Ukraine is a major east European country that acquired independence in late 1991, in the most difficult of circumstances. Between 1991 and 1994, its economy went into a state of hyper-stagflation - a combination of massive economic decline and an inflation rate that rose to above 10,000 per cent in 1993. Its political and social infrastructure had to emerge against the background of rapidly shrinking living standards and concern about the sustainability of the country itself.

Remarkably, in mid-1994 Ukraine seemed to have established the necessary political basis for a sustained transformation of its social and economic policies. In the coming period, it will be essential for the government, for those agencies providing financial assistance, for the emerging employer and trade union organisations and for others involved in that process to give very high priority to the substantial reform of labour market and social policy.

This report attempts to assess the trends in social and labour market policy currently emerging in Ukraine. It is aimed both at those in Ukraine who have to deal with novel and extremely complex policy challenges, and at all those academics involved in the study of Ukraine's current transition and reform processes.

This report is the responsibility of the ILO's Central and Eastern European Team, based in Budapest. It has been prepared in cooperation with the United Nations Office in Ukraine and many Ukrainian governmental organisations, trade unions and employers' organisations. It was submitted to the tripartite conference 'Reforming Labour and Social Policy in Ukraine' in Kiev in September 1994. Conclusions and recommendations drawn from the conference are presented in this report.