The devastating effects of the restoration of capitalism in the Ukraine

Comrade Tishchenko’s speech gives a graphic account of the devastating effects of the restoration of capitalism in the Ukraine, involving a precipitate decline in population, drastic reduction of living standards, a dramatic decline in GDP, unprecedented levels of unemployment, social degradation and destitution – all the things that the freedom-loving imperialist media are totally silent about.


Dear comrades participating in the 16th International Congress of Trade Unions.  Greetings to you all, courageous fighters for the working class.  I come as the representative of the Ukraine, a republic of the former Soviet Union, to tell you how the Ukrainian people have paid as a result of the collapse of the Soviet Union and the restoration of capitalism in Ukraine, as indeed have the workers of other republics of the former USSR.  The situation of Ukrainian workers since the restoration of capitalism  and the destruction of the Soviet Union is disastrous. Everything that was built and established under socialism has been annihilated over the last 20 years.

Under socialism there was collective, state, ownership of all means of production.  That meant that every citizen of the Soviet Union was a co-owner of industry, the land, and everything under the soil of the richest country in the world.

But then there was a counter-revolutionary overthrow of all that had been achieved by renegades hailing from the top ranks of the Communist Party who found that the socialist way of life presented a great obstacle to their own enrichment.  The slogan of ‘democracy’ was used to mask their criminal endeavours.  State ownership of the means of production was stigmatised as ‘inefficient’ and ‘bureaucratic’ by these people.  It was declared that only private ownership was advanced and  efficient.  Under the guise of seeking greater ‘efficiency’, all means of production, all land, and all minerals were privatised and violently snatched from the hands of the people, without any compensation.  Not a single cent has been paid to the average citizen by way of compensation for the privatisation of banks, factories, railways and mineral deposits.  This amounted in fact to the biggest robbery in the history of humanity.  The people gave privatisation the nickname of ‘thieve-isation’.  

Its result is that 27 ‘great families’ have appropriated the bulk of the wealth created by several generations of Soviet people.  What little these ‘big fish’ could not manage to devour was swallowed by smaller predators.  The greatest part, however, of our country’s huge economic, industrial and intellectual potential was simply squandered and went to waste.

It is no coincidence that even after 20  years, the Ukraine has failed to return to the level of GDP it achieved in the 1990s.  In 2010 it was only at 63% of its maximum achievement in the socialist era! Things could not be otherwise because the corrupt leadership, regardless of political party and orientation, acting on behalf of international capital relentlessly destroyed all the country´s productive forces throughout this period.  12 million jobs have been lost and thousands of companies have been destroyed. 

Statistics for 1996-2008 show that during that period 1,879 enterprises were bankrupted and closed down in the Kharkov region alone.  Over the following 2 years, a further 200 enterprises at least were annihilated, including the state enterprise Electrical Apparatus, which had employed 15,000 workers in Soviet times.  The few remaining state-owned enterprises are under threat, including the Shevchenko electronics workshop, the Kharkov electrical machinery plant, Proton, etc.  The huge Malyshev heavy industry workshop which previously employed 70,000 people now employs a mere 4,000.  The Kharkov Aviation Plant, which in communist times produced 2 aircraft per month, has now only managed to produce 4 aircraft in the last 6 years. 

All the enterprises mentioned are monstrously in arrears with the payment of wages – €2.45 million at the Shevchenko plant (with salaries from 2008 still remaining unpaid), €2.8 million at aircraft manufacturers, and  €1.8 million at the Malyshev plant.  The tractor-building KhTZ workshop which formerly produced over 50,000 tractors a year, employing 40,000 employees, today only produces 500-600 a year, the same weekly rate as in 1932, the year when the plant was built!  And now only 3,900 workers remain.

A mere 1,800 workers remain at the Shevchenko electronics state enterprise from over 22,000 that were employed there in 1990.  They have been driven to despair by 14 months of arrears in the payment of their wages.  On 21 and 22 March they were forced to protest, supported by activists from the NGO ‘Labour of Kharkov’ and the All Ukrainian Union of Workers.  They  blocked roads and held a demonstration through the city of Kharkov to the headquarters of the regional administration, demanding the payment of their wages. However, the head of the administration refused to come out to meet the workers, as a result of which the workers were forced to enter the headquarters, at which point three top police officers tried to arrest the organizer of the action.  It would have been better for them if they had refused to engage in such activity.  The women workers held on to these officers so furiously that I began to feel concern, and not only for the fate of their epaulettes!  Truly women are a powerful force!

Official from Kharkov province were forced by these actions to address the problems.

Processes of destruction have affected almost the whole of the eastern, industrial, area of the Ukraine.  Makeevka, the former industrial heart of the Donbas coal basin, has become an unimportant provincial town.  In recent years 20 of its 30 coal mines, as well as a cotton mill, the Skiff plant, a reinforced concrete structures plant, glass, pipe-casting plants have disappeared altogether. The metallurgical plant is still operative but employs only 1,500 workers rather than the 20,000 it employed in 1991. As a result Makeevka today has only 380,000 inhabitants, as compared to the 720,000 it had in 1990.

In Kramatorsk in the Donetsk region, its ‘Alpha’ medical and military laser equipment plant, its air conditioning plant, and two of its building contractors, ‘Donmashstroy’ and ‘Kramzhilstroy’, have disappeared.  The Kramatorsk heavy machinery plant has reduced the number of its employees from 7,000 to 800.  The Novokramatorsk heavy machinery plant (that produces mills, walking excavators, etc.) has cut its staff numbers from 34,000 to 14,000. 

The story is the same in the case of other enterprises in the region.  The Slaviansk chemical equipment plant and the Slavianskoda plant have closed.  Coke plants have been dismantled.  Over 100 mines in the area are scheduled for closure.  Workers desperate to find employment are forced to work in illegal shallow mines operated by criminal gangs, without social insurance or safety measures, risking their lives at all times.  According to official statistics there are 40,000 people unemployed.  The real figure exceeds 200,000.

In the Lugask region, 38 coal mines have survived out of the 92 in 1990. The Linos refinery and the huge Lugansk locomotive workshop have ceased operations.  At these workshops it is not even known who the owner is.

The same situation prevails in the Dnepropetrovsk region.  Here machinery is also being destroyed.  The mining equipment workshop has ceased to exist.  Yuzhmash, the massive scientific and industrial complex that once developed and manufactured the world’s most advanced missiles and space launchers, orbiting satellites and space vehicles, unsurpassed even today, has reduced the number of its employees to a seventh of their previous number.  The Dnepropress workshop has reduced its workforce to one ninth.  A system of employment contracts has been introduced here that renders any employee totally defenceless against the employer.

The situation in the Ukrainian capital looks no better.  The Bolshevik and Arsenal plants are struggling to survive.

Those plants which are still functioning are unable to provide an acceptable work environment.  For example, in the winter front the workers of the Kharkov tractor plant and the Malyshev plant had to light fires in the workshops in order to warm both the factory and the equipment.

And it is not only in the sectors of energy and defence that companies are being destroyed: such industries as machine tools and microelectronics are also affected.

It is a dreadful fact that in a country which possesses 30% of the world’s reserves of black earth, and which has the most favourable agricultural conditions, agricultural machinery is being destroyed.  The Kharkov plant for the manufacture of self-propelled tractor chassis, which had a capacity of producing 100,000 tractors a year, the Hammer and Sickle workshop for the production of engines for harvesters which used to produce 50,000 engines a year, and the Kharkov tractor engines workshop, have already ceased to exist.

The culprit has been President Leonid Kuchma.  His decrees forcing the break-up of farms have caused a level of damage beyond what even Adolf Hitler was able to achieve.  They have impacted on the whole of agricultural production and the rural infrastructure. 

For example, official statistics of the Kharkov region show that the drop in the number of cattle exceeds that which followed the  Nazi occupation: in 1990 the number of cattle in the area was 1,203,800, but in 2009 this had reduced to a mere 101,400, one twelth of the previous number.  Cows numbered 371,900 in 1990 but in 2009 there were only 40,000, i.e., a ninth of the former number.  Milk production in 1990 was 10,299,000 quintals.  Now it is only a sixth of that, namely 1,683 quintals in 2009.

The new ‘efficient’ private owners reject scientific methods of farming and crop rotation but are instead growing dollar-earning export-oriented wheat, sunflower seed, corn, canola. They are preparing a great famine for the people.  Sadly the Ukraine is now forced to buy from abroad such victuals as meat, vegetables, sugar, etc. – all products which in Soviet times used to be produced in sufficient quantities not only for consumption in the Ukraine but for other Soviet Republics also.  In those days, for example, 6.5 million tons of sugar were produced annually, but today this has fallen to 1.5 million tons.   The changes scheduled by the top state authorities that will among other things permit foreigners to buy land will be the death knell for what remains of Ukrainian agriculture.  It will be an unpardonable crime against not only the present generation but against future ones also.

An even greater injustice that occurs, both in town and country, is effected through the so-called informal, or illegal, sector.  The government admits that almost half the economy relies on the informal sector.  It follows that the employees in this sector, also more than half of the total, are almost entirely unprotected.  There are no formal conditions of employment,  their experience is not officially recorded, they are not entitled to paid leave or sick pay.  In case of injury or other disaster they receive no benefits.  They are paid in cash in brown envelopes, without any contribution being made to pension or other funds.  For informal workers, trade unions are out of the question.  In fact half of the workers in the Ukraine have the status of illegal immigrants in their own homeland.

Is it any wonder that so many years after its so-called independence the population of the Ukraine has declined by 6 million?

The result of capitalist reform has been that the Ukraine is now the European country with the lowest living standards.  The government claims it cannot afford healthcare, nor education, nor scientific research, nor military expenditure, nor housing construction, nor housing maintenance or communal services, nor support for sport or the arts.  There is no money to pay pensions, benefits, or to increase salaries and allowances.  Yet enough money was there in Soviet Ukraine to pay for all of this.

It is notorious that under capitalism trade unions lack the militancy to defend the interests of workers, always taking the side of the bosses, and thus often becoming complicit in the destruction of the enterprise itself.  One can count on the fingers of one hand the times when such unions have actually mobilised workers for action.  The current chairman of the Ukrainian Trade Unions Federation is simultaneously a member of parliament representing the region’s governing party in the Ukrainian parliament.

In these circumstances, it would be futile to expect action from such unions.  In this year’s protests against the Tax Code, or health workers’ protests demanding decent salaries, etc, no credit can be accorded to the trade unions which always collaborate with the government in power.  Trade unions have ceased to speak for working people or to defend their interests.  Therefore they will be forced either to change their behaviour of find themselves bereft of membership. In the meantime they are parasites on the contributions forced out of rank and file union members.

Where official trade unions fail, independent ones appear.  But they too are often controlled by one bourgeois political party or another.  As a result the workers themselves find themselves forced to act as protectors of employees, rights, joining together in community organisations.  One such organization is ‘Labour Kharkiv’ – a regional organisation (of which I am the chairman) and another is the Ukrainian Workers’ Union.  There are cells of these organisations at many large industrial enterprises.

It seems, however, that the current leaders of the official unions are not satisfied with the damage they have already caused.  Otherwise how could they be supporting the so-called ‘pension reform’ that is being undertaken at the behest of the IMF, raising the age of retirement and eliminating the state guarantee of pension payments?  …  How can they be supporting the new Labour Code which increases the merciless exploitation of workers by increasing hours of work and abolishing what remains of workers’ protection from the arbitrary whims of the employer, enabling workers to be dismissed without the consent of the union?  And in the government’s Housing Code, rents will be increased, with penalties being imposed giving rise to debts that will lead to people being thrown out of their apartments.  Previously all housing was given to people by Soviet Power.  This is not the case with the current Satanic Power!

Since 1992 the Ukraine has been in the grip of the IMF, obediently dancing to the tune of western capital.  As a result the Ukraine is in 6th place of nations most likely to default on their sovereign debts, its external public debt amounting to $54.6bn, while its total foreign debt has reached $111.6bn.  The Ukrainian authorities do not appear to have realised that no country in the world has, while following IMF prescriptions, ever avoided poverty or falling inevitably into the noose of indebtedness to this financial monster.

Therefore successive representatives of the bourgeois class implemented all the IMF prescriptions, resulting not only in an appalling deterioration in the standard of living of most working people but also in a loss of efficiency in production and the destruction of productive forces.  No country anywhere in the world has engaged in such a frenzy of destruction of machinery, equipment, whole factories, agricultural machinery and irrigation systems, turning them into scrap metal.  No country has so disparagingly rejected its system of training of workers.  As a result of this policy, a catastrophic aging is taken place of the workforce and the natural link between generations, the transfer of skill and knowledge,have been interrupted, which creates enormous difficulties for the future.  It is as though some evil spirit has dedicated itself to destroying the working class for good. 

This fact is not hidden. Back in 2000, the President of the French Senate, speaking to the Ukrainian parliament, set out what he deemed to be the desirable priorities for the Ukraine: metallurgy, chemicals and agriculture.  The rest, according to the bosses of international imperialism, the Ukraine does not need.  During 20 years, their lackeys, the Ukrainian officials, went beyond the expectations of the transnational corporations and international imperialism insofar as destruction of the Ukraine’s economic potential was concerned.  It should be noted, however, that the bourgeois class which developed over these 20 years, never lost sight of its own profits.  Today many members of this class have become billionaires ranking high among the world’s richest people.  There is perhaps no other country in Europe where the ratio of the income of the poorest and the richest is, at 1:40 so unfair.

But if you visited the Ukrainian capital, Kiev, you might think that what I, Tishchenko, am saying is not entirely true, or even not true at all, because you would see luxury cars costing between $100,000 and $1 million, and you find more such vehicles in Kiev than bicycles in Athens.  The bourgeoisie acquired these foreign cars with the money taken from workers.  The time will come when we are able to say; ‘Hand it all back, it isn’t yours’.  We, the representatives of the left labour movement, are upholding advanced Marxist-Leninist theory, and are well aware that the only solution for the Ukraine, its only escape from severe crisis, is revolutionary change, which is also the case for other former Soviet republics.  Paradoxically, however, society is not yet ready for such a change.

We have a great deal of work to do within the protesting labour movement to defend the gains of socialism, to fight against the injustice and lawlessness that have become commonplace in modern Ukraine!  The experience of our colleagues from around the world is certainly useful for us in our work.

Therefore, the labour movement in the Ukraine welcomes any expression of solidarity and support from the international trade union movement, in particular from the 16th International Congress of Trade Unions.

However, we understand that we have a great deal more to do.  The year 2017 will be the 100th anniversary of the greatest of all revolutions – the Great October Socialist Revolution, and it is approaching fast.  We have every reason to benefit from the experiences of our grandfathers and great-grandfathers so that we can repeat the revolutionary transformation.

Long live the global labour movement !

Long live the inevitable victory of socialism over the darkness of capitalism !

9 April 2011, Pavel Tishchenko, Ukraine.