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Ukraine is located in the heart of Eastern Europe, neighbouring Poland, Slovakia, Hungary, Moldova and Romania to the west, Russia to the east, Belarus to the north and the Black Sea to the south. The country is comprised of 24 regions and the Autonomous Republic of Crimea. It has a population of approximately 4847 million people and occupies a land area of 603,700 sq km (which is comparable to the size of France). Approximately one-third of the population lives in large urban centers. The capital city, Kiev, has approximately 3.5 million inhabitants. The official language is Ukrainian, although a majority of the population is bi-lingual, speaking both Ukrainian and Russian fluently.

Ukraine was the center of the first Slavic state, Kievska Rus, which during the 10th and 11th centuries was the largest and most powerful state in Europe. Weakened by internecine quarrels and Mongol invasions, Kievska Rus was incorporated into the Grand Duchy of Lithuania and eventually into the Polish-Lithuanian Commonwealth. The cultural and religious legacy of Kievska Rus laid the foundation for Ukrainian nationalism through subsequent centuries. A new Ukrainian state, the Cossack Hetmanate, was established during the mid-17th century after an uprising against the Poles. Despite continuous Russian pressure, the Hetmanate managed to remain autonomous for well over a century. However, during the latter part of the 18th century, most Ukrainian ethnographic territory was absorbed by the Russian Empire. Following the collapse of czarist Russia in 1917, Ukraine was able to bring about a short-lived period of independence (1917-1920), but was re-conquered and forced to endure a brutal Soviet rule that engineered two artificial famines (1921-22 and 1932-33) in which over 8 million died. Second World War accounted for some 7 to 8 million more deaths. Ukraine proclaimed independence in August 1991. The vote in favour of independence was an overwhelming 90%.

Since independence from the Soviet Union, Ukraine has struggled to shift from a centrally planned economy to a market environment. Ukraine suffered a protracted economic decline during 1991-1999, posting eight consecutive years of negative GDP. In addition, high inflation and unemployment, stifling debt payments, and state interference in the private sector, have contributed to a poor investment climate, further hindering Ukraines economic development. There arewere significant political uncertainties that lead to policy drift and low investment. However, during the last twothree years, Ukraine has implemented significant and dramatic economic and legal reforms leading to positive economic indicators across the board. Foreign investors are starting to take notice as foreign direct investment levels are rising sharply. However, political uncertainty still persists as Ukraine prepares for a landmark presidential election that may result in a historic power shift.The arrival of new President Viktor Yushchenkos reform-minded administration has been a positive message for investors.

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