Ukrainian Pages

Academy of Sciences, chief editor of the magazine “Sociology: Theory, Methods, Marketing”

Recent sociological studies accumulated comprehensive data needed to show the essential features of the public’s perception and assessment of economic reforms. These features reflect the peculiarities of the formation of the attitude towards privatization and private enterprise under the influence of objective social factors and subjective appraisals of a living standard and social position of the Ukrainian population. For the purposes of this paper, based on the results of the long-term sociological monitoring we have focused our attention on those problems of public perception and assessment of the economic reforms that should be solved today in order to improve the situation in the society, not only for the individuals who are most capable of adapting to the situation but also for the majority of the Ukrainian population as well. Necessary sociological data was obtained through the public-opinion polls of adult population throughout Ukraine. Since 1992 the Institute of Sociology of the Ukrainian National Academy of Sciences has conducted such polls on a yearly basis in accordance with the program conceived by the author in co-operation with Natalia Panina. The sample consists of a total of 1800 respondents from each region of Ukraine, Kyiv and the Autonomous Republic of Crimea (in proportion to the number of population). Each region is represented by the regional center, one town and one village. For more detailed information on the concept of monitoring, sampling and public opinion polls organization see.: Panina N., Golovakha E. Trends in the Development of the Ukrainian Society (1994—1998). Sociological Indicators. — K.: Institute of the Sociology UNAS, 1999. For the purposes of the paper the results of other researches in which the author participated are used in addition to the monitoring data.

This feature is inherent in (in percentage):

In addition, the same studies have shown that “transition of Ukraine from a totalitarian system to democracy takes place in a difficult situation and the problems of transition in Ukraine associated with the political culture are more acute compared to the countries of Eastern Europe. The social and psychological stereotypes (which are pseudosocialist and Utopian by nature) hinder the development of a high standard political culture in Ukraine. The propensity of the majority of those polled to favor the idea of transfer of enterprises into the ownership of labor collectives should be seen as a rejection of the idea of actual (not feigned) privatization”. Pakhomov Yu. Peculiarities of the Political Culture Development in Ukraine and Counties of Eastern Europe // Political Culture of the Ukrainian Population. — K.: Naukova Dumka, 1993. — Pages 128—129.

In the above quotation a possibly key contradiction of the public’s economic consciousness in the first years of the Soviet society transformation is revealed. On the one hand, the majority of the population supported a strategic policy of privatization of land and small and medium-sized enterprises. However, they regarded privatization mainly as a revolutionary act of social justice and did not consider it was justified to return the state-owned assets to the former owners and their descendants or to sell them through commercial auctions. In full conformity with such state of the public consciousness in Ukraine (as well as in some other CIS countries) the privatization strategy allowing for a long period of time for the public to change their attitudes towards the state ownership has been adopted.

The first stage of privatization (1992—1994) associated with the distribution of the personal vouchers, the “birth” of trust companies and financial pyramids, the loss of personal savings and hyperinflation resulted in the growth of negative attitudes to the policy of transfer of land into the private ownership. However, it less affected the public attitudes towards the privatization of small and large-sized enterprises (See Tables 1,2,3).

At first sight the public consciousness has withstood the shocking reformation period without dramatic losses for a subsequent development of privatization process. Only in attitudes towards privatization of large-sized enterprises did negative opinion prevail over a positive one (as it was in 1992. However, the actual decreases reflected in the public’s support of market reforms were rather heavy in the sphere that seemed to be most successful during the first year of reforms. The case in question is the attitudes towards the private enterprise that had been rapidly developing in the years of “perestroika”. By 1992 private business development has been supported by the majority of the population and only a small number of people were opposed to it (Table 4).

It took only 3 years of inconsistent and contradictory reform to increase the percentage of those who opposed to the private enterprise from 14 to 33% (between April 1992 and June 1995). The decrease in the percentage of the private enterprise supporters was not so apparent (12% decrease) because the increase in the percentage of those who were opposed to private enterprise mostly came from those people who were not able at first to define their attitude towards private enterprise.

In addition, in the period of 1992—1994, at the same time as there was a significant change for the worse in the attitudes towards private enterprise there was a significant increase in those who would agree to work for a private entrepreneur (Table 5).

At first sight these alternative tendencies indicate that the emotional and rational-or-pragmatic components of the public’s attitude towards private enterprise do not coincide. And if the emotional responses corresponding to a general negative assessment of the social situation and the living standards are now more often associated with privatization and private enterprise as the sources of the social and economic changes, work for the entrepreneur is now more often considered as work for the purposes to improve one’s financial position in the sector of economy that is more dynamic than a government sector.

In accordance with such orientations towards work the share of the employed in the private sector of the economy increased nearly twofold during one year (since June 1994 till June 1995), Table 6.

Just in that period the willingness of the public to work in the private sector has begun to transform into definite forms of employment despite the deterioration of the public attitude to private enterprise.

In the period of 1995—1998 when a significant growth of the non-governmental sector in the production sphere (including large-scale production) was observed, the attitude towards privatization was changing rather slowly, but the general trend remained negative (Tables 1—3). At the same time attitude toward private enterprise did not practically change in that period (Table 4). The correlation between those who are willing to work for a private entrepreneur and those who are opposed to doing so remained unchanged (Table 5). At the same period the percentage of the employed in the government sector of the economy was gradually decreasing. However, this decrease was caused by the increase in the percentage of unemployed, since the employment in the private sector in 1998 was at the same level as it was in 1995 (Table 6).

It is understood that the groups of employed and unemployed in different years are compared in public opinion polls by a self-identification criterion. And in this case the absolute values of indices of employment (which are relevant enough per se) are not so much important as the dynamics of these indices showing us that the larger number of people leaving the government sector identify themselves with the unemployed, which are gradually forming the most numerous group of population. It doesn’t mean that all “new unemployed” actually become non-working pensioners or live in dependence. A significant part of them are employed in the shadow sector of economy (such as undeclared individual labor activity, participation in a criminal business, illegal labor, etc.).

Social benefits	% of people answered that they are lacking benefit in question
	1995	1996	1997	1998	1999	2000
Health	48.3	51.8	55.5	56.8	53.4	52.0
Necessary clothing	48.3	42.9	43.2	46.6	42.7	43.7
High standard housing	43.2	34.7	37.1	39.4	38.6	35.4
Fashionable and fine clothes	48.8	44.3	42.9	48.7	44.2	44,0
Necessary furniture	42.2	35.5	35.0	37.6	34.5	32,0
Possibility to eat in accordance with the tastes	66.4	72.1	71.0	77.2	74.3	72.8

In the opinion of Alexander Paskhaver, 1998 should be considered as the first year of post-privatization transformation. Paskhaver A. Privatization in Ukraine: Preliminary Conclusions. — Warsaw: Center for Socioeconomic Studies, 1999. — P.7. In 1998 the state ownership of the property lost its dominating role in the economic life of the society. This means that the State has actually lost its traditional levers of “post-socialist” protection of population from all kinds of economic reformation consequences. It is no mere chance that precisely this year became the year with the worst indicators related to the assessment of the population potential to suffer economic hardships (See Table 7).

Mobilization of the adaptation resources is inevitably associated with the growth of psychological tension, which transforms into declarative forms of social protest. Protest feelings, in their turn, are correlated with the loss of social optimism. In 1998 the Ukrainian citizens noted that they had lost social optimism and a hope for the improvement of the situation in the country. The percentage of those who supported this idea accounted for 24.8 % in 1994, 29.1% in 1995, 29.6% in 1996, 29.3% in 1997, 32.2% in 1998, 29.2% in 1999 and 28.3% in 2000.

Considering that a 1998 survey was conducted in June (i.e. prior to the default in August in Russia that affected the Ukrainian financial system as well), the social tension peak during this period may be considered as the reflection of the objective trends in social and economic situation development in Ukraine where a gradual transformation of the economic foundations of the society has led to the most concentrated expression of the public’s negative emotions by the middle of 1998. For the purpose of the assessment of the social and economic prospects of the society it is extremely important to note that even after August 1998 (when the national currency was devaluated and inflation intensified), the protest feelings have not increased and even have significantly subsided by early 2000. This indicates the beginning of the process of the population active adaptation to new social and economic realities.

One of the adaptation indicators is a self-appraisal of individual’s financial position by the criterion of the material wealth sufficiency. Since 1995 in our monitoring research the respondents have been answering the question whether they are satisfied with the level of one or more social benefits. According to the data shown in Table 8 one may come to the conclusion that the highest level of the subjective deficit of material wealth was in 1998.

It is understood that some improvement of the situation by 2000 should not be considered as a fundamental change. Currently, there is still a considerable shortage of material wealth. However, in this case the tendency of changes in the appraisal of the material wealth deficit is of great importance. In this connection we should stress that compared to 1995 the situation has significantly improved by such important indicators of economic conditions as the level of provision with housing, clothing and furniture. The situation by such criterion as “possibility to be fed according to the individual’s tastes” has worsened. The criterion has a great impact on a general emotional state of a person. The fact that nearly three fourths of the population eat the food which they can afford and not the food they would like to eat explains to a considerable extent the situation with self-appraisals of a financial position of a family, which have dramatically changed during the years of reforms.

Below is given the appraisal of the families’ living standards given by the Ukrainian population (figures are based on two public-opinion polls conducted in April 1992 and in January 2000), in percentages of the total number of those polled.

In addition one should take into account that the early 2000 witnessed change for the better in the population’s attitudes towards private enterprise and privatization. Therefore, there are reasons to state that though the economic reforms caused the feelings of loss of material benefits and anomic demoralization, For more detailed explanation of these phenomena see: Golovakha E., Panina N. Social Madness: History, Theory and Modern Practice. — K,: Abris, 1994. at the same time, they have brought real positive results. The results have impact on the public’s attitude towards reforms in general as well as on the electoral behavior according to which the majority of the Ukrainian electorate more and more often rejects political forces objecting to the market reforms.

At the same time, one should keep in mind the fact that at the present time the attitude towards market reforms, privatization and private enterprise in the public consciousness is somewhat worse than it was in the first year of Ukrainian independence. This negative shift is a result of accumulation of negative emotional reactions associated with a protracted period of insufficiently efficient social and economic transformations.

Thus, during the years of Ukrainian independence and the implementation of the market reforms some conflicting tendencies appeared in the public consciousness on the basis of which one should appraise further prospects for the economy restructuring, development of the privatization processes and private enterprise in Ukraine:

1) the majority of the population believe that their social and economic status has significantly worsened;

2) the attitudes to privatization and private enterprise have changed less (compared to 1992) but remained negative;

3) the public has shown better attitudes to market reforms in the period from 1998 to 2000.

What tendencies will play a decisive role in the future? What reactions of the public consciousness will be typical for the new stage of the reforms implementation associated with privatization through tenders, selling of enterprises through auctions for cash and elimination of the state ownership of assets at the already privatized enterprises? Do we have to expect that negative reactions of the public will increase and the readiness of the population to engage in social protest will increase? Or might it be that by the present time the public opinion has stable foundations for positive perception and assessment of the market reforms intensification based on a new privatization strategy?

The answer to these questions to a great extent depends on what factors forming attitudes of the public to economic reforms are decisive in a modern social and economic situation. Among such factors the material well-being and the living standard of the population are of primary importance. Have the majority of population become losers due to the objective causes as a result of the collapse of socialist economy? Or is the feeling of being a loser subjective by nature and a natural reaction of people to the destruction of a traditional social order?

It should be recognized that the statement concerning dramatic decline in a living standard of people during the years of “perestroika” and independence of post-soviet states (including Ukraine) actually became a generally recognized fact. Two key arguments are put forward to support the statement: the official data concerning the population incomes which on average do not exceed several tens of dollars and the data received through the public opinion polls according to which the income is even lower than it is shown in the official data and an overwhelming majority of those polled ranked themselves among the category of low-income. If the situation was really so critical, then the intensification of market reforms should be associated with the growth of negativism and protest feelings. However, it has not happened in recent years and will not happen in the near future. The main reason for this (as will be explained below) is associated with the fact that during recent years the majority of the Ukrainian population lives better by the number of important indicators of material well-being than they lived in the last years of “stagnant well-being”. Therefore the people are not interested in curbing market reforms despite the significant worsening of their psychological state under conditions of the protracted transition period and socioeconomic instability.

At first sight it is hardly possible despite the heroic efforts of the government officials trying to fill the consumer goods basket of the average Ukrainian with such volume of foodstuffs, goods and services that could satisfy the people’s minimum needs in the years of military communism (the period of 1918—1920). However, we live in another period of time and Ukrainians first of all compare their present consumer goods basket with that consumer’s basket they had in the years of nostalgic for many people “developed” socialism. And when sociologists ask people how they evaluate the level of their living standard in the recent years compared to that they had in the “pre-perestroika” period the data they receive turns out to be depressing. With regularity uncommon for a sociological science one and the same tendency is observed: according to public opinion, every year the level of living standard decreases and the feelings associated with the capability to meet the material needs become more pessimistic.

According to the data of our monitoring every year (starting with the survey conducted in 1994) nearly 50% of the Ukrainian population stated that the material well-being of their families significantly changed for the worse. Those whose material well-being became slightly worse account for 20—25%. 18—22% of the population believe that their living standard remained at the same level and those who improved their material well-being account for only 5—7%. Even the under 30 young population who value less “socialist achievements” than older generations do, when answer the question — what have the transition to market reforms brought to you personally? — most often mention the following results of the reforms: “loss of social protection and benefits” (40% of those polled throughout Ukraine), “decline in the living standard” (36%), “possibility of becoming unemployed” (29%). At the same time the answers “possibility of earning money without restrictions” and “freedom to become a private entrepreneur” were not often mentioned (each answer accounted for 24%). Present Political Situation through the Public Opinion Appraisal (based on the materials of sociological studies). Issue 11. — K.: Administration of the President of Ukraine, 1998. — P.11.

One may come to the disappointing conclusion that “perestroika” and independence have struck a crushing blow to the economic position of the Ukrainian people turning the majority of the population into the underprivileged and the poor. Moreover, nearly two thirds of the population rank themselves among the poor.

Now we have only to understand the following: Why can one see traffic jams in the cities of such poor country? Where do numerous shops and kiosks selling expensive goods find the buyers? And to whom the impoverished farmers sell food products at rather high prices? Apparently, there are some additional sources, which compensate for starvation wages, pensions, stipends and benefits. This is confirmed by some sociological research. In particular, a survey of the households throughout Ukraine conducted by Kyiv International Institute of Sociology in 1995 showed that there was an essential discrepancy in the families’ reporting of income and expenditures: the expenditures exceeded the income by almost twofold. Income and Expenditures of the households in Ukraine. Summer of 1995. (Based on the sampling appraising surveys). K.: Kyiv International Institute of Sociology, 1996. However, the discrepancy also explains little because the amount with which those polled operated in their reporting not exceeded several tens of dollars in average per month thus eliminating the possibility for the overwhelming majority of the households of maintaining more or less decent living standard.

It should be recognized, that such indicators as average monthly wages or family income calculated in accordance with self-appraisals of the Ukrainians cannot be objectively measured because the basic methods of gaining income by the people in the current economic situation are associated with the sources which are not usually advertised due to their “shadow nature”. Nobody knows how much money comes to the Ukrainian citizens from the shadow sector. But the majority of experts are inclined to believe that the shadow sector is at least as strong as a “sunny” one and quite possible outperforms it to a considerable extent. Therefore, neither income declarations of the majority of national entrepreneurs nor average per capita income of the majority of citizens given by them in surveys by questionnaire and in the reporting of family income should not be taken as the truth.

In our opinion, analysis of the family material well being should be conducted taking into account the following indicators: availability of consumer durables and household comforts necessary for a civilized everyday life, which may indicate the certain level of the family’s well-being. Ukrainian sociologists conducted representative public-opinion polls in Kyiv and throughout Ukraine in 1981—1982 (within the frames of All-Union research “Lifestyle of the Soviet people” carried out by the Institute of Sociological Studies of the Academy of Sciences of the USSR and the Institute of Philosophy of the Academy of Sciences of the Ukrainian Republic). Therefore, we are in a position to compare some indicators of the families’ material well-being in the last years of the “developed socialism” with those of the first years of Ukrainian independence (Table 9).

It is obvious that the percentage of the owners of garden plots and summerhouses increased several times compared to 1982. The percentage of those who own a car increased twofold. The people have more refrigerators, color TVs, washing and sewing machines, which items form a basis of the modern civilized everyday life. Conditions of spiritual development have also improved because the percentage of the families having home libraries and video- and stereo recorders significantly increased. Thus the modern family lives better by a number of important indicators of material well-being than in the last years of the “developed socialism”. Moreover, only 40% of the families had basic household utilities in the nostalgically remembered past, whereas currently, the majority of the Ukrainian population has all conditions for a civilized everyday life.

No doubt, we may assume that all the material wealth had been accumulated in the socialist years and in the last few years people had to live on the possessions (durables) they had accumulated earlier. The complete wearing out of the durable articles will lead to a gradual disappearance of all civilization benefits and the return of the times when a TV-set, a refrigerator and a washing machine were considered as luxury articles unobtainable for the overall majority of the population. Such a point of view is represented for example, in the article devoted to the study of the living standard of the people in the Odessa region. Chapskaya I. Status of the citizens in the transforming society // Sociology: theory, methods, marketing. — 1999. — #3. — Pages 63—75. The author provides statistical data indicating that the purchasing of the expensive goods reached a peak in 1990—1991 and thereafter the people began to make less and less of such purchases. In addition, the average period of use of cars and home appliances was 12—15 years by 1995. However, even the fact that official sales statistics show a drastic decline in purchasing of cars whereas the number of them on the streets is increasing, gives a reason to doubt once again the adequacy of official statistical data. According to the official statistics, the majority of the population receive starvation wages and make very little expensive purchases. However, if all durables have been purchased in the years of the “developed socialism” and “perestroika” it is difficult to understand why the number of cars, TV sets, refrigerators, stereo- and video-recorders had not decreased since 1994 throughout 2000. Moreover, the period of use of the earlier purchased goods had to become incredibly long. It should have reached 17—22 years in average.

The number of persons with garden plots, sewing machines, tourist, hunting and fishing equipment decreased in 2000. It means that people continue to purchase what is necessary for the consumption purposes and lose all that could give an additional income (work at the garden plot, sewing of clothes, hunting and fishing). It is quite possible that the number of people who do not need income from these sorces increases. In this case we cannot rule out the fact that during the last few years the Ukrainian population have made a small but important step from a dominant idea of surviving by means of natural economy towards the goal to build a “consumer society”. However, the decrease in the percentage of those who have home libraries and fashionable clothes does not clearly correspond to this goal. Still, this is a general trend of the development of the society in crisis. In such times neither the state nor the majority of people have money or the desire to spend money on the cultural-and-aesthetic aspect of social and private life. The major part of their energy and funds are spent to meet material needs and settle everyday life problems. Therefore, in the recent years Ukrainians more and more often prefer to restore exhausted strength by resting passively. According to the data of sociological monitoring the share of the active forms of rest requiring current cash expenditures (visiting theaters, cinemas, concerts, sports activities, tourism. etc.) is gradually decreasing and the share of passive forms of leisure (watching TV, rest in lying position doing nothing, etc) is respectively increasing within the structure of everyday activities.

From this follows the aspiration to invest money into durables. Suffice it to take once a difficult decision to buy a modern TV set and a cozy sofa and you will ensure a fascinating passive leisure for many years to come. The era of the initial accumulation of capital has affected not only active operators of the “wild market” but the major part of simple citizens as well who are saving money to create conditions necessary for a civilized everyday life, which would correspond to the optimistic perspectives of the Ukraine’s development denoted in the long-term presidential and governmental programs.

It is clear that one expect a reasonable question whether the trend towards a significant improvement of the Ukrainian family living conditions is a destiny of only the inhabitants of the capital-city and large cities, where the “lion’s share “ of finances, private enterprise and varied forms of business activities are concentrated. Could it be that people in small towns and villages have a lower standard of living than in the years of “stagnation”? At least, such opinion is often expressed in discussions about the living standard.

In this connection let us consider the data concerning availability of expensive household articles in the families living in different kinds of inhabited localities, comparing to Kyiv and Ukraine in general in the early 80s (Table 10).

Basing on the data presented above we may judge how much worse or better equipped an inhabitant of rural Ukraine is today compared to the Soviet past. And what do you see? At present, the inhabitants of small towns and villages have two times as many cars as the inhabitants of the capital had in the early 80s. The number of families having TV-sets increased several times. The percentage of rural dwellers, which have refrigerators, is the same as it was in Kyiv in 1981. The situation with home libraries differs slightly. This situation is better in small towns than it was in Kyiv in 1981 but the country people have not reached the level of the Kyivites yet. In general, we may say that today’s inhabitants of small towns and villages live a little better (judging by the level of available benefits of civilization) than the people in the capital of the Ukrainian Republic in early 80s.

Thus, the data of the comparative studies of the provision of the Ukrainian population with household goods, durables and utilities necessary for a decent everyday life indicates that the market reforms have brought certain material benefits to the majority of the population. This fact explains the stability of the Ukrainian citizens’ choice of democratic political system and free economy.

The public opinion poll of the adult population throughout Ukraine (1752 persons have been polled in all regions of Ukraine) conducted by the Institute of the Sociology of the Ukrainian National Academy of Sciences demonstrated that the stereotypes of such type dominated in the public’s economic consciousness. This survey revealed that the ideal of the restrictive distribution of material wealth was widely spread in the public consciousness. Thus, only 24% of those polled allowed for the necessity of large income difference, 55% of the polled assumed that the difference in income should be small and 13% — completely excluded the possibility of income differentiation. However, we had only to change the wording of the question (to replace the word “income” by “wages”) and the percentage of the supporters of wages restriction turned out to be small (it accounted for 20% of those polled) while three fourth of those polled supported the lifting of all wage restrictions. Is it a paradox? Undoubtedly, it is. However, it is only from the point of view of a man whose level of the economic culture of the democratic society is high enough and who believes that any income gained from the legal source is the measure of labor input and neither communal prejudices nor ideological dogmata should regulate its amount.

An individual whose personality was formed in the system of the state monopoly, when the only legal source of income is the salary paid by the state has another economic culture. And if the “benefactor” had a fit of generosity you should make use of the moment and to get all that possible. Such situation happened as a result of economic experiments in the course of the first years of “perestroika” when some restrictions on the wages fund had been lifted and the consumer market collapsed under the pressure of the non-secured state billions.

It is understood that economic transformations affected the economic culture of the society. Therefore, the public’s attitudes towards the income received in the sphere of private enterprise have significantly changed in recent years. We may judge of that based on the results of the All-Ukrainian poll conducted by the Democratic Initiatives Fund in April 1998. 73.8% of the respondents agreed with the opinion that “the system built on profits teaches people to rate highly the intensive work and individual abilities (skills)”; 49.6% of those polled supported the idea that “when the private businessmen are allowed to “make” as much money as they can the income of all and everyone is also gradually increasing”. Political Portrait of Ukraine. — 1998. — #21. — P..89.

Therefore, at the present time nearly half of the population does not regard the income of an entrepreneur as something stolen from the society and common citizens. However, there is still another half of the population who consider as more correct the statement that “when the entrepreneurial circles are allowed “to make” as much money as they can, the incomes of the working and poor people are decreasing”. Therefore, economic consciousness of the Ukrainian population is still split concerning the attitudes towards the role of the private enterprise and entrepreneurs in the economic life of the country. The same may be said about the individual economic consciousness, that is characterized by the explicit ambivalence (that is simultaneous acceptance of contradictory and opposing views, opinions and orientations towards the economic life of the country and prospects for its further development.

The certain percentage of people who themselves would like to be the owners of industrial enterprises, restaurants and shops shows negative attitudes towards privatization and private enterprise. It is a vivid example of the ambivalence of the socioeconomic orientation. Karevina O. Economic Interests and Socioeconomic Orientations of the Ukrainian Population during the Transition to a New Socioeconomic System // Sociology: theory; methods; marketing. — 1998. — #4–5. — Pages176—185.

Regardless the ambivalence of the attitudes of the part of the Ukrainian population towards private enterprise and privatization and the widely spread stereotypes of paternalism and leveling (egalitarianism), the existence of a large number of people who would like to become the owners of the enterprises in the production and services sectors is the most important factor indicating that privatization was necessary and there were substantial social preconditions for its implementation. According to the data based on the nationwide poll conducted by the Democratic Initiatives Fund in 1994, 86% of the population wanted to own the house or apartment, 64% of the people wanted to own land (with the right to sell), 26% — small and medium-sized enterprises, 18% — the shops and restaurants and 12% of the Ukrainian population wanted to be the owners of large enterprises. The number of potential owners turned out to be surprisingly large in Ukraine. This indicates that in the course of the implementation of the privatization strategy one may count on the interest in the purchasing of small and medium-size enterprises on the part of the significant section of the population. It is understood, that we should not expect that the potential owners would massively purchase enterprises in the production and services sectors at the auctions.

To realize propensity to private enterprise it is not sufficient only to wish. One should have the initial capital and entrepreneurial skill. However, the state primarily gave the priority right to privatize enterprises to the labor collectives. It also did not ensure the establishment of the crediting system and the legal support to the potential buyers. Therefore, the Government has not succeeded in avoiding the resistance to privatization on the part of the conservatively oriented sections of the population but contributed to the decrease in the percentage of the supporters of privatization and market reform as well. Ten-year experience in the studies of the public’s economic consciousness permits me to express my belief that from the very beginning the state reformers overestimated the potential of the social resistance of those people (it is really the most numerous part of the population) who were affected by the socialist stereotypes and whose attitudes towards privatization and liberal transformations in the economy were ambivalent.

Certainly, the percentage of the firm supporters of capitalism in Ukraine in the first years of reforms and at the present time is not large. Their number is even less than the number of the supporters of the idea of the returning to the socialist past. This is confirmed by the results of the monitoring conducted by the Institute of the Sociology of the Ukrainian National Academy of Sciences from 1994 throughout 2000 (See Table 11).

Precisely because of this, the protest potential is mostly declarative and reveals itself in the form of the public’s dissatisfaction with the reform outcomes. However, the protest is not expressed in the destructive forms that may include not only street riots but such form of the destructive social protest as rejection of democracy and market reforms by means of completely legal delegation of power in the country to the communists as a result of the democratic elections.

In spite of a long-tern pessimism and distrust of the public authorities, the majority of the population does not support the idea of the communist regime restoration. This fact indicates that massive ambivalence in the transitional society is not such a serious threat for the order and stability of the society that it might be necessary to restrain and restrict the implementation of market reform.

It is understood that a lot of the factors that has become clear at the present moment had not been tested in practice during the first years of reforms. Therefore, the caution in actions at the first stage of privatization was to a significant extent justified because it was hardly possible to foresee all outcomes of the decisive liberalization of the economy. At that time, in addition to the widely spread stereotypes of the public consciousness there were many objective obstacles to the implementation of the radical privatization program. These obstacles were identified in the mentioned above article of A.Paskhaver: rule of the old Soviet bureaucracy in the new bodies of power, insignificant political and economic influence of the new private capital, the economic domination of the directors of large-sized state-owned enterprises in the production sector.

At the present time the role of these objective factors in the restricting of privatization forms, rate and scale is not as important as it was at the start of the reforms in the Ukrainian economy. The private capital became more competitive and the old bureaucracy dominating in the organs of power had to surrender a number of key positions in the economy to the young supporters of reforms. And only the public consciousness became less market-oriented in the number of important aspects of the attitudes towards economic reforms than it was in the past. Data of the sociological monitoring presented above shows that the percentage of the supporters of the privatization of land and large-sized enterprises has decreased (Tables 1,3). Both, the attitudes towards the basic components of the market reform and the understanding of the essence of some principal aspects of reformation have changed for the worse (concerning the prospects of market transformations).

Such changes have been identified during the studies conducted by the Democratic Initiatives Fund devoted to the peculiarities of the formation of the economic culture of the Ukrainian population. Within the framework of this project two polls of Ukrainian adult population (the sample consisted of 12000 respondents) were conducted at an interval of 4 years in February 1996 and April 2000. Table 12 shows the answers to the question: what in the respondents’ opinion should bring the economic reforms?

Statements on the reform substance*	Percentage of those who believes that the given statement reflects the substance of the economic reforms
	1996	2000
Increase in the living standard of the majority of the population	53.0	65.4
Strengthening of the discipline at the enterprises of all ownership forms	35.7	28.1
Introduction of principles of equity in the remuneration of labor: equal payment for equal work regardless the form of ownership and the place of employment	30.9	38.2
Reform of the tax system	21.8	29.4
Large-scale privatization (of land, enterprises, houses, etc.)	14.6	7.8
Maximum development of competition in the commodity and labor markets	11.6	11.5
Increase in the government grants (aid) to the enterprises for which it is difficult to survive under new conditions	10.0	26.2
Development of the banking system	5.5	4.0
Development of the market infrastructure (exchanges, investment funds, etc.)	5.5	4.6
Bankruptcy of non-profitable enterprises	4.5	3.4
I don’t know	16.3	10.8

Therefore, the economic transformations of recent years have not contributed to the important positive changes in the formation of the new economic culture in which the economic stereotypes of the past would be replaced by steady orientations towards market economy. In addition, it is very important to note that there are some positive changes in such component of the economic culture as awareness of the basic principles of the market economy. In 1996, nearly 40% of those polled stated that they had no idea of the market economy principles, however, in 2000 only one third of the respondents informed their complete unawareness of these principles. This shift is not so significant to ascertain substantial positive changes in the development of the economic culture of the population. In addition, we may not eliminate the possibility that the public’s understanding of reforms is more often wrong than correct. One fact is obvious — the more people believing that they are aware of market reforms will be in the country, the more common will be the positive attitude towards the most important components of market reforms. The data based on the results of the public opinion poll conducted in 2000 (shown in Table 13) confirms this fact. Among the many factors contributing to the formation of the attitudes towards private enterprise we may see the factor of the knowledge of the market economy principles.

Factors forming the attitudes towards private enterprise	Attitudes towards private enterprise
	Positive	Indefinite	Negative
Knowledge of the basic principles of market economy
I am well-informed	85.5	9.4	5.1
I have a vague idea of this	60.7	24.4	14.9
I am unaware of it	37.4	31.7	30.9
Age
Under 30	74.6	17.4	7.9
30—54	61.2	24.7	14.2
55 and older	32.5	32.0	35.5
Education
Primary and incomplete secondary (high)	38.8	29.8	31.4
Secondary (high)	64.0
Specialized secondary	62.5	24.5	13.0
Incomplete higher and higher	73.5	20.5	6.0
Type of inhabited location
Kyiv	65.0	30.0	5.0
Other city	58.8	23.6	17.5
Village	48.9	25.1	19.1
Region
Western	61.4	26.3	12.4
Central	49.4	25.3	25.3
South	55.8	25.1	19.1
North	54.2	23.9	22.0
Do you have a possibility to earn additionally?
Yes, I have possibility to earn enough to ensure normal living standard	85.2	3.7	11.1
Yes, I have. But the amount I earn is not sufficient to ensure a normal living standard	68.3	20.9	10.8
I don’t have such possibility	51.6	26.6	21.7
Leaving abroad to replenish a family budget
Permanently	81.8	12.1	6.1
Sometimes	69.2	21.9	8.9
I don’t have such opportunity	53.0	26.0	21.0

Among the sociodemographic factors that form the attitudes towards private enterprise the factor of age is the most important followed by the education, the type of inhabited locality and region of the country the people live in. The conclusion is obvious: the younger are the people and the higher is the level of their education and the larger is the inhabited locality they live in, then the better is the attitude towards private enterprise (an towards privatization and market reforms in general). Regional aspect also shows some differentiation in the attitudes towards private enterprise: the largest percentage of those whose attitudes are in favor of private enterprise and market reforms is in the Western region and the smallest percentage of the supporters of private enterprise is in the Central region.

The individual labor activity is also a very important factor. The more possibilities people have to earn additionally, the more often they show positive attitudes towards privatization. And that means that the creation of additional new jobs to provide people with the possibility to fully realize their labor potential and respectively to increase the living standards of their families is one of the decisive factors contributing to the improvement of attitudes towards market reforms in the public consciousness.

At the same time Ukraine succeeded to implement without significant shocks “de-statization” of a significant part of the assets, to lay the foundations for the private enterprise development and to ensure support of the majority of the electorate for the strategic policy of the subsequent implementation of market reforms.

Thus, at the beginning of the third millenium the situation in Ukraine cannot be assessed simply negatively or positively from the standpoint of the economic reform results and prospects. A contradictionary nature of the reform results and vagueness of the subsequent reformation prospects is an adequate characteristic of the situation. Unlike the countries of Central and Eastern Europe which have left the socialist block in the atmosphere of the internal political consolidation of the society and predominant anticommunist orientation, Ukraine has adopted the policy of radical market reforms nearly accidentally, due to the pressure of the external circumstances. The majority of the powerful political and economic elite represented provincial Soviet bureaucracy ready to accept new ideology and new market slogans but completely unprepared to implement the slogans in practice. The public consciousness appeared to be well matched to the elite consciousness, in which socialist stereotypes oddly co-existed with the belief in a miracle-working power of the mere desire to join in the economic miracle that happened in the Western countries. Nobody believes in wonders today. Times of illusions and naive expectations of the “capitalist manna” are in the past and they will scarcely come back. It is clear that there is a lot work to do for Ukraine to join in the community of the developed capitalist countries. To achieve this goal Ukraine will have to succeed in attaining a probably primary objective of the economic restructuring: to form the atmosphere of public confidence in new economic institutions and social classes, which have recently appeared but haven’t got a social status, prestige and authority necessary for a successful implementation of market reforms. It concerns the private sector of the economy, private enterprise and entrepreneurs, a new financial system, privatization forms and mechanisms.

Among the factors that are decisive for the optimistic prospects of the market reformation intensification, first of all, one should single out the existing during the last two years tendency of the growing public support to the private enterprise and decline in the level of the protest feelings associated with the reluctance of the people to suffer actual socioeconomic situation. The fact that the everyday life of the average Ukrainian is better equipped with material goods of modern life than in the Soviet past is the important factor contributing to the public support of market reforms. Moreover, this conclusion concerns not only the people living in the capital-city and large cities but those who live in small towns and partly the rural population as well. In other words, the majority of the Ukrainian population are not objectively interested in the backward tendencies in the society and economy and the predominance of political forces for which the economic chaos and anarchy are beneficial.

At the same time the continuous feeling of the shortage of material goods and social benefits, which is characteristic for the majority of ordinary people, results in a gradual decrease in the percentage of the democracy- and market-oriented population. This feeling is to a less extent characteristic of youth and the socially most active part of the population, namely, skilled workers, specialists with higher education, workers employed in the private sector of economy and inhabitants of large cities. However, even among these categories of people the stereotypes of the past are widely spread. The stereotypes hamper the release and development of potential for free economic development of the society.

• the leveling idea of material goods consumption allowing for only slight difference in the consumption quality and levels;
• the idea that private enterprise is criminal by nature and entrepreneurs are exploiters in reality;
• placing all responsibility for material well-being of a person irrespective of the person’s economic activity, on the State and the official system of the social protection of the population;
• “Statelike way of economic thinking” — the feeling of a personal responsibility for the state-owned assets, which exhibit itself as a support of the policy rejecting actual privatization of land and large enterprises.
• Understanding of the economic reforms in categories of the administrative economic regulation (tightening of labor discipline, control over the shadow economy, drive to combat corruption and speculation, centralized reduction of prices, etc.).
  In addition to the conservative opinions and orientations (guidelines) impeding the economic reform implementation the public consciousness includes “sprouts” of a new economic thinking (moreover, this new thinking defines both economic activity and political position of the majority in some categories of the population). Among the most important subjective factors of the new economic relations development the individual economic initiative rapid development is of special importance. The initiative encourages participation of the wide circle of population in private enterprise and ensures a subsistence minimum for the majority of the population under conditions when the amount of state wages, pensions and stipends is very often not sufficient even for a physical survival.

  Moreover, the small business involves mostly young people, the majority of whom (unlike the older generations) support the idea of the final rejection of socialist paternalism and transition to the economy based on the private ownership. This very fact gives grounds for optimistic appraisal of the prospects for the market economy introduction in Ukraine.

  However, in order to prevent this perspective (goal) from moving like a horizon line when the society tries to reach it, the innovation processes in the economy and the mass economic consciousness should be practically supported by the State and political and social institutions. First of all, small and medium-size private enterprise, i.e. section of the population involved in new forms of economic activities, need legal and informational support. The society has to gradually move towards the understanding of a simple idea (which, however, takes roots in the public consciousness with great difficulties) that the better are conditions for the private enterprise, the better the country lives. Not only the private enterprise in Ukraine but the future political and economic image of the country and the possibilities to overcome the current socioeconomic crisis as well depend on the fact how popular this idea will be among the public.

  Concerning the further development of private enterprise a numerical superiority of those who support the idea over those who reject is observed in the public opinion. However this preponderance is not significant to such extent to make it possible for the private enterprise to perform a consolidating social function in the Ukrainian society and economy. At present, the credits of population to the entrepreneurs and the management of the state-owned enterprises are at about the same low enough level. In spite of the low level of credit to entrepreneurs the willingness to work for a private entrepreneur has increased in the last years. Currently, the majority of the population to some or other extent express readiness to work in the private sector of economy.

  At the same time recent sociological monitoring reveals that the social position of the people employed in the non-government sector of economy remains at a steadily low level. This data is one of the indicators of the stagnation in the development of the private sector of the economy. The situation in the government sector is much worse. The employment in this sector is associated for the majority of the population with a gradual decrease in the social position. The Ukrainian Society: Social Changes Monitoring (1994—1999). Informational And Analytical Materials. K.: IS UNAS, 1999. Pages185—231.

  A reassuring tendency of the growing people’s interest in obtaining opportunities for efficient work and additional earnings should be noted. In recent years the change in the expectations has been impressive. It indicates that passive waiting for better times is being gradually replaced by the orientation towards active actions aimed at the improvement of the economic situation. It is understood that to implement this task not only is individual labor initiative needed, but radical measures depending on the government policy should be also taken at the macroeconomic level.

  It is clear that a number of important decisions concerning the problems of socioeconomic policy and organizing the political life of the society should be taken by the highest bodies of the legislative and executive power. The necessity to overcome mass dissatisfaction with the situation in the society is brought about, first of all, by the economic factors affecting the living standard of the population. Considering the present state of the mass economic consciousness, which is not fully prepared to completely reject the state paternalism in the organization of the country's economic life, massive efforts should be directed to the overcoming of the paternalistic stereotypes of public consciousness.

  In addition to the fundamental strategy of economic reforms, to re-orient mass economic consciousness from the remaining paternalistic expectations to the idea of the economic initiative the system of economic education should be introduced. The economic education will contribute to a subsequent “privatization of consciousness”, i.e. make an individual realize the priority of a private economic interest over the interests of the bureaucratic machinery of the State.

  Let’s consider the near-term prospects for the market reform intensification based on the privatization of enterprises through tenders and the reduction of the share of the state-owned property in the earlier privatized enterprises. The sociological researches of the last decade accumulated vast experience in the studies of the state of public consciousness which shows that decisive steps taken in this direction may cause some growth of negative emotional reactions that was observed at every new stage of the market-oriented reform implementation. Such increases were recorded in 1995 and 1998. It’s quite possible that 2001 will turn out to be also less successful concerning the reactions of the public consciousness than the previous year. However these reactions should not be considered as a turning point in the public’s attitudes to the reforms. If a new stage of privatization turn out to be successful, the following years will witness a significant growth in the percentage of the positive appraisals of the economic climate in the country and change for the better in the public’s attitudes to the economic policy of the State. If in 2001 the tendency of the positive attitude towards the reform prevails, it will mean that Ukraine has actually overcome the critical period of the economic development and has taken a decisive step towards sustained economic growth and increase in the living standard of the population.

  
  

Copyright© 2000, The Ukrainian Economic Monitor