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A Sketch of an Older Ukrainian

By Dmytro Komshyn, Global Action on Aging

October 10, 2003  

Ukraine is located in southeastern Europe , and its largest neighbors include Russia , Poland , Romania and Byelorussia ( Belarus ). The country has about 49 million people in an area about the size of Texas , making it the biggest European country next to Russia and Turkey . The population has been shrinking in the last few years, decreasing by almost 3 million people from 1991 to 2003, and the average age is getting older. Today people over 60 comprise more than 20% of the total population and in the next decade this number is projected to increase by 9%.

With the exception of a short period before 1920, Ukraine had been dominated by its larger neighbor, Russia , for centuries before the former Soviet Union broke up in 1991, making Ukraine an independent state. Although the fall of communism led to freedom of speech and religion, it was disastrous for the Ukrainian economy. Many towns have an unemployment rate in excess of 50 percent. The standard of living for most citizens has declined by more than 50 percent since the early 1990s. The larger cities have some evidence of economic growth, but severe poverty plagues not only the cities but especially the countryside and villages. However, while Ukraine was among the poorest European nations in the mid-1990s, the country has enjoyed a steady 5-6% growth rate in the last four years. The lives of Ukrainians are improving and many people are happier now than 13 years ago, but a large part of the population still lives below the poverty line. Most of these people are elderly.

The collapse of the Soviet Union disproportionately affected the senior citizens of my country. Older persons’ life long savings disappeared due to inflation rate up to 10000% a year at its peak in 1993, most of seniors lost their jobs due to severe competition with younger people, and those who were on a state pension received virtually nothing. The USSR pension system was accumulative and relied heavily on the state, but Soviet pensions were relatively sufficient for a comfortable standard of life. Today the average pension is slightly above 35% of the average salary; in USSR those numbers were almost the same. However, the Soviet government provided pensions above the minimal Monthly Maintenance Rates (MMR), and in the 1990s the pensions were two times and a half below the Monthly Maintenance Rate. After the break up of USSR , the survival of retired people was left in their own hands. The Ukrainian government tried to improve the situation, but due to lack of budget funds it could do nothing. The economic growth of the last years made it possible to increase the pensions in Ukraine , but the old pension system, based on the Soviet scheme, could not provide enough flexibility in the constantly changing demographic and economic environment. According to the latest data, the average pension in Ukraine is about 30-35 USD a month, up from 6 USD in 1995. The country still provides free rides for the elderly on all public transportation including railways, but the number of privileges for the elderly is declining. Ukraine is transforming into a market economy where additional social costs are difficult to budget properly. One might ask, how have older people managed to survive through the worst years of transition in Ukrainian history with their 6 USD pensions?  That is not an easy question to answer, taking into account the fact that 95 percent of senior citizens became poor after enjoying a middle class life in the Soviet era.  

Let me tell you a story of someone who still lives in Ukraine and who went through the process of becoming a poor senior citizen. Her story is typical for millions of elderly Ukrainian women and men.  

Galina, in her mid 60s, lives in the suburb of the Ukrainian capital, Kiev . She has been working as a teacher in one of the state secondary schools. Galina was devoted to her work, having served in the same school for 35 years. The fact that she had non-stop employment at one place has entitled her to a higher-than-average pension compensation when she retires. Galina was sure that her pension would allow her to have a quiet life in her own apartment after leaving her job. She also had her personal savings in the Soviet Savings bank, and she was going to help her children financially to adjust to adult life.  

At the beginning of the 1990s, her plans changed radically. The inflation in the country ruined the expectations of millions of people, as their bank savings turned into nothing. Galina was planning to buy a new apartment with her substantial savings, but suddenly all of that money was worth only a table and chairs. When she turned 55, she could officially retire (the retirement age is 55 for women and 60 for men). Galina lives in the area contaminated by radiation due to the Chernobyl disaster, as millions of other Ukrainians, and the state allows early retirement for the victims of the disaster (50 for women and 55 for men). However, Galina continued her work so that she could be useful to her two children, one of whom was a university student and another a beginning lecturer at the technical university, receiving a salary less than her monthly wage. At that same time, Galina lost her husband. It is worth mentioning that Ukrainian men were affected more than women by the collapse of the Soviet Union . Men live 61 years on average, down from 66 years 13 years ago, for women, life expectancy dropped to 73 from 76 at the beginning of the 1990s.  

As much as Galina wanted to continue to work at her school, she felt that she had to leave. Young teachers needed jobs, and they had no other sources of income, as she did with her then-miserable pension and school salary. Practically free housing, utilities and subsidized food became the memories of the past. Her pension comprised 70% of the monthly utilities bill, and she had no way out. While young people were enjoying freedom and new possibilities, Galina could not compete with them and their knowledge of foreign languages and computers. She had no phone in her apartment and was watching a black and white TV-set. Stranded with their own problems, her children tried to help her but it wasn’t enough. At that time, millions of elderly were in despair and were bitterly nostalgic for the old Soviet times.  Life was getting worse and worse.  

Galina and older people like her did not have enough money to buy food, so the only way to survive was to get food by some other means. The state gave anyone who was willing a chance to grow gardens for vegetables, fruits and potatoes. Former, teachers, doctors, engineers suddenly became farmers. The areas around big cities turned into endless small fields. Dachas (summer houses) that were mainly used for recreation activities in Soviet Union now turned into small farms. People in the rural areas left state collective farms and started to learn again how to run private business, grow cattle and poultry, and sell their own products. The country that had previously a rural population only around 26% became a garden again. The “breadbasket of the former Soviet Union ” could not feed its own people, but now people did not rely on the government for food. Instead of going to seaside or mountain resorts as Galina used to, she went to the forest to pick berries and mushrooms with her neighbors and friends. She learned how to sell food extras on the local market and how to exchange her harvest with her neighbors. But she saw her former colleagues from the Education or Health departments begging on the streets or collecting empty cans from the garbage bins. I still remember a neatly dressed old lady crying in the supermarket. She was standing in front of the glittering glass and kept saying, “I do not remember how butter tastes.” Even tiny pensions were delayed for 3 or 4 months. The electricity supply was regulated and there were endless nights without electricity even in winter. The hospitals were asking patients to bring their own medications and food. The elderly became outcasts in society. That was Ukraine in the 1990s: the center of Europe , the most industrially and agriculturally developed former Soviet Republic .  

People, and especially the elderly, had no choice but to work, either in their small gardens or selling things on the market. Spring, summer and autumn were dedicated to working in the suburban fields. If one happened to travel around Ukraine at that time, one could see numerous people working in those tiny gardens along the highways and railroads. The old “family help cycle” has changed, but its core remained untouched: elderly fathers and mothers kept providing food to their children. In turn, children became able to assist their parents financially. The country was slowly gaining its strength again. Galina decided to take a low paid part-time job at a school for children with health problems. At the end of the 1990s when production started to rise, fewer and fewer people wanted a job within the social or state system. The situation was changing: the same schools that did not want Galina to work when she retired now did not enough teachers and asked her to come back. However, Galina seemed to enjoy her new lifestyle. She had her little work at school and she had her garden. 

Recently, many old people have left their gardens and  working children are earning enough to assist their parents. Ukraine introduced compensation packages for the retired and low income families to pay for house utilities. Due to a huge transformation in the agricultural sector, food became more affordable. Galina kept her garden, but grows fewer tomatoes and potatoes and more flowers and strawberries. She can afford most basic food, but her garden allows her to save money. Growing her own food is not a matter of survival any longer.   

Galina survived the worst period of her life, but there are other elderly who have nobody to rely on except for themselves and the state. Their bad times are still not over.  

Ukraine is struggling to increase pension payments, and every year people see those small additional payments. Ukraine will begin a pension reform program in 2003 and 2004.  Instead of a unified state pension fund, there are plans to introduce three levels of pension provision: solidarity or state system, accumulating or savings insurance system and non-governmental pensionary provision or personal savings.  

Galina hopes that her 35 years of work will be rewarded by the state one day. At present, her pension does not differ much from the other age pensions, i.e a pension for those who did not work nor had a shorter working experience. She still hopes that one day she will discover that she is not poor anymore. Yet, some of her friends will never see that time.  

The Ukrainian government has adjusted the lost savings of its citizens in the former Soviet Savings bank. Two years ago the first adjusted amounts were paid to persons over 90. The government increased the pensions to 50% of the monthly MMR this August. The government started to increase pensions by 4% to 10% for every extra year worked over the retirement age. The pensions are calculated not by the salary of the last 5 years worked (in our case those were inflated amounts) but by any 60 calendar months of payments throughout the whole work experience. Some pensions for government workers, former military and victims of Chernobyl have been increased, and they are higher than the average wage now.  

Galina may be considered to be lucky. She was a highly educated professional. Her children were always there to help her, and she kept her links with the local community. Many retired Ukrainians had neither family nor adequate work experience. Some lived in huge apartment blocks, away from the gardens and community support. Some were abandoned by everyone in the remote forest villages. Some struggled with health problems.  

But, at least people like Galina have hope for better times. She worked hard her whole life and she, as well as millions other Ukrainians, deserve to see their dreams come true. 

 


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