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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Success of reform depends on economic behavior of the population

10 October, 2000 - 00:00

Over the past several years, Ukraine’s political life has been rich in tempestuous, controversial, and fateful events, in many ways predetermining this country’s future. The presidential campaign, formation of the parliamentary majority, Yushchenko’s Cabinet, and pitched battles in the energy sector. Without doubt, such quick multifaceted developments, plots and schemes could not but bring about changes in the alignment of political forces. More importantly, they caused the restructuring of society. The battles on the political Olympus, fit for a major Hollywood political thriller, cannot overshadow the life inside this society, which, albeit far less conspicuous or noteworthy, is quite interesting and eventful. The Day hopes that its experts can help the reader take a closer look at this life and understand most of its intricacies, on a feedback basis. As usual, its pages are open for just such a dialogue.

This time, the guests at the round table are Oleksandr YAREMENKO , director of the Institute for Social Research, and Olha BALAKIRIEVA , director of the Social Monitoring Center.

UKRAINIAN SOCIETY LOOKS LIKE ELECTROCARDIGRAM

The Day: Where do you think the boiling point of social attitudes is currently? Our experts differ on the subject. Some believe that our society is in a state of depression, others claim that its status is normal, considering that depression has paradoxically become a standard.

O. Y.: I think those supporting the normal status assumption are right, and I would describe the condition of our society as stable. When we say that this status shows negative trends, like stagnation or depression, we often assess the situation proceeding from the results we expect. Of course, we all would very much like to see tangible changes achieved in our over nine years of independence. Yet we forget that there is a great deal of inertia within us, that the outer attributes of statehood are not enough for serious social transformations. Inner changes are needed, changes in public consciousness. Meanwhile, we have a genetic memory inherited from all those many guests who have been visiting our land for 300 years. Getting rid of this takes time. The peculiar features of our historical development have taught the Ukrainian people to show much patience toward all changes and processes initiated from above. As a result, two powerful strata have taken shape: the regime and the people. Regrettably, they almost never approach one another, existing in what is best described as parallel worlds.

The Day: How long do you think Ukraine will have to struggle to get onto the high road, if one were to consider the European way as this road?

O. Y.: I am not fond of making forecasts, but social monitoring over the past eight or nine years points to public opinion resembling the curves on an electrocardiogram. I also think that there are positive changes, even though slow like a ground-swell, often after much groping in the dark. Our studies point to a major problem: neither the executive nor legislative branch has a clear concept of influencing the population’s economic conduct. In its absence no significant changes can be expected in the economy.

For example, a poll of managers of private businesses gave us amazing results. They complain about personnel problems, that there is a shortage of qualified help. Those operating in the Ukrainian market economy, having excellent working conditions and receiving very good money, often cannot or do now want to work the so-called capitalist way. One of the reasons is the existing system, where 25 out of 120 million employed were redundant (according to studies in the late 1980s). And the problem was not that all those featherbedding “toilers” had to be fed, but that they formed a mass attitude toward work, from which we are now harvesting the bitter fruit.

WANTING TO DRINK CHAMPAIGN WITHOUT RISK

The Day: How does a Soviet worker becomes a market economy one? What has come of our previously much-vaunted working class?

O. Y.: In fact, my dissertation was dedicated to the formation of a conscientious, creative attitude toward work in young employees. Even then, in the late 1980s, I was amazed to discover how many papers had been written on the subject, offering detailed analyses of production relationships and workers. Polls showed that they never felt they were masters of production and owners of the so-called socialist property. Of course, that truthful attitude was branded as ideologically hostile and never officially accepted. Over the ten years of our studies, the worker’s sociological portrait has undergone many changes, with noticeable distinctions corresponding to age, regional, and sector groups. We were particularly interested in ascertaining what economic model people preferred. Was it living on low wages and taking no risks or accepting risks, having to put up with daily hardships, and hoping to get a big payoff from one’s business sometime in the future? Or was it living on low official wages while moonlighting? The latest poll at the start of the year showed a disheartening trend: there were considerably fewer young people prepared to take risks, hoping for the best.

Fortunately, this is not the final verdict. The Committee for Entrepreneurship and Regulatory Policy wanted to know whether the number of entrepreneurs could increase by 100,000 a year. Our institute’s monitoring groups carried out a representative all-Ukrainian poll. The results point to an answer in the affirmative. In fact, their number could increase by another 200,000 or more, but only if the rules of economic conduct were changed, primarily the tax laws.

MINDING ONE’S OWN BUSINESS, NEVER TRUSTING ANYONE OR ANYTHING

The Day: We often hear about our reformist government. This has become another clichО. Simultaneously, we cannot help but notice that the actual scope of economic liberalism has been substantially reduced. We see foreign companies pulling out of Ukraine and the tax authorities’ take — everything is pushing domestic business back in the shadows. What are the dynamics of public attitudes toward the powers that be against this background?

O. Y.: Speaking of how much people trust various institutions of power, the President’s ratings after the campaign euphoria are firmly back to 30%. The “reformist” Cabinet is now almost as popular as Valery Pustovoitenko’s “nonreformist” team. On the whole, the degree of trust in the branches of government, the Cabinet and parliament, regional and district state administrations, is traditionally low. Interestingly, more trust is placed in local executive authorities than the Cabinet, because they are more transparent. This express distrust of those in power, with each side living according to its own laws, is in a way a guarantee of stability; it does not trigger any dangerous outbursts in the current explosive socioeconomic situation. This is an opinion, of course, which you can take or leave, yet no special changes are going to take place, no matter how often miners come to Kyiv and bang their helmets on the pavement or journalists drive their carts with pumpkins. Because there is no stratum capable of offering any tangible moral resistance, being understood and supported on a large scale. Historically, every Ukrainian prefers to mind his own business and there is no denying it.

PROFESSIONAL MOBILITY: 10% READINESS

The Day: Remember how we mourned all those engineers, teachers, and doctors turning into petty shuttle traders? Even though it was a kind of general educational course in individualism, just like the dacha is an experience in self-sufficiency. Through their personal bitter experience people saw an opportunity for professional reincarnation, a way to change their life. Would you broach a subject which remains practically unexplored in Ukraine: hired laborers and their employers, their relationships and social expectations when being exposed to new labor rules and coordinates?

O. Y.: This transfer demonstrated the monstrous paternalism of the old system; the influence of the state was so strong an individual never even thought he could be the author of his own work record. In the West, every worker changes jobs an average of four times in his/her lifetime. Each attends refresher courses once every three years. Here it is done by 5% workers — and it was the same under the Soviets. However, the most alarming statistic is that only 10% of the employed want to do so. But here, too, there is an encouraging trend: the younger generation with its pragmatism, strong desire for knowledge, earning good money, and for mastering 2-3 specialties as a guarantee of success.

THE NEW GENERATION CHOOSES INEQUALITY, THE HARD WAY

The Day: Given today’s so- called peaceful coexistence between the regime and the people, we have learned vegetative survival. However, can a state really evolve with its people oblivious to higher goals and aspirations?

O. Y.: I can’t answer this in so many words. I think every individual should assign himself important, worthy objectives. In that case the whole country will have a noble cause to pursue. Unfortunately, we do not have a national idea close and dear to most of people. The politicians banking on the nationalist idea suffered a fiasco. In the recent past, we had imposed on us the idea of being part of a great country all set to build a brilliant future. We do have positive patriotic trends now. In 1994, we asked whether you are proud of being a citizen of Ukraine? We heard yes from 33% of the respondents (40% among the youth). Last year, 60% (and 70%, respectively) said they were. The new generation born in independent Ukraine regards it as their true homeland.

O. B.: I would like to specify that this pride, as expressed by the younger generation, is rather declarative. One can feel proud of one’s country when living and working abroad. Now there is another aspect to it, a sense of responsibility for one’s own country, being prepared to make every effort to change it for the better. This sentiment proves considerably weaker in young people than the rest of the population.

The Day: Every Ukrainian dreams of building his/her fortune. This is a functional concept, but give it an attractive ideological wrapping. Or take the idea of integration into the European community of nations, quite an idea. Ukraine cannot be admitted to the European Union, not now anyway, but we can still work to achieve European living standards. Does our society accept this idea?

O. B.: I don’t think so. No one believes in a happy life for everybody at present. The reason is that the previous idea of socialist paradise on earth (e.g., a society of equal opportunity and boundless prosperity for all) proved utterly bogus. Now this society is dominated by the understanding that there can be no equal opportunity for all.

STATE AND SOCIETY: MEETING EACH OTHER HALFWAY

The Day: In other words, if we want changes we will have to wait until this young and hope- inspiring generation dominates at the polls. But what will happen to this society in the meantime? Also, what is it precisely that can secure rapprochement between the government machine and power of the people? How are we to introduce feedback, considering that the regime is now completely independent of the people?

O. Y.: All your questions are difficult. To answer them, we must first make clear what we are trying to build in Ukraine. Do we need a strong executive branch, a presidential republic, or what? I think there is a very strong point of contact in economic interests. A lot of social problems will be solved after those in power make decisions stimulating business activity, individual entrepreneurship, self-employment, and when normal rules of the game are secured. After that the tremendous potential of the Ukrainian nation, in terms of diligence, determination, and perseverance, will show itself in full. Once the people’s status is changed, so will their attitude toward the regime.

The Day: There is the shadow economy. How well have sociologists studied this phenomenon? What role does it play in today’s Ukraine? Will there be light to cast away this shadow?

O. Y.: The shadow economy reminds me of a two-headed eagle. It allows people to survive, it has a well-organized network of channels keeping the legitimate economy afloat. It is like a mirror reflection of the latter. Simultaneously, it nourishes double morality in terms of both business and social relationships. Worst of all, it is breeding the next generation of illicit businessmen. Even now it makes up over 50% of all economic interactions in Ukraine. The outcome of economic reform in Ukraine depends not on how well they can manage the energy sector but on the Ukrainians’ economic conduct. This, in turn, depends on the rules of the game enforced by the government.

STRONG SOCIAL POLICY: PAYMENT FOR PEACE AND QUIET

The Day: Reform must be accompanied by a strong social policy. We have heard this thesis for a number of years. What do you think can make our social policy strong?

O. Y.: Protecting every single person in the first place. We have tried different approaches to social protection, but each was built on the for-all principle. None has worked, and nor would it ever have done so, not in a stratified society. Every hryvnia invested has to pay back. For example, who can explain what happens to that 37% of every hryvnia deducted to that pension fund? Or why certain citizens arrive in foreign expensive cars to apply for welfare? Incidentally, our institute worked out a social policy monitoring concept and proposed the Ministry of Labor institute it. It would make possible assesing the legal framework and make recommendations for solving social problems.

O. B.: I think that the philosophy of social policy means helping one help oneself, providing him or her with conditions in which he can solve his/her own problems. And this calls for a flexible targeted welfare mechanism, so that the people who really need it will get it. Visiting Denmark, I was shown schools for the socially disoriented. I think it was a very useful experience. Their main objective is to put such people in them, help them find themselves (a member of the Danish Cabinet is a graduate of one such school, I was told). Also, it is necessary to decentralize budget funds as much as possible, concentrating them at the local administrative level, for there such problems are more visible.

O. Y.: If we are building a true democracy, we have to support people hurled to the bottom of society; this is the price society has to pay for peace and quiet.

Round table hosted by The Day’s Larysa IVSHYNA, Oleh IVANTSOV, Yevhen BRUSLYNOVSKY, and Oleksandr FANDIEYEV
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