Page last updated at 13:24 GMT, Friday, 4 March 2011

Hard times as Ukraine recovers

23-year-old Maryna Gaydak lives with her parents and sister on the sixth floor of a grey tower block on the edge of Kiev.

Maryna Gaydak
Maryna Gaydak and her mother have seven jobs between them

The Soviet-era building is run down, some of its inner brickwork is exposed to the elements and a few window panes are cracked.

It is early in the morning but two old ladies are already selling jumble on a blanket by the road.

By comparison, the Gaydak family seem much better off. But they're still finding it tough.

"We're having hard times at the moment. I work three jobs. My mum works four jobs. My dad can't find a job," says Maryna in English.

She mainly earns a living as a lecturer at the National Linguistic University in Kiev, teaching Mandarin. She also works part time for a Chinese company and has another job at a British firm.

The Gaydaks are eating eggy bread with cheese for breakfast and washing it down with strong, steaming coffee.

Like most families in Ukraine, the rising cost of living - especially food - is hurting them. Inflation is running at 9%.

"We used to buy chicken... Now the price is maybe twice or three times higher," says Maryna.

She taps the kitchen's lukewarm heating pipes and grumbles about the rising cost of the family's gas bills.

"From next month we will have to pay twice as much for all of the household utilities," she says.

Gas price hike

Market shoppers in Ukraine
Ukrainians are feeling the effects after the economy shrank by 15% in 2009

The International Monetary Fund has been pushing Ukraine to increase domestic gas prices by as much as 50%.

This rankles because a huge pipeline travels right across this vast country, transporting gas to the European Union from Russia.

The gas price hike is one of the changes Kiev has been asked to introduce by the IMF in exchange for a $15 billion bailout dating back to the global financial crisis.

Ukraine endured one of the world's worst recessions then. The economy contracted by 15% in a year.

To get back on track, the country has been given the familiar economic prescription of price rises, tax increases and public spending cuts.

Ukrainians are feeling the effects.

"It's fighting between a western way of life and the post-Soviet way of life that we still have," says Maryna.

Many Ukrainians feel comfortable with things that remind them of the country's Soviet past. But others look westwards, and hope for eventual European Union membership.

Power of protests

Tax protest in Kiev
Protesters have rallied in Kiev over changes to the tax system

One of Ukraine's most celebrated authors, Andrei Kurkov, says the country's finances need fixing.

"The financial situation of the country is quite catastrophic and the country would not be able to survive and function without IMF credits."

He says he is also concerned about the state of the country's democracy and freedom of speech.

Indeed, the US-based organisation Freedom House recently described Ukraine as "partly free", downgrading it from its previous status of "free".

But in the centre of Kiev, a few hundred protestors seem to have no such concerns.

They are demonstrating outside the Presidential palace, waving Ukrainian flags with their bold stripes of yellow and bright blue.

After a rendition of the national anthem, several of them take it in turns to speak on a loud hailer.

Vadym Mamedov
Market stall seller Vadym Mamedov has concerns about higher taxes

They're complaining about planned changes to the tax system.

"It will be a very heavy financial burden for us," explains Vadym Mamedov, who runs a market stall selling car parts.

"We will pay much more tax and earn much less," he says.

There are dozens of police officers watching over the demonstrators, just as there was at a similar rally the week before.

At the protest, there is talk of revolution. One protester is provocatively waving a Tunisian flag, just weeks after that country's president was forced to flee.

The obstacle of corruption

Ukraine's president, Viktor Yanukovych, knows only too well the power of protests.

It is six years since the Orange Revolution, a mass gathering in Kiev's Independence Square, which forced him from power after a disputed election.

Mr Yanukovych's election victory in 2010 was judged to be a fair one by international election observers.

Viktor Yanukovych
President Yanukovych insists the economy is recovering

In a BBC interview he is clear what his first priority is: "Corruption is in all branches of power in our country".

Corruption is a "significant" obstacle to foreign investment, according to the Organisation for Economic Cooperation and Development.

President Yanukovych says Ukraine's economy is on the mend and reels off a list of impressive statistics - growth is up, so are exports; the budget deficit is down and so is inflation.

"Our economy is recovering. Of course it couldn't recover on its own… For the first time since independence, in 2010 we started deep structural reforms."

The president says he is taking an axe to the civil service, reducing the amount of paperwork for businesses and liberalising parts of the economy.

These changes have been welcomed by many observers and may well create jobs and improve the lot of Ukrainians in the medium term.

But they could bring more pain first, and that is bad news for the one in three in this country who lives in poverty.

That leads some, like Andrei Kurkov, to predict a repeat of protests, similar to those of the Orange Revolution in 2004, but with one crucial difference.

"It will not be a political uprising. It will be an economic uprising," he says.



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