How Ukraine became as poor as Tajikistan in just one year

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Analysis of Iran French Radio

April 16, 2015

April 20, 2015

Translated from French by Tom Winter

The start of the civil war and the disintegration of Ukraine have made this comparison both possible and apt. To comprehend the depth of the impoverishment of Ukraine in just one year, it is fair to compare certain of its economic indicators with those of Tajikistan. 

All civil wars are alike. Though the people in Ukraine started fighting each other 23 years after independence, the war broke out in Tajikistan just five months after independence, on September 9, 1991. And it was not until June 27, 1997, in the ninth meeting in the Kremlin between the Tajik government and the united opposition that the final peace deal was signed. 

Human Costs and Economic losses, Tajikistan

Just counting the years ’92 and ’93, 60,000 people were killed in Tajikistan and the number of refugees, only for 1994, has been estimated at a million and a half. According to various estimations, the economic losses were between seven to 10 billions, in dollar value. Some 150,000 houses were burned down and 15,000 houses were looted. In the Oblast Qurghonteppa in the south something like 80% of the industrial capacity was destroyed. By 1997 the industrial production of Tajikistan had fallen 72%.

Human Costs and Economic losses, Ukraine

Ukraine is just setting out upon this bloody route, but even before the Debaltsevo noose the war had caused more than 50,000 victims according to German intelligence. At the end of the third quarter, the Ukraine GDP had dropped 15.2%, not counting that of Crimea and the People’s Republics of Lugansk and Donetsk, which together represent about 20% of the total GDP.  By February 20, after the fighting in Donetsk, 90% of its industrial capacity was destroyed or idle; the destruction of homes and infrastructure is incalculable. 

And even if this is only the beginning, the Ukrainian population has already fallen to the poverty level of Tajikistan:

Pensions and Minimum Wage:

Ukraine: A retiree pension comes to 979 hryvnia (H), and the minimum wage to 1218 H. 

Tajikistan: pension and minimum wage are both at 250 somoni (S)

Exchange rate: H was 21-22 to the dollar last March, but the current rate is 26.

S is 5.53 to the dollar.

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Converting pensions and salaries in Ukraine and in Tajikistan, into dollars, we find as follows:

Pension, Ukraine: $44. (But $37.60 at the going rate)

Pension, Tajikistan: $45.20 

Minimum wage, Ukraine: (officially) $55. (But at going rate, $46.80)

Minimum wage, Tajikistan: $45.20.

For comparison, one year ago, when the rate was 8H to the dollar, the Ukrainian pension was $118, and the base wage was $152.

In September Emomali Rahmon promised to increase the minimum wage 50%, to 400 S, and to increase scholarships for the students, 30%, on average. Six billion S were allotted to this end. In Ukraine, the next increment in base pension and minimum wage is to take effect come December. The Council of Ministers in Kiev has promised to augment the pension to 1,074 H and the minimum wage to 1,378 H — but only if it is not obliged to minimize expenses in social programs [!].

Given the austerity measures imposed by the IMF, any increase in salaries and pensions appears just a likely as landing astronauts on the gaseous surface of the planet Uranus. Even if Emomali Rahmon does not fulfill his promise, the Tajiks live right now a little better than the people of Ukraine.

Migrant Workers

According to numbers supplied by Konstantin Romodanovsky, Director of the Russian Federal Immigration Service, about three million Ukrainian workers earned $27 billion in Russia in 2013. At the start of 2015, there were more than 1,300,000 Ukrainian men of military service age in Russia. In all, five to seven million Ukrainians have left their country looking for work, and in 2014, they sent nine billion back to Ukraine.

Tajik migrant workers in Russia are estimated at one to 1.2 million, and they represent 90% of all migrants out of Tajikistan. All told, they sent $1.5 billion to their families, during the first half of 2014. In 2014, the population of Tajikistan was 8.2 million and the proportion of the population of working age was about 60%, i.e. 4,920,000 people. 

The population of Ukraine was 45,490,000 in 2013. Since 2014, when the riots at Euromaidan began the process of disintegration, Crimea (about two million people) has officially left Ukraine, and the People’s Republics of Lugansk and Donetsk (the PRL with 1.2 million and the PRD with 1.8 million) have also seceded, for reasons that are plain. Thus, by large scale estimates, the population of Ukraine has fallen to 40.5 million. The proportion of the labor force in Ukraine was 48% in 2013. It follows that in 2014, the labor force was at 19.4 million (21.2 if you include the PRD and the PRL). If we make a summary calculation of the proportion of working age citizens that have emigrated looking for work (since the author of this article lacks such figures for Crimea and the two People’s Republics), it turns out that one fourth to one third of Ukraine’s labor force has left the country. In comparison, in Tajikistan, the number is right at 25%. So about a fourth of of the Tajik and of the Ukrainian population have emigrated in search of jobs. God only knows how long the civil war will last, how many victims it will carry off, how many towns it will destroy, but one year after the start of the war, Ukraine has gotten to the level of destruction caused by the civil war in Tajikistan.

Ukraine has not yet defaulted on its debt, but its base wage and base pensions have dropped to Tajik levels, even though a year ago, such a fast decline seemed inconceivable. Further, in Russia immigrant workers from Ukraine are progressively displacing those from Central Asia. And this is only the beginning. Meanwhile, Tajiks and Ukrainians have one more thing in common: they not only were part of the Soviet Union, but now they share a common fate: with their lives in ruins, they travel the world looking for work.

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