Cover Story

Semi-liberated capitals

"Semi-liberated capitals" Continued...

Issue: "The new urban frontier," March 9, 2013

Vainienė  said she’s paid attention to our U.S. debates over Obamacare and come up with a decidedly pessimistic prediction: “U.S. healthcare in 2020 … people give people bribes, holding their envelopes … waiting in line and dying.” Everyone wants access to healthcare, but Lithuania, like other countries, shows what can happen when government promises too much and can’t deliver. 

The problem isn’t unique to Lithuania. Ukraine’s capital, Kiev, has no Old Town/World Heritage Site: World War II battles largely destroyed the city’s center. Some Soviet construction gracefully took after the old, but many new, concrete buildings are ugly. So is the healthcare system.

One story from Ukrainian Ph.D. student Anatolij Babinsky: When his wife had a caesarian section, he had to offer financial “gifts” to nurses, attendants, and doctors. While she was in intensive care, the pediatrician wouldn’t even check the baby, and nurses would not bring the baby to his wife, unless Babinsky paid extra. He believes bribes are wrong, but he paid up: “When it’s your wife and child, you want to see them in good health.”

Ukraine, of course, had Soviet rule for 70 years, and before that the tyranny of the czars: Such a legacy is hard to shake. When liberation miraculously came in 1991, those with governmental power sold state-owned industries to their pals, who became rich. The result, according to Andrei Barkov, managing director of Nadiya Ukrainy, a HOPE International maker of micro-loans: “Huge industrial operations privately owned by guys who wear Versace and have a dozen mistresses.”

Ukraine’s crony capitalism is an upgrade over communism, but neither inspires entrepreneurial risk-taking among people who had absorbed for decades a Russian expression, “tallest stalk gets the sickle.” The small business owners I talked with in Kiev had often been government employees before the fall of Communism, and their attitudes differed from those of the Tallinn high-tech entrepreneurs: 

Nina Korzh sells perfume in an entry-level marketplace and competes against many other perfume sellers with similar merchandise. She was “out on the street with no job” in 1995, so she went into business, but would prefer being a salaried worker: “If a salary is decent and guaranteed, you feel good and you don’t have to worry about buying or selling stuff. In business you can never say for sure, and you have to take risks.”

Valentina Russel was a construction engineer. She entered the marketplace in 1995 “because there were no jobs and I wanted to be better off. I’m a Capricorn by my horoscope and I read it and understood that I needed to act.” She’s done well and now has a higher-end drapery shop inside a mall.

A HOPE micro-loan has also helped candy-seller Oxana Tsarik, who was optimistic—“I’m hoping for the best”—and smiling as she explained her competitive advantage: “I smile. Most Ukrainians never smile, haven’t you noticed?” Her smile would melt the hearts of customers, but she has a business problem: Summer heat melts her chocolates.

The prime reason for the stern faces even on political posters is cultural, but in part may be economic: Barkov says, “The environment for small business is worsening.” Yes, Ukraine’s entrepreneurs can readily sell cheap goods from Turkey or China, an activity that produces negligible profits, but barriers to entry make it hard for them to move up to a factory that turns tomatoes into ketchup or even to a beer-and-cigarette stand. 

Since small business owners do not know what the government will do, the smart money is on sitting tight and starting no new projects. One of Barkov’s branch managers, Vitaly Tolstikov, summed up the prevalent mood: Entrepreneurialism is hard, people are earning less, and “these days are the worst.” But then he pointed out Bible verses—John 3:16, Proverbs 6:6—on one wall of his office: “They help start a conversation. The clients ask questions, ‘Why are you guys different?’ We talk to the clients about Jesus … and at the same time, we help them improve their social status if they use our loans in the proper way.”

Barkov and Tolstikov recognize that the underlying problem is religious, and the re-empowered Orthodox church is part of the problem. Many church hierarchs enjoy governmental patronage and provide no real alternative to worship of the state, which means ordinary Ukrainians often turn to worship of the bottle. Decades of atheistic teaching in schools continue to have an effect: Many Ukrainians see Christianity only as a set of prayers recited at baptisms and funerals.

Evangelical missionaries tried to change that understanding when they were free to come to newly independent Ukraine in 1991. The initial response was exciting, but time had shown that many Ukrainians only momentarily pledged allegiance to Jesus: As missionary Shannon Ford, in Ukraine since 1999, puts it, “Everyone in the Ukraine has been saved five times.” But he remembers wonderful baptisms by the river, and those who persevere.

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