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16.03.2011

Ukrainians uninterrupted descent into poverty

   

Neither the former government’s activities nor the current government’s reforms have proved sufficient to stem the nation’s descent into poverty. The State Statistics Committee reports 585, 000 additional unemployed as of January 2011; a 7.5% increase since December. Employers’ estimates put the number of Ukrainians receiving wages under the table at around 5-7 million. The average citizens’ means are starkly contrasted by high mortgage arrears, totalling 110.7 billion UAH (US$13.84 billion) as of December 2010.

The State Statistics Committee reports that the income of over 12 million people is currently below the minimal living wage; set at 894 UAH (US$ 111.75), February 2011. Experts note that if the minimal living wage increases to 1200 UAH (UA$150.00), in line with inflation, 35% of Ukrainian families will still be officially considered as living below the poverty line. Considering this delicate issue, the Cabinet of Ministers rejected the proposal to hold a review of social standards in July 2011; despite it being a key promise of Yanukovych’s election campaign. Ukrainian families watch their pay drop, whilst their debts grow heavier; further burdening an already crippled national economy. The population’s debt for utility services increased by 5.5% between November and December last year, increasing the total to 11.4 billion UAH (US$1.43 billion) . The widening gap between the impoverished population and the big business minority sets the scene for massive social upheaval in Ukraine.

People First Comment: For the past eight months Democracy Watch has been warning of the growing levels of real poverty in Ukraine. Today the minimum state salary is UAH 941 (US$117.63) and a minimum state pension is UAH 750 (US$ 93.75). To put this into perspective a tank of fuel for a small car currently costs around UAH 400 and a loaf of bread between UAH 4.00 and 6.00. Life on a minimum State salary is in reality no life at all. The government have made a huge issue of their policy to increase the minimum salary and pension levels. In April the minimum State salary will be raised by UAH 11.00 and pensions by UAH 14.00, hardly recognition of the economic reality of the nation.

At the same time Ferrari has just opened a show room in Kyiv and Bentley Ukraine has the longest waiting list in Europe. The gap between those that have and those that have not is possibly the widest in Europe and is equal to many of the more questionable dictatorships in central Africa.

Just how the poor got so poor is obvious. The parliamentary system is completely geared to personal wealth creation. Money siphoning systems are so commonplace that few try to hide them whilst corruption is just about the only lubricant that works. The question is why the people of this country simply accept induced poverty as if it were their fate. The problem lies in the fact that the people of Ukraine, after centuries of oppression have been beaten into subservience and this is now relied on by those in power to ensure their dominance. However as events in North Africa have so graphically illustrated, even the most oppressed eventually find courage.

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