Why is Ukraine so poor

100 francs per capita: 18 million Ukrainians live in poverty

The dream of the Ukrainians of western freedom and western European prosperity has largely come to an end. Even billions of grants and loans from the EU, the World Bank and other institutions cannot avert it: the Ukrainian economy is in free fall. And, like everywhere else in the world, the Covid-19 pandemic is not affecting the wealthy and the rich, but rather the poor and the poorest. Hundreds of thousands - probably millions - of Ukrainians who worked all year round or at least seasonally abroad and had sent part of their salary there back to their families in Ukraine, so-called remittances, lost their jobs abroad and returned to Ukraine unemployed.

The latest figures say: 45 percent of the population or around 18 million people in Ukraine now live in poverty. You have a monthly income (per capita) of CHF 100 or less. Even if the franc and the euro have significantly higher purchasing power in Ukraine than in Switzerland or Germany: nobody can live with that properly.

According to a study by the «M.V. Ptukha Institute of Demographics and Social Research, "which collected these figures, said 60 percent of respondents had financial shortfalls, 38 percent reported a decline in regular income, 16 percent lost their income completely, and 14 percent lost their jobs. According to the research institute's report, households with several children are hardest hit.

In 2019, according to information from the same institute, the poverty rate in Ukraine was still 38 percent, so there were still almost 3 million fewer poor people. (*)

Bitter poverty next to oligarchs worth billions

Lyudmila Cherenko, head of the institute's department for standard of living research, warned of a widening gap between rich and poor. No surprise for Ukraine observers: after the collapse of the Soviet Union in 1991, to which Ukraine still belonged at the time, the wave of privatization, as in all Eastern European countries, turned a number of particularly "clever" - that is, ruthless and often criminal - business people into multimillionaires and dollars Let them become dollar billionaires. One of them, Ihor Kolomojskyj, a citizen not only of Ukraine, but now also of Israel and Cyprus (and who therefore does not violate the Ukrainian ban on dual citizenship, as he told the TagesAnzeiger), lived for a long time on Lake Geneva in Switzerland. He became internationally known not only for his financial struggles with the now nationalized "PrivatBank", of which he was the majority owner, but also because he had his own private army and had offered a bounty of 10,000 dollars for the apprehension of eastern Ukrainian separatists. Today Kolomoyskyj lives in Tel Aviv.

The west looks the other way

Such bitter reports on Ukraine are rarely found in the western media. That is no surprise either. In the negotiations at the time for the Ukraine / EU Association Agreement, the EU took the position that Ukraine had to choose between the EU and the customs union with Russia - either-or! - where the Ukraine was economically more closely linked to Russia than to the EU (over 70 percent of its terrestrial borders with Ukraine are bordered by Russia, Belarus and Moldova). Ukraine as a bridging state was not an option for the EU. But which media in Western Europe are happy to admit today that this either-or demand by the EU was a dramatic mistake and is one of the reasons for the current miserable economic situation in Ukraine?

And what has the EU learned from it? Probably nothing. The massive political interference in the internal unrest in Belarus suggests nothing good here either. On September 9, Polish TV featured prominently how Prime Minister Mateusz Morawiecki handed over the keys to a villa in Warsaw for her and “as a center for the Belarusian opposition” to the opposition activist Svetlana Tichanovskaya (Svyatlana Zichanouskaja) who had emigrated to Lithuania Svetlana Tichanowskaja has already called “President” (“Pani przewodnicząca”) more than once. A perfect provocation that gave a lot to talk about, not least on Russian television. With the non-recognition of Lukashenko as the elected president and with the recognition of the opposition Svetlana Tichanowskaya as a “temporary” representative of Belarus, the European Parliament has now also taken a step towards a new serious conflict in the East that cannot be overlooked.

Belarus only borders a third with the EU and more than half of its foreign trade takes place with Russia today. If these close relations with Russia are disrupted and hindered in Belarus, Belarus, which is now in a much better economic position than Ukraine, is in danger of collapse.

(*) Despite repeated inquiries as to when these studies on poverty were carried out, the «M.V. Ptukha Institute of Demographics and Social Research »» no answer. It is therefore difficult to estimate how big the fall of further millions of people into poverty in general economically and how far it is caused by the Covid 19 crisis.

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See also the dossier

"Ukraine and its banking scandal" (on Infosperber)

«Ukraine between East and West»

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