Thursday, December 22, 2011

The Dilemma of “Transition Economy”: Rich People, Poor State?

The conditions on the Lviv-Kiev overnight “express” train are quite shocking. As the steam engine slowly pulled into the Lviv station to pick up passengers, what greeted us behind the already seemingly two-decade-old engine was a series of green-painted metal box carriages, the design of which has not changed at all since the Soviets standardized them, eh, more than half a century ago. The carriages can be described in one word: rusty. Rust covered the creaky doors and the metal stairs leading up to them.

The inside was not much better. The curtain had 20-year-old (beer?) stains, only to be “outshined” by the 40-year-old rusty rods that are barely keeping the curtains in their proper positions. As the train slowly chugged out of Lviv station, one can hear the wooden frames of sleeping berths and windowsills making creaking noises the whole night, as if they are going to fall apart any minute. Passengers necessarily make their own beds with given sheets and beddings, while conductors go around the half-empty carriage asking stern-faced if anyone wants tea.

The distinctly Soviet nature of all this does not seem to bother my fellow passengers at all, and for a good reason. As soon as her bed is made, the stylishly dressed Ukrainian girl at the compartment next to mine pulls out her spanking new iPhone and drift off listening to music. Other passengers follow suit. All have some 21st century high-tech gadgets to keep themselves busy while the train continues to slowly inch forward with her mid-20th century “old-school” mechanism.

The contrast of the train and her passengers cannot be starker. One is sustainable inefficient “tradition” with no obvious modernization efforts in sight, while the other is racing to get on with any new trend available, much in the same way as people do in any other part of the world. The already old train feels more and more ancient when the brilliantly fashionable locals are occupying it. One cannot help by feel shame for the inanimate objects for not being able to compete...

And the train is definitely not alone. Equally creaky and ancient buses and trams run through the street, but so do spanking new Mercedes and BMWs. Public housing still are concrete boxes from the Soviet era, while newly built private housing, whether it be villas or privately developed apartment blocks, incorporate the best designs both on the outside and the inside. Whatever the private sector owns is new, and whatever the government owns is old and barely operational.

The stark contrast in a way illustrates the state of former USSR’s economic structure. Private citizens, with newly liberated entrepreneurial spirits and ability to consume goods from all over the world, are transforming themselves rapidly to catch up with the West mentally and materialistically. The state, as represented by few remaining state-operated institutions like the Ukrainian railway bureau, has no energy, spirit, or financial resources to be revamping themselves.

Certainly, it can be said that in the effort of “post-communist states” like Ukraine to engage the capitalist-dominated world economic order, the state has been the one to suffer the biggest damage. Many sources of prior income, in the form of protected state enterprises, were killed off by economic reform and previously nonexistent private/foreign competition. By at the same time, the new demands of the electorate, seeking to gain the same benefits as citizens of developed countries in the West, continue to squeeze the coffers of the state with increased public spending.

The financial gap, as a result, has emerged. Private citizens benefit from higher income and cheaper/better goods under a more global environment, but the government only sees increased responsibility and spending while new sources of revenue by way of taxation has not kept up. To prevent excess debt, minor yet “functional” institutions, like these creaky trains, can only be maintained in the current state without hope for transformation in the short term, unless major accidents raise public awareness and demand for substantial change.

But what is scarier than the financial gap is the mentality gap. While individuals, with optimism and competitiveness, continue to plow forward in their quest to obtain the very best of everything, what would they think of their “adequate is good enough” attitude of government institutions? Sure, people are still riding these creaky trains to Kiev, but are they simply doing it out of disdainful necessity? When the individuals start to perceive their government as fundamentally and overtly conservative, without correlation to political thinking, do they simply lose confidence in all government institutions and begin to see political activism as pointless?

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