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Ukraine: breaching the social contract with the background of "MikhoMaidan"

Photo: strana.ua

The main news of the week in Ukraine were rallies in the center of Kiev led by former Georgian president Mikhail Saakashvili. At the moment, we can state that the action has run out of steam, failing to achieve its goals.

To remind, requirements of the organizers of the rally were to establish an anti-corruption court (as fixed in the most recent memorandum with the IMF), eliminate the institute of parliamentary immunity, and change the electoral system from mixed to proportional one with the so-called open lists.

The actions of the organizers do not correspond to the reality of the present-day situation: the slogans put forward are not a part of the current agenda of the majority of Ukrainians, who are much more interested in the issues of utility tariffs, unemployment, inflation, and crime (a typical example when the liberal public is trying to swap the basis and superstructure). Therefore, only a few thousand people gathered for the rally outside the Supreme Rada - in parallel with the rallies hosted by Vadim Rabinovich’s "For Life" which summoned as many participants near the National Bank. Moreover, one must take into account that the mass consciousness is disoriented, embittered, is in a depressed state; in conditions when the population is primarily concerned with survival, it does not get involved in protests.

Apparently, the organizers of the action, most of who have long been connected with Washington and the structures of George Soros by a system of personal loyalty, relay the wishes of Western circles who want to control the Ukrainian "tops" even more. Realizing the threat, Petro Poroshenko began to overtake the agenda of the protesters. Thus, Poroshenko introduced a bill on the removal of parliamentary immunity from 2020 (although his opponents insist on much earlier deadlines and made their proposals, both draft laws are submitted for examination to the Constitutional Court, where they can lie indefinitely) and stated the need to pass a law on the anti-corruption court, taking into account the amendments of the Venice Commission to the existing draft laws (and the change of the electoral legislation was voted down by the deputies of the parliament). Certainly, the idea of creating an anti-corruption court does not appeal to the Ukrainian president (about which he spoke at the September forum of the Yalta European Strategy), but from the moment of its first reading to the launch of the courts, more than one year may pass - at each stage many things could be ‘fixed’, and in the end the right people could be brought into the judiciary corps.

For the time being, it turns out that the current round of political confrontation was won by Poroshenko. If there are no provocations, and the organizers of the rallies do not add socio-economic dimension to the political demands, the protest actions will come to naught, and the political struggle will return to the format of parliamentary and cabinet fuss. It should be noted that Interior Minister Arsen Avakov, who has a significant influence on the paramilitary formations, stays neutral in the confrontation between Poroshenko and the street, blocking the power scenarios against the president (but in the backstage negotiations this aspect will certainly strengthen Avakov’s positions and, accordingly, of the separate groups of the Popular Front, the formal partner of the Petro Poroshenko Bloc - Solidarity in the parliamentary coalition).

While public attention was focused on "MikhoMaidan", the Supreme Rada adopted a medical reform; it seems that the public resonance of this event would have been clearly greater if it had not been for the protests led by the former president of Georgia. In view of the fact that the "food supply" is steadily shrinking, Ukraine can no longer afford to support the medical sphere, known as the "Semashko system" (there is decommunization for you). In short, the essence of the reform is extremely simple and means commercialization of the healthcare system. On the one hand, none of the significant health problems in Ukraine could be resolved without financial resources (the Constitution provides for free medicine), but on the other hand, the announced prices for the provision of medical services significantly exceed the amounts of what was previously underhandedly paid by patients to the attending doctors in envelopes (which means that prices in private clinics will also grow). It is noteworthy that, according to the study “Health Index. Ukraine-2016 " (May-June 2016, conducted by the "Revival" and "Social Indicators" funds as well as KIIS), 43% of people hospitalized in the last 12 months (from the moment of interview), were forced to borrow money or sell property to cover costs of treatment, moreover, 39% of citizens were ill, but did not visit doctors because of lack of funds.

Given that the pension reform was adopted in early October, it turns out that the state finally sheds most of its social obligations. Let us recall that the key aspect of the reform is to increase the qualifying period starting from 2018 from the current 15 years to 25 years; and from 2028 it will be necessary to have as much as 35 years of pension insurance record for pension calculation - which in fact is not so much a reform, but optimization of the chronically scarce Pension Fund. This reform sharply reduces the motivation of employers and employees in the private sector to pay / receive an "above board" salary, and taking into account the level of the shadow economy and the number of Ukrainians working abroad, in the long run even a minimal pension will be destiny of the chosen few.

The adoption of pension and medical reform, coupled with the commercialization of the higher education system, indicates that the social contract that existed until recently in the country was ruptured by the ruling elite. Until 2014, it was drafted roughly as follows: citizens do not stop the "tops" from appropriating corrupt rent; the "tops" do not prevent citizens from living, guaranteeing a certain set of social benefits (optional direct taxes, low tariffs of natural monopolies, exchange rate stability, a certain minimum of shareware medicine and education, and pension minimum). But after Euromaidan, the reduction in the resource base forced the social benefits to go under the knife, and in late 2017 the entire set of social benefits actually dissolved in time and space. The "tops" still want to live the old way, because they do not want to offer any new social contract, and they cannot. Will this situation lead to mass actions of direct social and political protest? That is not a fact. But, no doubt, the pace of emigration will grow, the more so the ruling elite maximally contributes to this, having achieved the implementation of "visa-free travel".

Denis Gayevsky, Kiev

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