Governments says economy rebounding, but unemployed Zaporizhians don’t feel or see the recovery.
ZAPORIZHIA – After 15 years of working at an aluminum plant in the industrial city of Zaporizhia, Anatoly Legenchuk will spend this summer cultivating grapes.
For Legenchuk, however, it wasn’t a lifestyle choice to leave behind the factory’s choking plumes of smoke.
Like almost 6,000 others over the past five years, he lost his job at the plant in May, leaving him with an uncertain future in a city that was once an industrial hub, but has been crippled by the financial crisis that began in 2008.
“Now I am growing grapes. But it is seasonal. If nothing changes, I’ll eventually have to collect bottles or clean streets,” said Legenchuk, 39, with desperation in his voice.
Official government figures suggest Ukraine’s economy is rebounding from a 15 percent plunge in gross domestic product.
GDP was up 5.3 percent in the first quarter and nationwide unemployment inched down slightly from 2.1 percent in April to 2 percent in May.
But blue collar workers and average citizens in Zaporizhia say they don’t see or feel improvement. Rather, things are getting worse, they suggest.
“There are no jobs in Zaporizhia,” Legenchuk said.
The decline of Zaporizhia, a city of around 750,000 on the Dnipro River in southeastern Ukraine, has been hastened by a pincer movement of rising energy prices and falling demand for its main products: aluminum and steel.
Two of the town’s four major factories – Zaporizhia Ferroalloy Plant and Zaporizhia Aluminum Smelter – have also suffered in recent years from failing to secure special tariffs for electricity.
Critics accuse the government of favoritism in handing out the cheaper rates that can make or break a factory’s profitability.
While the rest of Ukraine is also struggling, this city has been hit particularly hard by its over-reliance on Soviet-era heavy industry, with few small- and medium-sized businesses to pick up the slack as the major plants have laid off workers.
In May, around 2,000 workers were fired from Zaporizhia Ferroalloy Plant, which is owned by oligarch Ihor Kolomoisky’s Privat Group; in the past half-decade, employees at the Zaporizhia Aluminum Smelter, owned by Russian aluminum giant RUSAL, dropped from 6,500 to 690.
In Kitchkas district, home to plant workers, young men wander the streets from the early morning with beer bottles in hand.
Valery Sizov, 40, is a former colleague of Legenchuk’s who was also laid off six months ago.
He has worked in aluminum for 17 years – most of his working life – and now can’t find another job.
He briefly found employment at the ferroalloy plant, but was fired after only a month when problems set in there, too.
Serhiy Rybalko, head of the Aluminum Trade Union Committee, said the plant had failed to secure special cheap energy rates in 2005, and therefore couldn’t be competitive.
Talks with the government of former Prime Minister Yulia Tymoshenko in 2009 failed to solve the problem, and the current government also has not offered concessions.
The factories themselves, however, have hardly been modernized since Soviet times and are inefficient users of energy.
Viktoria Peleshko, a spokeswoman for Zaporizhia Aluminum Smelter, said the plant had been loss-making for three years and that work at the plant had been frozen as no agreement had been reached with the government on electricity tariffs.
She said the workers who had been laid off had received redundancy payments and had been offered jobs at plants in Russia.
Neither Kolomoisky, owner of Zaporizhia Ferroalloy Plant, nor the plant’s top manager could be reached for comment.
Zaporizhia governor Borys Petrov said the aluminum factory’s owner failed to fulfill promises to modernize the plant.
Former workers find another target – current and former political leaders and their oligarch backers.
“The whole situation is about the Donetsk and Dnipropetrovsk mafia trying to divide up the country. As a result common people suffer,” Sizov said.
President Viktor Yanukovych and his main backer Rinat Akhmetov, Ukraine’s richest man, forged their careers in the eastern industrial city of Donetsk, as did a number of other leading government officials.
Kolomoisky, Tymoshenko and current Deputy Prime Minister Sergiy Tigipko hail from Dnipropetrovsk, a rival of Donetsk.
Zaporizhia mayor Alexander Sin said the employment market had stabilized after large-scale job losses in 2008 and 2009.
Sizov, however, said he hadn’t seen any evidence of this.
He has been offered a job as a locksmith on Hr 1,100 ($140) per month before tax, one-third of his wage at the plant.
He is pinning his hopes on a revival of the plant.
“We don’t care who is in power at plant. They need to decide faster and let us work. Winter is coming soon and we won’t be able to pay Hr 700 utility bills. How can we survive?” Sizov asked.
The lack of prospects is leading to increasing unrest in a part of the country known for its stalwart support of President Yanukovych, who scored 71.5 percent of the city’s vote in the second round of last year’s presidential election.
In early June, thousands of workers from the ferroalloy plant protested in the central square, just as aluminum workers had in 2009.
They demanded an end to the firings and help from the government to solve their plants’ problems. No response came.
Problems aren’t limited to these two factories.
A mining plant in the nearby town of Polohiy was closed at the beginning of June, and Rybalko predicts this could hit the factories it supplied, including steel plants.
But despite the city’s major problems, experts say a mass protest movement is unlikely to take off because of the fractured nature of those complaining.
Other groups have taken to the streets in recent months to protest changes to tax and pension legislation, rising inflation and backsliding on democracy and media freedoms.
“For a mass protest there should be something uniting social organization that should plan not only social demands to the government but also economic and political ones,” said Mykhailo Mischenko from the Razumkov Center, a Kyiv-based think tank. “For now I don’t see one.”
The workers, meanwhile, are waiting in hope for the next election cycle.
Not so that they can vote for a new government, but because they believe a way will be found to restart production as part of pre-election campaigning.
“I believe that it will be much better when Yanukovych runs for a second term,” Sizov said. “As part of the campaign they will start the plant and we’ll have jobs.”
Kyiv Post staff writer Yuliya Raskevich can be reached at [email protected]
