Monday, August 8, 2011

Corruption, Larceny, Economics, and American Envy in Eastern Europe (Ukraine)

We continue our discussion about Ukraine with our distinguished panel ... (here is part I if you missed it)

Me: Okay, I want to turn the discussion away from women, which is the primary reason most men make money, or really, do anything ... to economics and money of the Ukraine. Now, the Ukraine broke away from the Soviet Union in 1991, tell me about that.
Anna: Families used to be far larger. But chaos brought on in the 1990's created so much uncertainty, most couples had only one child. I am that child.
Me: What happenned?
Kos: Well, the evening the Ukraine declared independence from the Soviet Union, Moscow withdrew all the gold that was backstopping our currency. Overnight, paper became worthless. 
Dmytro: People that had saved up and were on the verge of purchasing a car for cash, might be able to buy a only decent dinner with the value of their left over paper. Entire life savings were wiped out that night. No one had any money whatsoever. 
Kos: Weapons that were in the hands of the army were sold cheaply for gold. There was no one to report to, their commanders were back in Moscow.
Viktoriia: Almost everyone was starting from zero. Mass poverty throughout the nation.
Anna: Without law and order, crime rose to catastrophic levels.
Viktoriia: You couldn't step foot outside without fear that some thugs might pull you by gunpoint into their car, rob you, put a bullet in your head, and toss your body in the river.
Kos: That was especially true if you were any sort of businessman, like my Dad. He was worried every time he went out that he wouldn't return. 
Me: And what does your Dad do?
Kos: Wholesales wheat, and makes bread. 
Me: And they were going to kidnap him??
Kos: They would kidnap whoever.
Me: So what happened? I have felt pretty safe here so far.
Kos: The criminals realized they would make more money in politics. They vacated the streets, and used their ill gotten money to buy the capitol building.
Viktoriia: Talk about a good investment.
Anna: My Dad is ex-KGB. In the 90's, he was chasing after these guys, after a while, he was reporting to them.
Viktoriia: Now they rob the entire public at once, instead of an individual at a time.
Dmytro: 20% VAT and the majority of it ends up their pockets.
Kos: All the money that is supposed to go to state sponsored medicine--
Viktoriia: -- And the medicine cabinets and supplies in our hospitals are completely barren.
Kos: And do you know how hard it is to run a business, what you have to contend with?
Me: Tell me.
Kos: First of all everyone is looking for a bribe. You are working for the police, for the local officials, for whoever thinks they can shake you down. 
Dmytro: My friend opened up a very small amusement park for children. he had to pay off the cops, the local politicians, everybody comes with their hands out. Then, when he thinks he is finally ready to open up shop, after forking out a lot more than he originally bargained for,a priest from the nearby church comes and tells him that his kid's fun park is too close to his church. He has to pay the guy $200 extra.
Me: The priest?
Dmytro: The priest!
Me: And if he hadn't?
Dmytro: Then the priest would have organized boycotts, protests, complained to the local authorities with the "will of God" behind him.
Me: Jeesus.
Dmytro: Exactly.
Kos: And then the government institutes price controls. After they rob you, they tell you can't raise your prices, and if they catch you, then you have to pay more out in bribes/fines, which are really the same thing. The only way my Dad could eke out a profit was to cut costs bare. When the price of wheat rose, sometimes he was losing money selling bread to the public. Then the Ukranian version of the IRS comes to look over his books. He opens them up. What they want is a bribe to go away. My Dad said "fuck that" look over my books. They spent 28 days, 28, investigating his bakery books. Finally my Dad got fed up with it and asked them if they wanted to take over his office cause spent more time there than he did.
Me: Did he pay the bribe?
Kos: No, he stuck to his guns, and eventually they went away.
Dmytro: It's is hard here. Very hard to have a business.
Kos:  And for foreign investment. Almost impossible. You have to have so much money and contacts to even consider investing here. In fact, without them you'd be absolutely crazy to.
Me: Why?
Kos: Let's say you and I wanted to start a hotel, a serious investment which takes a lot of planning, money, and a ten year forecast. So we get the financing together, we bribe all the necessary officials, we get our deed to the land, and we start work. A year later, our hotel almost done, some local "businessman" shows up with the exact same deed to the land, only it says it is from one day earlier than ours. We go to court with all our documents, evidence, and high priced lawyers, but it makes no difference, we lose the case and our investment. The government, the lack of certainty and rules, makes it impossible to create any serious investment.
Me: So not only does the government steal money directly from the population, but via the selfish graft and corruption of public officials, and the implausibility of doing business it creates, the average Ukranian citizen is robbed their opportunity of better employment.
Kos: Exactly.
Me: Now that's tragic ... So what are the good jobs someone can have?
Viktoriia: Anything in the private sector. The last place you want to be working is for the government. Preferably you're working for a foreign company rather than a domestic one.
Me: And what is a good salary to be making?
Dmytro: The average right now is about $500 a month. If you work for a foreign, private company, you can make up to $2,000 a month. That is a really good salary.
Maria: As a translator, there are days that I will make what is really good money for us, like $150, but there are many days where I will be have no work.
 Kos: But if you really want to make money, you get into government. Not working for the government mind you, but running it. A place where you can take bribes. Our ex-leaders are billionaires, all money stolen from citizens.
Me: You said the medicine cabinets here are barren. In America, being a doctor generally pays well. What about here?
**Everybody laughs**
Me: What's so funny?
Dmytro: As a doctor you work for the government, the worst job you can have.
Kos: A doctor's salary is $300 a month.
Me: $300 a month?! For all the work and expertise that it takes to become one? I took Maria out to a dinner that was like $60 for two people, which isn't cheap even by standards in the US. And a Ukrainian doctor, cannot come close to affording that!
Dmtryo: No, they cannot.
Kos: Of course, doctor's salaries are always augmented with bribes.
Viktoriia: Medicine is supposed to be free in the Ukraine. but you go there, everything has a price.
Dmytro: There is the stated price for something, and the actual price. Everybody pretty much knows what something really costs.
Viktoriia: And you generally have to know someone to have something done. The more people you know, the cheaper things usually are. "Oh you know Kos, okay we can talk ..."
Me: What about education here? 
Dmytro: Same thing, teacher- government job. $300 a month with no room for advancement. Only the stupidest or the most golden hearted people even consider going into the teaching profession because you simply cannot survive on the salary.
Kos: Which doesn't give future generations much hope as it stands now, cause it's hard to have a golden heart when you cannot even feed yourself.
Me: Geez. I feel so lucky to be born in America.You guys have been to America, what did you think?
Kos: I would LOVE to build a business there. Business is like a marathon here, all uphill, at high elevation, with no oxygen, with Russian bears running after you trying to take as big a bite out of you as they can. And when you cross the finish line, you're lucky if you get $100 as your prize. In the United States, comparatively, you run a leisurely 5 kilometer race with people handing you water as you go, and all you have to watch out for is a couple pebbles on the ground. And when you finish, everybody cheers, and a million dollars worth of gold falls from the sky.
Me: I don't think that's accurate.
Kos: I said comparatively. In the US, you get rewarded so much more, for the same efforts.
Me: Well, that's pretty hard to deny. Anna you've been quiet, what do you think?
Anna: I shouldn't say.
Me: Go ahead.
Anna: I think the US profits off the blood sweat and tears of the rest of the world. Your people are fat and lazy, and expect everything, and wish to contribute nothing. The US is a parasitical regime feeding off the other countries. And I think for the views most Eastern Europeans have towards America, that is euphemistic way to put it.
Me: Wow. Come on. Euphemistic? I'm going to tell you this Anna, there are really hard working Americans.
Dmytro: Viktoriia and I work for an American company. We net $1,500 each a month, which makes us upper middle class for the Ukraine. We are grateful for the opportunity we have with the company, but I will tell you this, in the Ukraine either you work or you don't have food on the plate.
Me: Wait wait you guys want me to apologize for the little social safety net America has?? Seriously? One, what's wrong with it? Two, assuming you believe there is, are you going to find fault with Scandanavia? Three, are you serious?
Anna: We work so hard for so little. You can be so educated, so smart, and if you stay here and take an honest job, you will never make as much money as a union factory worker in America.
Me: Anna, that might be true. But blaming the American people for the fact that other countries have utterly corrupt governments who steal, who deprive their citizens of the opportunities that they deserve, is not the fault of the average US Citizen, who also wants to lead a prosperous, nice life. Let's end the conversation there ...

I hope this gives you a flavor of life in the former Soviet Union. 

(here is part I - about dating, clothes, and prostitution in Ukraine if you missed it)

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  1. Good dialog! (with accents and all!)
    Maybe Anna was referring to the effects of American foreign policy?



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