Ukraine power struggle simmers.

There is a serious power struggle underway in Ukraine. According to a July 5, 2007 article in The Economist (London) there are few ideological differences between the two main political parties. The main differences are defined by the special interests of the constituencies represented by the parties.

The head of the opposition party, which now controls Parliament, has the support of the business establishment. And the current President has the support of consumers. There are geographical considerations but mostly the differences are economic.

According to a July 2, 2007 newsletter distributed by the International Center for Policy Studies (ICPS), an independent think tank based in Kiev, Ukraine's consumers are one of the keys to Ukraine's growth.

In a near term (2007-2009) assessment of Ukraine's economic prospects, the ICPS said, "Private consumption will continue to be the main driver of growth throughout the forecast period." For 2007, the ICPS estimates that private consumption will grow a significant 13.5 percent. For 2008, private consumption will continue double digit growth at 13 percent. And in 2009 private consumption will grow 14 percent.

This important growth factor is based, essentially, on the earning power of the Ukraine's workforce. "Continuing intensive increases in real salaries will be the main factor behind this growth, as they will rise 14-16% per annum."

ICPS adds, "The high consumption rate will also be driven by a high inclination to purchase major household items and expanding consumer credit." The current president is seen as someone who can maintain salaries and pensions. The opposition leader is seen by business as someone who can deliver a corruption free justice system, which will enforce contracts and provide predictable rules for the conduct of business.

Obviously, consumers who spend, and institutions that promote economic efficiency are dependent on one another. Thus, the contending government factions have much more to gain from compromise than they can expect from chaos.

A PRODUCTIVE WORKFORCE AND SOUND INDUSTRIAL BASE WILL PROMOTE GROWTH

The population growth rate for Ukraine is below the regional average, due in part to a birth rate of 9 per thousand inhabitants, which is lower than the average of 10 per thousand for Eastern Europe. Job creation has not kept up with growth of the labor force in recent years, but it is likely that the situation will improve in 2007. Unemployment is running about 6.4 percent, and this continues to sap consumer confidence.

Ukraine's population reached 47-million people mid-2006, which amounted to just under 16 percent of Eastern Europe's 296-million inhabitants. According to data released by the Population Reference Bureau (PRB), Ukraine's population will fall to 42-million by 2025. Also, according to that source, Ukraine is going to have a population of 33-million people in 2050.

The PRB revealed that a substantial 68 percent of Ukraine's population lived in urban areas during 2006, and that the country's population density is a comparatively moderate 201 people per square mile. Another source of demographic data, the CIA's World Factbook, indicates that 14 percent of Ukraine's population was birth to 14 years old in 2006, while 70 percent was 15 to 64 years old, and 16 percent of the populace was 65 years of age and over.

The CIA estimates that the country's population growth rate will be minus 0.675 percent in 2007. According to the United Nations Population Division, in the year 2050, 13 percent of Ukraine's population will be birth to 14 years old, while 49 percent will be aged 15 to 59, and 38 percent of the populace will be 60 years of age and over.