Voices from Russia

Tuesday, 13 January 2015

Ukrainians Can’t Afford Medicine or Meat… Have World’s Worst-Performing Currency

00 rich man hitting poor man. 26.09.13

If you approve of the Republican Party’s loud support of the Ukrainian junta… this is what you approve. That’s what “Pro-Life” truly means…

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Amid skyrocketing inflation and a 50 percent plunge in the grivnya, many Ukrainians can no longer pay for basic needs

Valentina is thankful for the two pensions that she and her husband share, even if Ukrainian inflation shock means that they’re no longer enough to buy medicine and meat. The 72-year-old pensioner said as she made her way through the city of Zhitomir, a two-hour bus ride west of Kiev, “We have some potatoes, tomatoes, and cucumbers from our dacha. I can’t imagine how people survive on a single pension. We can’t even go to the drug store. We try to use herbs instead”.

From Lvov, near the Polish border, to Kharkov, 1,000 kilometres (622 miles) east in Russia’s shadow, Ukrainians are grappling with the world’s worst-performing currency, inflation that’s rocketed to 20 percent, and the deepest recession in five years. The plight of Zhitomir’s 270,000 residents shows how bailout-mandated austerity and the strains of an eight-month insurgency are playing out in everyday life. Across the street from the city’s Soviet-era department store, the central open-air market sells food, clothes, and toys. Traders huddle next to signs offering to buy pumpkin seeds, nuts, rabbit pelts, feathers, and beans from producers who’ve travelled from nearby villages. Locals are cutting back because of this year’s 48 percent plunge in the grivnya, a decline that’s eroded purchasing power. The inflation rate spiked to 19.8 percent last month as the currency’s slide boosted the costs of imported goods from gasoline to fruit.

From the window of her 2-square-metre (22 square feet) kiosk, where she sells toothpaste and shampoo, Tamara Yakovets, 46, said, “I feel the grivnya devaluation everywhere. My clients are shocked. I have to raise prices every week. People stopped buying expensive stuff and now they ask for the cheapest soap”. Today, Central Bank Governor V А Gontareva said that inflation would probably speed up to 25 percent this year, compared with the 19 percent forecast earlier. Ukrainians are no strangers to inflation. Price growth peaked at 10,256 percent in 1993 as the Soviet economy melted down. Having subsided, the rate jumped to 31.3 percent in 2008, shortly before the grivnya last sank. The focus is on the currency again. Aside from imports, often, expenses from renting an apartment to buying a car are in dollars, while salaries are in grivnya. For Irina Ivanchuk, even a wage in grivnya would be a relief. Since losing her job this year, she gets by on her husband’s military stipend and assistance from relatives.

The 29-year-old mother of a boy in first grade said, “I watch the dollar rate all the time because for me it’s the best indicator of poverty. I buy less sweets and fruit because of the astronomical costs. We used to save some money. Now, we can’t save anything”. Data compiled by Bloomberg show that the grivnya rebounded to 15.18 per USD as of 13.23 in Kiev. It gained about 4 percent since 11 November. Adding to the burden, the government is raising the price of natural gas to meet the terms of a 17 billion USD (1.03 trillion Roubles. 105.5 billion Renminbi. 1.06 trillion INR. 20.1 billion CAD. 20.9 billion AUD. 14.4 billion Euros. 11.3 billion UK Pounds) international bailout. Whilst that’d stem the drain on state funds from subsidies, it’s putting pressure on households as heating and power costs jump.

According to Aleksandr Valchishen, chief economist at Investment Capital Ukraine in Kiev, the cabinet must address declining living standards in battling an economic contraction that the Central Bank estimates will reach 7.5 percent this year. He said that spiralling prices are as much of a threat to order as and the conflict in the eastern Donbas, noting, “Inflation is the same as the war. It may lead to protests if people blame the authorities for failing to conduct proper policies”. The government promised to help the poor pay their utility bills; it’s expanding a programme to boost the number of households covered to 4 million from 1 million. In July, the World Bank approved a 300 million USD (18.1 billion Roubles. 1.86 billion Renminbi. 18.7 billion INR. 355 million CAD. 369 million AUD. 254 million Euros. 199 million UK Pounds) loan to help the Ukraine widen assistance to the vulnerable and socially-excluded.

Some Ukrainians are prepared to stomach the economic pain as a cost of leaving Russia’s orbit and aligning with the EU. President (sic) P A Poroshenko signed a political association and trade pact with the 28-member bloc, a key demand of the protesters who toppled his predecessor in February. Anna Grigorievna, 67, a teacher at a culinary college who backed the protests’ anti-corruption message, said, “I’m ready to tolerate the current economic situation as long as the war is on. I won’t go onto the streets tomorrow because of inflation and the devaluation but my patience isn’t infinite”.

Others are less understanding. Valya, a pensioner who declined to give her last name, said she’d just bought 2 kilogrammes (4.4 pounds) of grain that should last a month, along with potatoes and beetroot from the market. She doesn’t drink alcohol or smoke, but she can’t afford the bus to visit relatives’ graves in Lvov Oblast. Valya, 76, referring to a slogan of the street uprising, said, “Glory to the Ukraine? Glory for what? Higher prices? The war? We’re just tolerating the authorities”. Ending the war, where a two-month truce hasn’t stopped the killing, is key for Valentina, who’s already living without medicine and meat. With pensions flat as prices increase, everyone’s feeling the pain that’s forced her to cut back. She said, “This is how we survive. The main thing we need is peace”.

20 November 2014

Darina Krasnolutska

Bloomberg.com

http://www.bloomberg.com/news/2014-11-19/medicine-and-meat-out-of-reach-amid-ukrainian-price-shock.html

Editor:

Let’s keep it simple. The American economic programme in the Ukraine is evil. It’s intent to smash down ordinary people so that the Affluent Effluent gets more “return”… that’s why I oppose Potapov, Dreher, Whiteford, and Paffhausen so bitterly… they’re enthusiastic and willing cheerleaders for the objectively evil Republican neoliberal agenda. “Pro-Life?” I think not!

The parallels between the contemporary Ukraine and Guomindang-ruled China just before the Communist victory on the mainland are eerie. The economy is in similar freefall and the army is falling apart in similar ways. The inflation will get far worse and the army will simply melt away. I see nothing else… the EU and the USA can’t rescue the Uniate project. Remember, the present junta is illegitimate and illegal… the legit President of the Ukraine is STILL V F Yanukovich… for all of his corruption, he was the MOST honest President that the Ukraine ever had, and he protected the canonical Church. That’s why the Uniates hate him… he opposed their perversion of history and he opposed their proselytisation project. They have an agenda… never forget that.

BMD

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