Rising unemployment, falling hryvnia and sputtering economy have Ukrainians worrying about what's ahead in 2009
Ukrainians are fond of saying “we are not used to living, we are used to surviving.” Their survival skills will be put to the test this year.
The nation greeted 2009 with a natural gas shutoff from Russia. The national currency, which lost half its value against the dollar since mid-summer, continued to slip. The overall economy is expected to shrink 5 percent by year’s end.
The slowdown is exacerbated by the collapse in the world steel market, Ukraine’s top export. But other sectors – retail, restaurants, construction, real estate, banking, advertisement and news media – are all taking hits as a chain reaction of cascading bad news takes hold.
Hundreds of factories are closing or slowing production. Roughly 1 million people out of a workforce of more than 20 million adults are officially jobless, according to State Statistics Committee figures, which may be understating the problem. Some fear the number could reach 5 million people.
Spring cannot come soon enough for many, although only the weather might be better by then, as nobody can say when the economy will bottom out.
This recession is different than ones following the collapse of the Soviet Union in 1991. Now, the entire global economy is suffering, making it harder to find an escape route to greener pastures.
What does it mean in human terms? The rich will become less rich (although few are likely to sympathize). Some will slip from the nation’s nascent middle class into the larger pool of struggling or impoverished citizens. Those already in poverty will become desperate.
Almost everyone seems destined to be knocked down at least one economic station in life. Some may just have to eat out less and buy fewer clothes. But others may lose their apartments or move back home with parents, friends or relatives. One university student lived in a one-room apartment with two other roommates until they all lost their jobs over the holidays. Now she has moved back to the dormitory.
“Maybe I’m too positive, but to be honest, I don’t want even to imagine the worst case scenario,” the job-seeking student said. “It looks catastrophic and I have no plan B in case it happens.”
Here are two of the millions of stories of hardship and misery happening all over this nation:
From Kyiv to Lviv
Yuriy Panasyuk moved to the capital four years ago after being promoted from Lviv to the Kyiv office of a large Ukraine-wide telecommunication company. Rapidly climbing up the career ladder, within two years he became head of the sales department in his company. Making his way to the top, Panasyuk gradually earned his spot in up-and-coming middle class.
He saw only a bright future and career growth ahead.
But the economic crisis wiped out the entire sales department. On Jan. 16, Panasyuk officially joined the army of unemployed and is now actively searching for a job. If he can’t find one in Kyiv, he will have to move back to Lviv – and soon, as high Kyiv prices don’t leave him much time to look around.
However, jobs are not easy to come by in Ukraine, even for professionals. “Due to massive staff reductions, the number of applicants for every position has increased dramatically,” Panasyuk says. “At the same time, starting terms [salary and social packages] are much worse compared to those in summer. The crisis is a good excuse for employers to offer less. Hundreds of people, particularly young specialists and those dependent on dollar loans are ready to work for any money. It enables employers to dictate their terms. My friend was fired and then taken back on the same position at the same company, but for less money.”
Panasyuk received two months salary as severance payment from his old job. He has got that much time to find something, or else he will move back to Lviv, where his parents live. “I will be able to find a job in Lviv, but not of a desirable level and complexity. Money would be the third point, as I have a place to live there. With less money in Lviv, it can be as comfortable as with more in Kyiv. Work would not be as enjoyable, however. That’s what makes the difference.”
One more option for Panasyuk, as for other unemployed people, is to register for unemployment benefits at a labor exchange. “The sum of allowance can be no more than the average salary in an oblast. As I am registered in Lviv, my monthly allowance will be no more than the average salary in Lviv oblast, which is Hr 1,400.”
From creative to mechanical
For the first time in nine years of living in Kyiv, Roman Chernomaz, a photographer from Cherkasy Oblast, is forced to leave his profession – or, as he puts it, his “beloved news photography.” Roman lost his job at an Internet-based information agency. He is retuning to his native Uman, but thoughts of leaving Ukraine altogether come to him more and more often.
“I’ve been doing photography since the age of four,” Chernomaz said. “However, only in Kyiv I realized that reportage photography is what I was born for. Now I have to go back to ‘mechanical’ shooting of pictures of school proms and working at one of the Uman photo studios.”
Chernomaz expected a wave of staff reductions to hit the agency, but not until spring.
“Many people say that mass staff reductions are simple ballast elimination. It’s not ballast elimination. It’s a sick economy.”
Nevertheless, Chernomaz stays positive and looks on the brighter side. “The crisis is not everlasting. I will definitely return to Kyiv and my favorite business in several months.”
Meanwhile, he plans to improve his knowledge of foreign languages, as leaving Ukraine moves up the list of his possibilities. “Leaders of most of the nations are doing everything to fight the downturn. Only in Ukraine, they seem to be glad to have a crisis, as it’s another way to satisfy their interests and ambitions.”
