Programme ends, poverty remains

The Accounting Chamber of Ukraine begins its latest damning report by stating that Ukraine signed the UN Millennium Declaration in 2000. The following year it adopted a Strategy for Overcoming Poverty and a Comprehensive Programme for its Implementation for 2002-2009. The final stage of this Comprehensive Programme ended in 2009, and the Accounting Chamber has carried out an analysis of its level of fulfilment. “The results showed that the objectives of the programme have not been fulfilled, the strategic directions not achieved. At al stages of the Comprehensive Programme the indicators it specified for the level of poverty were not once achieved.

As a result of unwarranted and irresponsible managerial decisions by the Ministry of Employment and Ministry of the Economy in 2008 the Comprehensive Programme lost the status of a State purpose-linked programme which had impact on its financial provisions and the effectiveness of the measures carried out.


The level of poverty in 2009, standing at 26.4 percent, was 4.9 percent higher than stipulated in the Strategy for Overcoming Poverty. Every eighth person in Ukraine was categorized as extremely poor, with the level of destitution standing at 13 percent. The promised fall in the level of poverty to 21.5 percent, and level of extreme poverty to 3 percent did not eventuate.


One of the main strategic aims had been to increase work pay, yet the analysis showed that in fact there had been a tendency for income from work to decrease, while the part of income from social benefits and other such payments had increase.  In 2008 work pay made up 43.3 percent of all income; in 2009 – 41.9 percent, while the percentage from social assistance was 37.8 and 39.6 percent respectively. In 2010 the percentage from work pay came to 40.9 percent.


In 2009 the size of real wages fell by 9.2 percent in comparison with 2008, and effectively to the 1999 level.


The Chamber says that the objectives in introducing a Single Tariff Network adopted in 2009 and the first half of 2010 had not been achieved, and government decisions had led to the destruction in the tariff system and a policy of equalization with regard to wages.


The Chamber points out that the subsistence minimum which is the criterion for formulating the level of wages and social payments is still determined on the basis of a selection of food items, goods and services approved back in 2000.  With food prices rising by 2.3 times in 2000-2009, the subsistence minimum only rose by 1.9 times. The artificially low size of the subsistence level leads to artificial reduction of pensions, pay, help for the worst-off parts of society and decrease in the real income of the population.


Despite the fact that an increase in employment and development of the employment market formed one of the main aims of the Strategy for Overcoming Poverty, there was no State programme at all from 2005. the Chamber says that this had a negative impact on creating the conditions for employment of those without work and did not make it possible to ensure balance of supply and demand of jobs, as well as the conditions for professional training.


The Comprehensive Programme envisaged moving from social benefits to addressed payments, however the measures begun back in 2003 were not completed even at the level of the pilot project.

The aims regarding housing for socially vulnerable groups of society were also not achieved.


No draft law for a General State Programme on the Development of Social Housing was completed, with work on the document only reinstated in 2010.

In 2009 poverty intensified in 11 regions of the country, with 4 regions exceeding the 40 percent mark: Volyn, Kirovohrad, Sumy and Kherson, while in two regions virtually half the population.

The Accounting Chamber believes it vital that a General State Programme on Overcoming and Avoiding Poverty in Ukraine be adopted, together with a General State Programme on Employment and General State Programme on Development of Social Housing.


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