Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena

INDUSTRIAL RELATIONS REFERENCES LITERATUR IN THE UKRAINE
Haarland und Niessen 2005).
In 1994 the neo-liberal programme of
reforms (embracing standardized IMF’s
policy prescriptions) was adopted under then-
President Leonid Kuchma with the assistance
of the International Monetary Fund (IMF)
and the World Bank. Neo-liberal reforms
exacerbated the structural economic problems
Ukraine inherited 14 and led to a steep economic
decline. “Ukraine is the only transition country
to have known nine consecutive years of
economic decline” (1991-9) (van Zon 2002).
The first signs of economic growth appeared
only in 2000 (Merkel 2008). Then Ukraine
showed the highest performance in Europe
with the growth of 15.8% and 12.5% in the
years 2003 and 2004, respectively (Chernyshev
2006). Meanwhile, subsidies and social
spending were reduced and wages and their
increase freezed (Mandel 2004). Until growth
resumed, official employment declined by
one-third between 1990 and 1999, given the
40% reductions in industry and agriculture
employment (Chernyshev 2006).
By 2001, three fourths of the economy (as
of 2005, 78.3%) was claimed to be private.
However, these estimations also included the
enterprises in which the state retained its share
(Franzen, Haarland und Niessen 2005). They
employed 73.8% of the total workforce (Statistics
Annual of Ukraine – 2005 cited
in CASE 2007). However, by value of
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the assets, the state and communal
authorities still retained over one half
– 54.8% - of the assets (CASE 2007),
mainly huge strategic enterprises that have been
excluded from the privatization, but which play
a significant role in the Ukrainian economy.
The Ukrainian governments were anything
but successful in developing socially oriented
responses to the economic decline. In the
period of hyper-inflation, the indexation of
wages was ceased between 1992 and 1997 15 ,
leading to a significant fall in workers’ real
wages. Even though the government regulated
wages through legally-set minimum wage, it
failed to increase it to the levels of the legally
set subsistence minimum, thus violating its
own laws. Workers’ earnings were far from
adequate 16 . Even after the freeze of wages was
abolished, both insolvent and economically active
enterprises continued to accumulate wage
debts. Wage increases driven by improved
economic performance still left one fourth of
the population below the poverty line in 2004
(Chernyshev 2006).
Corrupt and rent-driven policy making
were interrupted by the mass protest of 2004
identified under the term “Orange Revolution”.
Caused by the vote frauds during the
presidential elections, these protests resulted in
the election of expectedly more democratically
oriented President Yushchenko. Whereas his
Presidency allowed for more freedoms (not
least, media and independent union freedoms),
he has been consistently criticized for his inability
to overcome intra-governmental cleavages
and a failure to advance the socio-economic
development of Ukraine. The slight increase in
living standards brought on by the economic
growth of recent years (since around 2005) was,
however, anything else than long-term and sustainable,
as achievements were soon smashed
away by the global financial crisis. Since 2008
the Ukrainian economy, together with the
living standards of the population, entered a
downturn again.