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State of economy in the Dnipro Basin
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3.2.3 State of economy in the Dnipro Basin
The Dnipro Basin is a complex river system of high economic value, sustaining a large multi-sectoral economy that relies heavily on, and impacts the environment and water resources of the Basin.
Several factors have shaped the economic development of the Dnipro Basin with the Basin geography playing a major role. Urban areas have historically developed along the main stem of the Dnipro River where the regional industrial centres have been concentrated. In the main these have been represented by heavy chemical, metallurgical and agro-industries which have posed a continuous threat of environmental pollution.
Land resource in the Basin has been extensively used for large-scale agricultural development schemes. This has included extensive conversion of land to agriculture regardless of its fertility, ploughing-up areas with unsuitable soils, large-scale land drainage and irrigation schemes, and construction of major livestock breeding industries. Again, all have contributed to environmental degradation of the Dnipro Basin.
The economy of the Belorussian part of the Dnipro Basin is a fairly typical reflection of the national economic pattern of Belarus, dominated by a centralised command-and-control management approach. In 1995-2000, government interventions into the national economy continued through price control, exchange rate regulation, trade limitations, trade quotas and subsidies. In 2000 (Figure 3.6), pre-crisis 1990 levels were restored in some sectors (industry and consumer growth) but remain stagnant in others (Agricultural production, equity investment). The private sector has grown significantly. Between 1996-2000, 404 state-owned and 1773 municipality-owned companies were privatised.
Figure 3.6 Belorussian economic recovery showing 2000 levels versus 1990 levels (% change). Dotted line indicates pre-crisis 1990 levels.
The GRP (gross regional product) structure in Belarus is dominated by the manufacturing sector (up to 67%). The contribution of agriculture to the regional GRP varies between 15 and 21%. There has been continuous growth of the service sector in terms of regional GRP between 1995 and 2000.
The Ukrainian part of the Dnipro Basin has a very specific economic pattern that is not typical for the country as a whole. The region is by far and away the largest manufacturer of goods and products. For example, in 1995 the proportion of the manufacturing sector in the regional economy was 59%, when compared to the country average of 54%. This is largely attributed to higher levels of industrial and agricultural sector development in the region as compared to the country average. In 1995, industry represented 32% of the country's economy (36% in the region's economy), the agricultural sector 14% (16%), and the construction industry sector 6.9% (7.3% in the region's economy).
Large power engineering and electricity generating facilities are concentrated in the region, contributing significantly to the anthropogenic load on the environment and posing a continuous threat of accidental pollution. 69% of the national power generating capacity is concentrated in five Oblasts located within the Dnipro Basin.
Although production output has shown an increase in recent years (2000-2001), overall decline during the preceding period of 1995-2000 was dramatic. Gross production output dropped by 15.9%, interlocutory consumption by 14.3% and gross value-added output by 17.3%.
Certain signs of growth have started to manifest themselves since 2000 which can be attributed to a revival of industrial production. This has largely been caused by increases in demand for the products of the building material industry, food processing industries, light industries, and ferrous metallurgical and petrochemical industries.
