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Income gap deepens economic crisis in Ukraine

February 29, 2012, 16:13 UTC+3
According to Ukrainian parliamentarian Anatoly Kinakh, the income of the richest is five to seven times higher than that of the poorest in the United States, while in Ukraine this...
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KIEV, February 29 (Itar-Tass) — Ukraine must “consistently and in a civilized manner” overcome an enormous gap between the rich and the poor, which “aggravates the financial and economic crisis,” Prime Minister Nikolai Azarov said at a government session on Wednesday.

The prime minister emphasized that the existing situation is one of the major risks for the development of the country along with a high debt burden, limited accessibility of financial markets and “an enslaving price of Russian gas”.

The prime minister said that the Ministry of Social Policy had already received the task to develop the mechanism “of a fair distribution of incomes” under which low incomes of people must be increased, while super-profits of Ukrainians must be “redistributed in the interests of the society”.

Besides, Nikolai Azarov criticized the system of benefits and targeted assistance to citizens. “Research of our scientists confirms that ten percent of most poor citizens of Ukraine get only two percent of the total amount of social benefits, while ten percent of most well-off citizens receive 22 percent. This is a paradox. This is a vicious system. We must do away with this absurd situation,” Azarov stressed.

He said the Ministry of Social Policy must analyze “all levels of social support we have and consider how to simplify and modernize this outdated and tangled system”. For example, rich people must not pay for gas or electricity at a reduced fare, he explained.

Earlier, the director of the Institute for Demography and Social Studies, Ella Libanova, noted that the population of Ukraine is “poor on the whole”. “There are about nine million households in Ukraine with the income of 2,000 hrivnas (250 dollars) per person. The poor population is very sensible to super-profits,” she said.

According to Ukrainian parliamentarian Anatoly Kinakh, the income of the richest is five to seven times higher than that of the poorest in the United States, while in Ukraine this figure stands at 40. He believes that if nothing changes, “a revolutionary situation” may emerge.

At the same time, the Institute for Economics and Forecasting at the Ukrainian National Academy of Sciences, the incomes of the rich exceed the incomes of the poor by a factor of nine, which is an average figure as compared with other states. However, according to the State Statistics Committee, about 85 percent of Ukrainians considered themselves poor at the end of 2011. An average salary in Ukraine as of January 2012 was about 2,700 hrivnas (338 US dollars).

 

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