Poverty in Ukraine

It is widely acknowledged that the current situation in Ukraine is a mirror of poverty, accompanied by an endless economic destabilization. The nature of the problem cannot be sufficiently analyzed due to the reason that there are different criteria to exploring poverty. However, the above-mentioned statement does not mean that poverty is a non-definable issue in the context of Ukrainian nation. It is necessary to point out that the actions of the ex-government and the former president Victor Yanukovych exerted deleterious effects upon lives of many people and the country, in general. Therefore, it is reasonable to mention that corruption was the peculiar trigger that fostered poverty and contributed to the contemporary set of problems in such a rich and resourceful country as Ukraine. In case people and the present government leave the problem unsolved, the country may experience a huge economic breakdown that would result in Ukraine’s loss of power. Although the problem of poverty in Ukraine is rather complex, there are some potential solutions to address them and alleviate its tension.

Analysis

Poverty in Ukraine is summoned by multiple factors that should be taken into consideration. The peculiarity of the nature of poverty in Ukraine and throughout the former Soviet Union is the fact that poverty, being to a large extent a consequence of the collapse of a single economic sector, continues to delve into a series of massive inertial processes. It can be assumed that “No single statistical approach can encompass all aspects and manifestations of poverty” (Shyshkin, 2008, p.13). The problem of poverty in Ukraine is marked with the financial and economic crisis that significantly affected the socio-economic situation in Ukraine. The empirical data demonstrates that in times of economic and political crises, the extremely aggravated poverty is prone to contributing to social disaster. Economic turmoil will inevitably lead to lower wages, rising arrears of payment, increased dependency and released by the unemployed, etc., leading to lower income levels and increase the amount of poor.

In turn, among the effects of poverty in Ukraine, one may find low fertility, health problems, inability to obtain quality education, mass emigration, outflow of the economically active population abroad. In addition, Ukraine begins to develop chronic poverty. The result may be conspicuous because future generations are not able to receive adequate vocational and educational training that in the near future will lead to their low competitiveness in the labor market. Another cause of poverty is the lack of ability or undesignated most needs, resulting from lower social standards. Living in poverty is a habit that transforms the psychological perception of reality.

As corruption can be considered one of the main contributors to poverty nowadays, it is worth paying attention to the factors that cause it internationally. According to Osispian (2010), “The corruption rate in Ukraine is high and not very different from other former Soviet republics” (p. 104). Scholars reach a conclusion that there are three major contributors to corruption. Namely, they manifest themselves in discretionary power, judiciary failures, and economic rents. These particular factors supplement each other, thus conceiving a special background for wrongdoing in the context of operating financial issues. In Ukraine, apart from corruption, there are different causes of poverty. Despite the fact that the minimum wage is the nation’s social safety net, it is economically unjustified and socially unjust. The next cause is deficient tax system, or a large gap between tax payments, meaning that rich and poor citizens do not differentiate in the sums of tax collection. In Ukraine, one may observe high unemployment among young people and those approaching the retirement age, as well as poor quality of policy distribution and redistribution of income. Many researchers that investigate poverty issues take for granted that the only thing that can reduce poverty is to create well-functioning markets, achieve macroeconomic stability and growth.

In recent years, the authorities have developed and implemented certain measures to prevent and overcome poverty. This is evidenced by a number of legal documents adopted by the Verkhovna Rada of Ukraine and the Government of Ukraine. However, it turned out that the former government in Ukraine only benefitted oligarchs and rich people, along with the former president. Evidently, it can be proved by the former president’s home, considered the biggest property of the president in Europe. According to Walt (2014), “At first glance, it looks like a giant art project, but in fact it is a much more forensic undertaking” (p. 18). Nowadays, the problem of Ukrainian crisis that results in poverty reaches inadmissibility. Due to this reason, Ukrainian citizens demand lustration of all the authorities, in order to make changes. One may only guess what this particular type of reform will bring to the solution of the underlying problem.

Poverty hurts not only the individual, it is a threat to Ukrainian society as a whole. The more poor people there are, the less stable the society is, and the risk of a totalitarian regime is higher. Moreover, in poverty, large entrepreneurs arise; they are particularly interested in cheap labor, they get huge profits by selling products for export, and become oligarchs.

Recommendations

In presenting the problem, researchers specifically dwell upon the importance of the fact that Ukraine is marked with transition economy. Such a perspective is a good reason for the occurrence of poverty. In this case, Slay (2008) suggests implementing social policy reform. The researcher lays an emphasis on the significance of such reforms:

Many transition economies have introduced reforms to better target social benefits, reduce the unintended side effects of tax systems and labor market regulation, strengthen work incentives, and shore up the sustainability of pension and health care systems in the face of unfavorable demographic trends (Slay, p. 63).

It can be assumed that the Ukrainian reforms should be individually based on the experience of other countries that attempted to overcome poverty that emanated from the transition economies. By saying ‘individually based’, I mean that Ukrainian reforms should embrace the peculiarities of the country and people’s expectations. However, they should rely on the background of previous experience that is, nowadays, crucial in political studies.

Despite the fact that each year the government increases the social benefits of socially vulnerable system operating in Ukraine, benefits do not reduce the level of population stratification, but increase it. The system of state social assistance should be reformed and favorable to the performance of its functions and duties. In order to overcome poverty, experts consider it necessary to reduce the tax burden in Ukraine, simplify permitting system and create a competitive business environment.

This problem can be solved by combining active social policies to restore growth and employment and creating opportunities for decent work, with effective support for the most vulnerable population. Poverty, as a complex problem, affects virtually all spheres of society, thus reducing the need for the creation of special conditions of economic, ecological and social environment. According to Cherenko (2008), “A comprehensive analysis of poverty in Ukraine during 1999–2005 shows that economic growth makes it possible to reduce absolute poverty” (p. 29). Therefore, in the upcoming years, the problem of poverty reduction in the country must be addressed by implementing the following strategic areas: employment growth and development of the labor market, an increase in income from employment, introduction of appropriate insurance principles of social protection, improving living conditions of vulnerable populations, improving social legislation and efficient use of public funds and assets of a special non implementation of the program to attract foreign investment.

One major factor in the emergence of poverty is unemployment. Creating jobs, providing training and re-training of the working population can significantly reduce poverty in the country. However, nowadays, the solution to the problem of poverty in Ukraine has quite a different nature. The central aim of the public in contemporary situation in Ukraine is to establish public control over budget spending, in order to reduce corruption rates. The Ukrainians may also benefit from the association with European Union. The association would ensure the introduction of new reforms that may change the situation in Ukraine.

Conclusion

The complicated problem that arises in Ukraine relates to the dramatic rates of poverty that are induced by many factors among which corruption takes the primary position. Earlier, the problem of poverty could have been caused by the fact that Ukrainian economy was transitional in nature. Though, it is reasonable to assume that current situation in Ukraine in terms of poverty should be addressed as soon as possible as the Ukrainian State can become totalitarian and lose its functions. The factors accountable for the rise of poverty in Ukraine encompass the government’s deviations from the true problem. In order to stabilize the situation, it is significant to pay attention to all the above-mentioned criteria. Therefore, the practical solutions to the problem of poverty exist.