On December 2, 2015, Ukraine’s Cabinet of Ministers “will turn one year old.” Introducing it in 2014, Yatsenyuk assured everyone that he “will overcome all the difficulties” and “make the hopes of millions of Ukrainians come true” and, in fact, gave Ukraine “a ticket to hell.”
1. Impoverishment of people
Consumer prices in Ukraine have increased 1.5-fold within the year, amid real wage decline by ¼. The average wage in Ukraine before Yatsenyuk’s taking the prime minister’s post was more than $400, now it is $174. The overall impoverishment of the population is seen not only in statistics. For instance, Global Wealth Report by Credit Suisse says the income of Ukrainian families has fallen by 40% in 2015.
On September 1, the government pompously raised the minimum wage - it had been left unchanged for 2 years – up to 1,330 UAH (Ukrainian hryvnia) or $53. By calculations of Ukraine’s Ministry for Social Policy, it must be at least twice as higher, while independent experts say it must be higher 5-6-fold.
The population in Ukraine has decreased by 173,000 people within the year. Migration continues, as Yatsenyuk’s Cabinet weighs cancellation of free medical services and introduction of prepaid medical care. No reforms have been launched in the healthcare sector, but state procurement of drugs was failed depriving people from vaccination and patients suffering chronical diseases from vital medicines. In addition, the prices at pharmacies differ radically, as the government has distanced itself from controlling the pricing in the pharmaceutical field.
Alexander Dudchak, a political analyst and economist, says the government uses various methods to reduce the population size. First, the people are forced to migrate, as living standards fall. Second, people migrate due to the continuous hostilities in the south of the country. Third is the medical sector – elderly people with their miserable pensions die from malnutrition, insufficient treatment and stress.
3. Destruction of economy
Yatsenyuk’s government has actually destroyed Ukraine’s economy: there is two-digit decline in all sectors. Foreign trade shrank by 1/3, with country’s gold and foreign exchange reserves being replenished on the funds of foreign credits only.
Alexander Okhrimenko, president of the Ukrainian Analytical Center, brings the official statistics to show how Yatsenyuk and his Cabinet work. “No indicator except inflation has grown. Retail sales fell by 1/3, industry – by 20%. Construction sectors shrank by more than 30%, while the agricultural sector fell by 10%. Even in the crisis years of 2008-2009, economy in Ukraine did not experience such a decline,” he says.
4. Taxation pressure
Yatsenyuk’s promises to improve business conditions did not help. The tax reform has not relieved the fiscal burden, just the administering procedures. Most of the companies are not happy with the lowered rate of the single social tax.
In addition, SME representatives say inspections have intensified, amid growing number of bribery cases. Investments are “running out” of Ukraine not because of war alone.
5. Hryvnia decline
Ukraine’s national currency depreciated from 8 to 25 UAH per 1 USD. Although the prime minister tries to lay the responsibility for it on the management of Ukraine’s National Bank, one of the key reasons behind the devaluating hryvnia is the state budget deficit and fiscal deficit of Naftogaz.
6. Unbearable debts
Yatsenyuk has so many times told about how he prevented a default that it seems like he has believed he really did. Meantime, several technical defaults, including one within the framework of the national debt restructuring, have already happened in Ukraine. Unless the government achieves an agreement with Russia, a true default will be announced, as Russia may demand repayment of its Eurobonds.
Furthermore, in the first half of 2015, Ukraine’s foreign debt grew from 95% to 123% of GDP. According to WB forecasts, Ukraine’s foreign debt will exceed GDP by 1.5-fold by the end of 2015. This is a true disaster for Ukraine – many generations will have to pay for Yatsenyuk’s “victory.”
7. Foreigners in government
Ukraine’s government is packed with foreigners as never before. Many thought foreigners will help fighting corruption and making true reforms. Meantime, “the Varangians” arrived in Ukraine temporarily and, in fact, did not care for its prosperity. It is no secret of that Ukraine’s government is under full control of the United States. And finally, corruption has just grown and “reforms” have just deteriorated the living standards.
8. Lack of gas and coal
“Reforms” in energy sector were limited to a rise of the electricity price by 70% and gas price – by 273%. Heat and hot water rates increased 1.5-fold. Diversification led to refusal from the Russian gas in favor of reverse supplies, which is inherently the same Russian gas but more expensive. Coal reserves will be sufficient for two weeks without permanent supplies from Donbass.
“Our patience is wearing out – it is high time to tell the people the truth!” users post in social media.
9. Closed airspace
A month after air communication with Russia was suspended, Ukraine’s Infrastructure Minister Andriy Pivovarsky said Ukrainian companies and people “did not feel any inconveniences.” Social media responded not so adequately, but soundly: “Burn in the hell!”
There were more balanced comments too: “Every year, Ukrainian air companies transported 200,000 passengers to Russia. Can you mention any other destination with such scales of passenger traffic? Couldn’t you at least wait until IAU makes its annual report? Poor reformers!”
On November 25, Yatsenyuk said Ukraine closed its air space for Russian air companies. Pivovarsky told journalists that the country’s national air carrier, Ukraeroruh, might lose 25mn-30mn EUR a year as a result of the ban. “The Russians will lose more as they will have to revise their routes,” he said.
10. Country splitting up
Meantime, the nerves of the people’s nerves are on the edge and the most insignificant reason may turn enough to split the people into “insiders” and “outsiders.”
“The conflict with Russia continues, as the government keeps stirring up it,” says Vsevolod Stepanyuk, economist. “The prime minister’s steps show that he works to deteriorate the situation rather than to improve it. Yatsenyuk takes no steps towards conciliation or a compromise. It appears to be his deliberate policy. It is very strange that people that unleash war are called patriots.”
Ruslan Vesnyanko (Kiev, Ukraine) for EADaily