate-chloride-sodium components which determine its medicinal properties is particularly popular.

Availability of natural recreational resources per 1 sq. km and per 1 inhabitant exceeds by 1.4 and 1.8 times respectively the average level throughout Ukraine.

INDUSTRY

By the industrial production structure, the region belongs to the industrial-agrarian category. The share of the region in the gross industrial and agricultural output of Ukraine is about 0.5% and 1.9% respectively.

The general economic structure of the region has been significantly influenced by changes in the development of certain industries.

The leading industries of the region remain and include the food-processing (30.2% in the gross production volume of the region), power engineering (18.4%), machine-building and metal treatment (16.3%), forest and woodworking (13.9%), and light (10.5%) industries.

Concentration of the industry in towns is characteristic of the region. Industrial enterprises situated in Chernivtsi account for more than 64.5% of the industrial output.

The leading direction in the machine-building industry is production of oil and gas processing equipment; in the forest and woodworking industry - production of saw-timber, veneer, and furniture; in the constructing materials industry - production of bricks, roofing felt, ceramics, and ferroconcrete items; in the light industry - production of ready-made garments and knitwear, cotton fabrics; in the food industry - production of sugar, bakery products, spirits, oil, meat, milk, fruit and vegetable canned products.

There remains a positive tendency in the oblast toward increasing the volumes of industrial output. During the first three months of the current year the industrial enterprises produced goods for over UAH 135,500,000, which is 10.1% more against the first three months last year.

The production output of enterprises of the city of Chernivtsi and of 8 out of 11 rayons of the oblast during the first three months of this year exceeded the output of the corresponding period of 1999.

Joint-Stock Company "Trembita", "Mashzavod, LTD", Joint Venture "Konftrem", Open Joint-Stock Company "Rosy Bukovyny", "Chernivtsi Furniture Factory" and some other enterprises made a considerable contribution to increasing the volumes of output.

The output during the first three months of this year has exceeded the output of the corresponding period last year by 81.4% in ferrous metallurgy, by 21.6% in machine-building and metal working, by 20% in construction materials industry, by 18.6% in woodworking industry, by 13.5% in light industry, while the enterprises of flour-and-cereals industry and feed mill industry failed to reach the output they had in the first three months of 1999 (-54,2%).

The output of consumer goods increased by 6.8% over the corresponding period of 1999.

The production has grown of meat, sausages, canned goods, mineral water, soft drinks, fabrics, knitted goods and legwear, footwear, and furniture.

This year, there is a positive tendency toward prevailing of the volumes of goods shipped over those produced. For instance, in January-February 2000, the volume of shipped goods was UAH 67,5 million, which is 103.1% of the goods produced, including the socially-oriented sectors, namely in the food industry – 109.1%, light industry – 125% (in 1999 the volumes of goods sold were 96.2% of those produced, 91.7% in the food industry and 139.5% in the light industry, in particular).

The level of barter transactions in January and February 2000 amounted to 18.2%, which is 13.9% under the respective period last year. The barter share decrease occurred in almost every main industrial sector but for the chemical, petrochemical industries and that of construction materials.

In January and February 2000, the revenues from sales totaled UAH 45,900.000 (68.0% of the total volume); therefore, the sales have increased by 17% over the respective period last year. In chemical and petrochemical engineering 99.9% sales were made in cash, in ferrous metallurgy – 96.1%, in meat-processing and clothing industries – 95.3 - 92.8%.

At present, the Ukrainian Center for Enterprises Restructuring and Private Sector Development is operating in Chernivtsi oblast under the project of the World Bank for restructuring enterprises, namely, JSC "Quartz", "Nadiya", "Malva". The project envisages diagnostic analysis of enterprises, plans of restructuring, introducing short-term measures for company restructuring and establishing an infrastructure for rendering advisory assistance in Ukraine.

In conformity with the conditions of the project implementation, by December 25, 1999, the diagnostic analysis development at the aforementioned enterprises was completed. Following discussions at the enterprises, the plans of restructuring were developed. On February 25, 2000, they were presented, and the plans are currently discussed at the stockholders’ meetings. The main effort will be directed to implementing the measures for providing companies with cash funds, via using the companies’ internal funds identified in the process of economical activity analysis. The most attention will be paid to training the leaders to work in market conditions and to use marketing and management principles. It is planned to have 5 leaders take special courses on foreign languages and business management fundamentals.

AGRICULTURE

630 farms own and use 4243,5 hectares of agricultural land, including 3587,3 hectares of arable land. In average, it is 6.7 hectares of land per farm, including 5.7 hectares of arable land.

The division of land into shares and establishment of collective ownership for the land have been completed in the oblast, thus making 180,400 citizens the owners of shares. In order to enable the citizens exercise their will to run their own agricultural production 213 schemes of collectively-owned lands have been developed, which makes 86% of the total number of collective agricultural enterprises. In the process of formation 58 agricultural cooperatives have been established, 190 companies with limited liability, 48 private and lease enterprises, and 13 farms.

Over the first three months of this year, local agricultural enterprises of all property types produced 12,100 tons of meat, 54,100 tons of milk, and 50,900,000 eggs. Against the respective period last year, the meat production has grown by 7.1%, and in new formation enterprises by 16%. Over this period, purchases of milk by the state from the farmers have grown by 22 tons (2.6%).

ACTIVITY OF LOCAL BUSINESSES

Since the beginning of the year, construction and repair companies have performed work in contract for the total sum of UAH 9.4 million, which is 28.2% of the planned amounts. The works performed by building and assembly companies have amounted to UAH 8.0 million, while those done by repair services amounted to 1.4 million.

19,300 sq. m. of housing facilities, an automatic telephone exchange servicing 2000 numbers, and gas pipelines 0.5 km long have been put into operation in the oblast.

Over the first three months of 2000, motor enterprises of all property types have transported 42,300 tons of various cargoes. Since the beginning of the year, 5.8 million people have used the public conveyance services, which is 27.1% greater than over the respective period last year. 99.7% out of the total amount of transportation are route conveyances by all types of transport.

Over January-March, 2000, the retail goods turnover of all officially registered enterprises of all property types, including public catering, has grown against the respective period last year by 33.1% in current prices (by 8.9% in comparative prices) and came up to UAH 93.5 million.

The share of the public sector in the total retail goods turnover is 9.6%, while that of the collective sector makes 79.1%, and that of the private sector is 11.2% (in 1998, 10.6%, 77.1%, and 12.2% respectively).

To implement the state policy for small and medium enterprise development, the integrated Program for Small and Medium Business Support within 1999-2000 was developed and is being implemented in the region. 11 non-governmental organizations and unions for rendering support to private entrepreneurs and businesses were established and registered in Chernivtsi. A "Business Center" is operating which was opened through support rendered by the IFC. Bukovyna Small Business Center established through support rendered by the government of the Canadian province of Saskachevan, offers educational programs for the youth and businesspeople, provides legal advisory services and office services.

As of April 1, 2000, 8,700 businesses (legal entities) were registered, among which there are 740 private businesses, 2,300 small businesses, 530 collective enterprises, 1,600 and about 300 enterprises working in partnership with foreign companies. In addition, over 32,000 individual entrepreneurs were registered.

In order to move goods produced in the oblast to Western markets and attract foreign investment an agreement was entered into with a German company "LuNo Business-Centre" and the municipal government of the town of Zelle (the province of Lower Saxony) for opening a Chernivtsi oblast representation in Germany.

A Web page was created containing information about the oblast’s natural and resource potential and investment proposals of the oblast’s enterprises.

In order to coordinate effort to create a favorable climate for attracting foreign tourists and further developing the travel industry, a non-governmental association "The Village Green Tourism of Bukovyna" was created. On April 5-8, travel companies of Chernivtsi took part in the Sixth International Exhibition "Ukraine: Tourism and Recreation".

FOREIGN ECONOMIC ACTIVITY

This year positive changes have occurred in export and import activities. 109 companies were involved in the export and 68 companies in the import transactions. The volume of foreign trade operations over January-February came up to USD 13.4 million, including USD 8.1 million in exports and USD 5.3 million in imports. The net positive balance was USD 2.8 million. These figures have considerably increased against the corresponding period last year (the total goods turnover has grown by 10.3%, including 17.2% in exports and 1.2% in imports).

Export and import transactions of the oblast’s businesses with foreign countries beyond NIS are prevailing in foreign economic relations. The foreign trade income amounted to USD 12.7 mln (89.6% of the total goods turnover), and it has grown by 12.7% against the respective period last year. The exports amounted to USD 7.1 million (87.2% of the total exports), while imports amounted to USD 4.9 million (93.4% of the total imports); these figures are respectively 20.0% and 3.7% greater against the corresponding period last year. Since 1999, the net balance of trade with these countries was positive. Over two months of the current year, the balance came up to USD 2.2 million, which is almost twice as much as it was over the corresponding period last year. This demonstrates the growth of quality and competitive ability of local products in foreign markets.

The amount of goods exported on barter conditions was 0.4 ?? under that of the corresponding period last year and made 2.1%.

BUDGET

Over the first three months of 2000, the consolidated budgetary revenues made UAH 51.0 million. During the accounting period, the receipts of the consolidated budget were secured in a pecuniary form exclusively, with the revenues having increased against the corresponding period last year by UAH 17.6 million, or 53%, in the oblast at large.

In correspondence with the Law of Ukraine "On the State Budget of 2000", UAH 31,0 million were mobilized to the State Budget over the period from January through March, 2000. The revenues from tax and other payments to the budget were UAH 11.7 million, which is 61% greater against the corresponding period last year.

The local budgets revenues came up to UAH 20.0 million, or 101.7% of the planned amount.

In order to strengthen the revenue base of the local budgets, complete and timely receipts of various taxes and duties were ensured. All the 269 local self-governance agencies introduced local taxes and duties at their territories. Over the first three months of 2000, the revenues from these taxes and duties amounted to UAH 2,266 million, which is 19.1% greater than over the corresponding period last year.

SCIENTIFIC POTENTIAL

The region has a considerable scientific potential. The following research institutes operate here: the Institute of Thermal Electricity of the National Academy of Sciences of Ukraine, the Chernivtsi Department of the World Economy and International Relations Institute of the National Academy of Sciences of Ukraine, the Materials Science Institute of the National Academy of Sciences of Ukraine, the Chernivtsi Branches of the Institute of Land Use Management and the Kyiv Institute of Automatics.

Higher education is provided by the Chernivtsi University named after Fedkovych, the Bukovyna Medical Academy, the Chernivtsi Branch of the Kyiv Trade and Economy University, the Bukovyna Finance and Economy Institute, and the Chernivtsi Branch of the Kharkiv State Polytechnic University having altogether 18,300 students.

RECREATIONAL RESOURCES

In the Chernivtsi region there are 243 nature reserve territories and objects, including 7 sanctuaries, 8 remarkable sights of nature, a botanical and dendrological park of the Chernivtsi State University, Vyzhnytsia National Park of Nature and Storozhynets dendrological garden. All of them are of the national importance and have been included into the transnational environmental network of the Carpathians (TACIS project). Besides, there are 136 more sights of nature, 40 parks (which are masterpieces of gardening and park-keeping) and 39 local reserve tracts. Among the sanctuaries of the national importance there are landscape sanctuaries in Luzhky, Stebnyck and Tsetsyno, an ornithological sanctuary Darnytsky, forest sanctuaries Lunkivsky and Petrovetsky. The tract Bilka, caves Bukovynka, Popeliushka and Balamutivska, Shyliv Forest, Tysovy Ravine are among the sights of nature of the national importance.

The group of archaeological and architectural sights includes sites of ancient Slavic settlements of IX-X centuries, Rus settlements of XII-XIII centuries, cult architecture samples.

The Bukovyna is famous for its artistic crafts such as carpet weaving, embroidery, and wood carving. They are particularly developed in central, northwest and western parts of the Chernivtsi region.

The Chernivtsi region is a favorable area for versatile summer and winter mountain sports tourism, mass educational and health improvement recreation, as well as balneological treatment.