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Tuesday, December 6, 2016

Citizens of Ukraine are forced to save even on bread


More and more Ukrainians begin to save on the Essentials. Kiev is ready to stand for hours in the cold in line for bread, in order to save five rubles. It seems that Kiev plunged into the familiar to Russians 90s, when the cost of bread is seriously dependent on the family budget. The picture is similar to the period of decline of the USSR.

“Swept the bread literally half an hour after delivery and before an hour later freezing in the queue,” says TASS Kiev pensioner Stepan Spindoc. Says 70-year-old Tatiana Kovalenko, it is ready to freeze for hours just to buy a couple of loaves at a lower price. “In the supermarket loaf costs about 6 USD, and here is a little more than 4 USD. And often it is hard in the shop, and there are always fresh and warm,” – said the pensioner. According to her, her pension does not exceed 1.5 thousand UAH (4.5 thousand). “So you have to save on everything” – sadly she said.

“Ukrainians face not even poverty, the real poverty, and their struggle for survival becomes more desperate”

Bread lines began to appear after December 1, the main producer of “Kyivkhlib” increased product prices by 5-15%. The company supplies products and the capital region. Rose not all the bread: social grade is given at the same price, and it is for them and queues.

How much?

In “Kyivkhlib” explained that if you do not raise prices, then production will simply stop. The first round of rise in price of bread, which occurred in February of this year, it is not enough for the survival of the enterprise. Since the cost of production of bread on the background of economic recession and 40 percent inflation again rose sharply. “In recent years the trend has been towards an increase in the cost of flour, the specific weight of which in the cost structure takes up 40 percent, and also other components, namely gas, electricity, other raw materials (sugar, oil, yeast, salt), at the legislative level, increased minimum wages,” reads the official statement of “Kyivkhlib”.

The most expensive Ukrainian capital hearth bread (0.95 kg) – 6.90-7.92 UAH. In recalculation on the Russian money, the price rose from 20.3 to 23.3 rubles, i.e. the growth amounted to three rubles. Wheat traditional hearth (0.65 kg) instead of 5.64 UAH became cost 6.24 UAH (or 18.4 rubles, an increase of 1.8 rubles). Least expensive baton “Rifled Kiev”: from 5.34 to 5.64 UAH UAH (up to 16.6 rubles, an increase of 90 cents).

Now the demand for so-called social grades of bread, which “Kyivkhlib” can’t raise prices. This includes Ukrainian homemade bread at a price of 5.25 UAH (15.5 rubles), wheat Kyiv – UAH 4.05 (11.9 rubles) and a loaf of normal – 4.19 UAH, or 12.4 rubles.

It is for this bread and hours are poor people of Kiev. The problem is that this is not appreciated by social bread can not everywhere, but only in special kiosks “Kyivkhlib.” The company from the beginning was to install them all over Kiev. Now there are about 130 pieces, but it is for the impoverished people of Kiev, especially pensioners, is not enough.

Moreover, for the purchase of social bread you have to go to a special shop, and bring it early and clearly in the wrong quantity, to ensure that all those in need. Importation of bread in kiosks occur three times a day: at 8.00, 14.00 and 16.00. But people complain that the morning bread in kiosks arrives in 8 hours, and closer to 10, so you have to wait long. Not always enough for everyone.

In the spirit of the 90s

“Given the sharp deterioration of the economic situation in Ukraine and times of falling real incomes, changing consumption patterns. In a situation when the economy enters a tailspin, similar structural changes would be observed in any country of the world,” – said the newspaper VIEW, the former Minister of agriculture of Russia Elena Skrynnik.

In such conditions, she said, sharply increased the demand for basic foodstuffs – bread, pasta and milk, as they replace the meat and fresh vegetables. “For socially vulnerable layers of the population, the rise in prices of such products, even for a ruble or two, if there is no program support from the state, is significant. The attempt to control the price logically leads to the disappearance of products from the shelves – that occurs now in Kiev. All that we saw in the era of the twilight of the Soviet Union”, – said Skrynnik.

It would seem that the price difference is not very large: ordinary bread in a simple store in Kiev can be purchased from 16.6 to 23.3 ruble, and social bread 130 speciosa – at the price of 11.9 to 15.5 rubles. The difference is only 5-8 rubles. However rapidly impoverished Ukrainians, this seemingly small difference is very sensitive, so how much impact on the family budget.

If you buy a loaf a day for 7 hryvnia, the average salary in 6 thousand hryvnias, the cost of bread to the salary of more than 3.5%, if two loaves of something more impressive 7%, said Mikhail Krylov from the IR “Golden Hills-Kapital”. “The weight of bread in the consumer basket is 6-8%, so for Ukrainians, it is not a cheap inflation,” he says.

If you look at an angle to the needy citizens of Ukraine – pensioners and those who receive the minimum wage, the situation is even more disastrous.

So, the minimum wage in Ukraine is only 1378 UAH (or 4060 roubles), the minimum pension – 1074 UAH (or 3165 rubles), and the average pension is UAH 1100 (or 3200 rubles). For comparison: in Russia the minimum wage – 5965 rubles, the minimum pension – 6354 ruble, while the average pension in Russia is much higher – 12 400 roubles (according to some estimates, above 13 thousand rubles). No wonder the Russians are quietly buying more expensive bread in supermarkets (25-30 rubles per kilogram, according to “Tsenomera”) and do not stand in line at the bakery plants.

Caring for the citizens

On the one hand, the Ukrainian authorities formally comply with the social care of the citizens. So, this year had increased pensions, minimum wage. However, this is a symbolic increase does not cover even partially the galloping rise in prices of products of food and housing services. According to official statistics, inflation in 2015 will amount to 43%, the minimum wage in September grew by only 12% (from 1218 to 1378 UAH).

This difference by raising the minimum wage will go just to compensate for the difference in price of bread, says an economist, “the Ukrainian choice” Alexander Koltunovich. “Paying all the taxes and fees, and ordinary citizens of Ukraine receive no 1378, and 1108 hryvnia. For the money, not paying utilities, which generally exceed the level of wages, not buying medicines, food and necessities, you can buy as many as 139 loaves of bread, or 4.5 loaves a day,” says Koltunovich.

Recall that in Ukraine on the recommendation of the IMF, the tariffs for gas, water and electricity has increased over the past two years at times, and they planned to increase further. Even seemingly twofold decrease in the price of imported gas (due to the fall in oil prices) did not affect the cost of utility services for Ukrainians.

Earlier, Alexander Koltunovich has estimated that utility bills for a Studio apartment in 2015 increased to 780 UAH per month for one bedroom – up to 1230 UAH, two – room- 1850 UAH. And this despite the average pension to UAH 1,100.

The following year, the Ukrainian authorities plan to show exactly the same nominal care of its citizens. In the budget for 2016 I want to capture the gradual increase in the minimum wage by the end of next year in the amount of UAH 172, or 12.5%. Officially, the national Bank, of course, promises inflation at 12%, but economists are waiting for next year, probably 20-30%, if not more.

This means that the growth of salaries, pensions and benefits next year will be at least two times below the rate of inflation, says Yuri Medvedchuk “Ukrainian choice”. “This means that Ukrainians face not even poverty, the real poverty, and their struggle for survival becomes more desperate. And the 2016 budget, in fact, the law establishes it. It should be noted also that in 2016, the planned growth of budget revenues by 17%, but the growth of incomes one-third lower. This is further evidence of the antisocial policies of the current government,” adds the Ukrainian public figure.

It is worth noting that the IMF can still cut the forthcoming increase of salaries and pensions, and Kiev meekly accept it, as always.

The IMF representative in Ukraine Jerome Vacher on Friday said bluntly about the risks to continue the country’s lending Fund. “The risk that can be accepted by the budget, which is not consistent with the objectives of the IMF programme and which will be laid down policy, we do not support,” – said the official in an interview with “UKRINFORM”. So far the recommendations of the IMF consisted in sharp reduction of budget expenditures and increasing revenues. In practice, this results in a tightening of the fiscal burden not only on businesses but also citizens.

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