The Long 1990s: How Ukraine Navigated Independence, Oligarchy and Instability

When the Soviet Union collapsed in 1991, Ukraine emerged as an independent state — suddenly, dramatically, and with little preparation. It inherited not only vast natural resources and a powerful industrial base, but also a crumbling command economy, entrenched Soviet bureaucracies, and fragile national institutions. What followed over the next decade — and in truth, for well beyond — was not a transition neatly contained within the calendar, but what historians now call Ukraine’s “Long 1990s”: an extended period of political turbulence, economic freefall, social transformation, and the rise of oligarchic power.

This era did not conclude neatly with the arrival of the 21st century. Its legacies — both burdensome and formative — continue to shape Ukraine’s political architecture, her popular consciousness and her struggle for genuine democratic sovereignty.

A State is Born

Ukraine’s independence referendum on 1 December 1991 was decisive: over 90% of voters endorsed independence, with even majority support in Russian-speaking regions such as Donetsk and Crimea. The new country inherited the second-largest population and economy of the former USSR, a significant military-industrial complex, and the third-largest nuclear arsenal in the world.

But she also inherited crippling structural weaknesses: a centrally planned economy in collapse, no independent financial institutions, massive inflation, and administrative chaos. Statehood came not with a revolution but a vacuum — and into that vacuum poured a generation of political entrepreneurs, former Soviet functionaries, and emerging oligarchs.

Economic Collapse and the Birth of Oligarchy

Between 1991 and 1999, Ukraine’s GDP contracted by more than 60% — a worse economic performance than during the Great Depression or World War II. Hyperinflation reached over 10,000% in 1993. Pensioners lost their life savings. Industrial output plunged. And barter trade often replaced money as the basic medium of exchange.

In this collapse, a small group of politically connected businessmen consolidated control over state assets: steelworks, coal mines, media outlets and banks. This was the era of “nomenklatura privatisation”, where former Communist Party insiders traded favours for ownership. The oligarchs who emerged — including figures like Rinat Akhmetov, Ihor Kolomoisky and Viktor Pinchuk — did not merely own businesses; they acquired influence over parliament, regional governors and entire ministries.

These men were not simply rich. They became structural fixtures of Ukraine’s political system — gatekeepers, sponsors, and sometimes puppet-masters. By the late 1990s, politics and business were no longer separate spheres; they were one and the same.

Constitutional Drift and Presidential Power

Leonid Kravchuk, Ukraine’s first president (1991–1994), struggled to assert control amidst economic collapse and parliamentary resistance. His successor, Leonid Kuchma, elected in 1994, took a more assertive approach. A former director of the Dnipropetrovsk missile factory, Kuchma understood both industrial power and the Soviet-style command structure. He sought to centralise the Presidency and stabilise the economy — often through informal alliances with emerging oligarchs.

Under Kuchma, Ukraine adopted a new constitution in 1996, introduced the Hryvnia as its national currency, and saw modest recovery in the late 1990s. But political life remained deeply informal, shaped by deals, clans, and kompromat (compromising material). The executive branch expanded, and opposition voices — especially in the press — faced growing pressure. In 2000, the murder of journalist Georgiy Gongadze and the release of secret recordings allegedly implicating Kuchma triggered mass protests and a crisis of legitimacy.

The seeds of the Orange Revolution were planted in the soil of the long 1990s.

Identity, Language and Regional Division

While the state grappled with economic and institutional survival, Ukraine’s identity project unfolded in parallel — and often contentiously. The 1990s witnessed a struggle over national language, history, and orientation.

Western Ukraine pushed for rapid Ukrainianisation of schools, media, and public life. In contrast, eastern and southern regions — heavily Russified and economically tied to Soviet-era industries — resisted. Debates over NATO, EU alignment and relations with Russia were already present, if subdued. The political class, wary of alienating voters or Moscow, often vacillated.

Still, important gains were made: the Ukrainian language was institutionalised in public life; historical research on the Holodomor and the Soviet legacy flourished; and new civil society groups — often under-resourced, but tenacious — began to take root.

A Society in Flux

Behind the headlines of politics and economics, Ukrainian society in the 1990s was undergoing massive transformation. Millions emigrated temporarily or permanently — to Poland, Russia, Canada, and beyond — seeking work. Women entered informal and precarious labour markets in large numbers. Corruption and informal payments became daily facts of life — in schools, hospitals and local government.

Yet there was also adaptation and creativity: new media outlets emerged, Kyiv’s arts and literature scene flourished, and a generation of Ukrainians grew up with unprecedented exposure to Western culture, ideas, and technology.

Even in hardship a civic spirit endured. The idea of Ukraine — fragile, uneven, often betrayed — was not abandoned.

Conclusion: Legacies That Endure

The long 1990s did not end in 1999. Their legacies — oligarchic capitalism, political informality and regional identity divisions — have echoed through every crisis since: the Orange Revolution (2004), the Euromaidan (2013–14), and the full-scale war with Russia (2022–).

But so too have their foundations of resilience, pluralism and national evolution. The state that could barely pay salaries in 1995 is now, in 2025, a hardened wartime republic integrating with NATO systems and building a digital democracy under fire.

Ukraine did not emerge from the 1990s fully formed. But she endured. And that endurance may be her most powerful inheritance.