Tuesday, April 20, 2010

Vasyl Tsushko, our new minister of economics and former minister of internal affairs, believes that after nearly 19 years of independence, Ukraine still hasn't come up with clear definitions "of what a poor person is and what a rich person is."

He talked about it on Savik Shuster's show last Friday (for a couple minutes, beginning somewhere at 1:54:30).

He chose to focus on the problems with public utility payments to convey his vision of the social gap. One of the common arguments, he said, is that the rich ones must pay for their utilities themselves, while the state's duty is to help the poor. But some of the poor are actually quite rich.

There's a hypothetical elderly pensioner, male or female, who lives in a three-room apartment on Khreshchatyk, Kyiv's main street, which, according to Tsushko, costs $1 million even in the time of the financial crisis. This person is nevertheless barely surviving on 700 hryvnias a month of his/her state-paid pension (800 hryvnias would be $100, more or less) - and expects the state to cover his/her utility bills.

Then there's a hypothetical pensioner who is surviving on the same 700 hryvnias a month in a village 500 kilometers away from Kyiv, in a house with a small plot of land that would sell for no more than $5,000, provided that this village has a road, gas and electricity (some don't, obviously).

If we compare these two, Tsushko continued, we'll come to a conclusion that the latter is dirt poor, while the former is a millionaire. Still, the state offers utility payment assistance to both.

How outrageously unfair.

Some 20 minutes later, at around 2:20 into the show, Vitaly Portnikov, one of my favorite Ukrainian journalists, exposed Tsushko's messy reasoning as a Freudian slip totally typical of a Ukrainian government official. Yes, right, he said, let's kick those elderly people out of their expensive Khreshchatyk and Lipki apartments - and move in there ourselves. Tsushko tried to argue that Portnikov had misunderstood him, but with little success: his point was, he said, that a person with $1 million in assets shouldn't be walking around begging for money.

I can only add that there remains just a handful of those elderly people on Khreshchatyk who, according to Tsushko, aren't aware of the fortunes they are sitting on/living in. There are not enough of them to deal a serious blow to the state budget: they aren't the real culprits. Many of them tend to vote for Tsushko's friends in the Party of Regions, too - but, apparently, "their number is negligible and they are stupid" (apologies to Dwight Eisenhower for using this quote in a somewhat wrong context).

Also, a three-room Khreshchatyk apartment costs around $500,000, not $1 million, but Tsushko, an agrarian populist, had to somehow squeeze 'millionaire' - a loaded term - into his brave little speech. And while his words must have appealed to some of his rural voters, the truth is, there's a Khreshchatyk sort of thing in every city, every town and every village in Ukraine: it's all relative, a slippery slope. You free the budget of the Khreshchatyk-based elderly burden, enriching yourself along the way, and then your lower-ranking, less privileged colleagues elsewhere will use the same noble justification to arrange some nice property deals for themselves - in areas that you, a Kyiv-based brat, would never consider worth fighting for. Not that they ever needed Tsushko's guidance to do that, of course...


  1. In the cynical words of this politician, I hear one comforting fact : there ARE still modest inhabitants on this Kiev avenue. And this is not ordinary, am I tempted to say in tribute for Ukraine.
    Really, could you imagine that on Champs-Elysées or rue de Rivoli?
    In Geneva, after half a century of speculation,the city has been cleared for quite a few decades of modest dwellers : not affordable anymore.

    So, it makes me happy for Kiev grandmas and grandpas. Even if, as you said, this is for little time now...

    Take care

  2. IMHO, Tshushko simply complained about the unfinished "beloved babushka" business left over from Chernovetsky.

    As an agricultural man, he will probably help Chernovetsky restore buckwheat supplies so that every $1M babushka gets gentrified out of her apartment.