Situated at the bend of the Styr River, Lutsk is a middle-size city of some 209,500 and the centre of Volyn oblast in Western Ukraine. It is an old city, founded about AD 1000 by Prince Vladimir of Kyiv. It then became a part of the Principality of Galicia-Volhynia and until the late 18th century was within the Lithuania-Poland-Rus Commonwealth, but later, like most of Rus-Ukraine fell into Moskovite hands. The older part of the city contains the 14th-century Lyubart Castle. Three monasteries date from the 16th to the 18th century. Today Lutsk is an industrial centre. An automobile plant was constructed in the late 1970s to build the Volynyanka (LUAZ), a multipurpose vehicle for private and military purposes.
Centre and Periphery in one picture
Post-Communist but still Communist Transition
As a consequence of its colonial history as a part of larger formations – Poland, Russia, Austria-Hungary – Ukraine almost missed the moment of the formation of the active individual, whose economic activity would then form the nation, as happened in Europe during the Renaissance, the Reformation and the first industrial revolutions.
When the countries of Eastern Europe and the former Soviet Union proclaimed revolutionary programs of democratic and market development, they had ambitions to repeat successful Western models of development. These programs were not original because they were designed to rectify a distance with the highly developed West, where a tandem of democracy and market economy already proved successful. However, the first decade of the transformation was problematic: the mix of economic hardships, deterioration of living standards and lack of proper regulatory base for the market economy.
A medieval castle right in the medieval centre of the city
In the political sphere the so-called “recommunisation” emerged and the former political elites converted their political capital into economic power. Nomenklatura became a major actor of privatisation in the countries of the former Soviet Union.
The people were not prepared to adopt a new system. They did not have proper knowledge on the principles of democracy and the market economy, moreover the majority was shocked and destitute after the collapse of the USSR and could not analyse the situation rationally.
It is widely believed that communism was an imposed system of values for the citizens of Central Europe. In contrast, the Eastern Europeans perceived the communist ideals with more tolerance, and in many cases, especially in the beginning of the communist era, even with enthusiasm. In Ukraine the biggest part of population due to historical factors neither had a feeling of a national pride of “being Ukrainians” nor had a capitalist tradition before the beginning of communism. For them, the Soviet invasion was only the continuation of the Ukrainian “statelessness” and they perceived the Soviet values quite naively and frankly. That is why after the collapse of the Soviet system the people felt that these new democratic and market values were rather artificial.
While in the beginning of transformation the idea of independence sounded very romantic, later after economic crisis the people who did not have enough patriotic national feelings became disappointed and confused. They have understood the transformation as an “elite’s game” and lost their confidence in what government was doing. People’s response to the economic hardships has been an “exit” way which made society very fragmented and atomised. Economic pessimism determined the public attitudes towards transformation. However the people have not protested due to the lack of civic tradition in Ukraine. They rather have accumulated their dissatisfaction while trying to survive economically.
The vast system of elite’s networks was created under communism. These informal networks, based on political patronage, were inherited in the process of shaping the new political and economic structure. The economic reforms implemented during the Kuchma presidency were the outcome of patronage-clientele networks. Some groups gained substantial rents from distortions of the inherited economic structure in early phases of transformation.
Privatisation in such countries as Russia and Ukraine was locked by the past. This resulted in growing inequalities, poverty and uncertainty. So-called “spontaneous privatisation” enabled nomenklatura to become the owners of private enterprises in a situation when transparent laws were undeveloped and economic restructuring was badly regulated. In this case, the political capital was transformed into the economic capital. The line between private and state was fuzzy. The nomenklatura was often linked with the mafia. Paradoxically, old elites played a new role in capitalist design and influenced the nature of organisational practice in a society eroding the laws and delaying legislative reforms. Consequently, one could observe a decline of workers participation in the enterprise governance and their loss of control over managers. Thus, nomenklatura privatisation has compromised the idea of privatisation in public minds, left the expectations unfulfilled and provoked nostalgia for authoritarian rule.
Ukraine in general lacks political and cultural elite with roots stretching back to significant period of nation’s history. Decades of foreign rule and the wholesale assimilation and acculturation of various Ukrainian elites either to Polish or Russian culture produced a nation without a politically usable past.
Lutsk – a major production site for Korean, Russian and Ukrainean car models
The gap between the people and elites, shaped during the communist times, deepened even more in the first decade of transformation. As middle-class virtually did not exist, there was no real economic power that could be responsible for social stability and economic prosperity of the whole society. The majority of the Ukrainians did not have a chance to be involved in the market economy as new private actors, and the standard of living and economic conditions were critically low.
Many researchers of public opinion hold that the political elite of Ukraine is mainly concentrated on pursuing its own interests or interests of certain related economic and political structures. It is also suggested by the results of the survey conducted by the Razumkov Economic and Strategic Research Centre in September 2003 in all regions of Ukraine. 2015 respondents were surveyed. An overwhelming majority (76,4 %) held that they would not manage to become a part of the ruling elite even if they set for themselves such an aim. 10,3 % of respondents considered that it would be possible for them under certain circumstances, and only 1,5 % – that it was possible. Such attitudes testify the general society’s view of the ruling elite as a closed community, a “caste” which is almost impenetrable. Further, some 62 % of respondents said, that their children would not have an opportunity to join the Ukrainian ruling elite. 21,4 % saw such opportunity only under certain circumstances and 1,9 % thought that they would have such an opportunity. The reason for such situation lies in inefficiency of democratic mechanisms.
At the same time, the ruling elite, as before, is based on patronage and clientalism. The main criterion of many staff selections lies in personal fidelity and unquestioned loyalty to the decisions of superiors. Thus three quarters (74,5 %) of those questioned were sure, that political elite representatives exclusively pursued their own interests, 64,8 % – the interests of certain business groups or enterprises, 56,6 % – the interests of certain political forces or parties. 10,3 % of those questioned were convinced that political elite representatives effectively promoted the interests of certain regions only. At the same time, only 5,5 % thought that political elite fully supported national interests, and only 3,4 % – the interests of certain social and professional groups. Some further 6,2% claimed that they represented the interests of criminal structures or other states.
The obtained results are quire characteristic of the present Ukrainian political elite, which largely consists of red nomenclature and “new bourgeoisie”. For the former the main tasks after declaration of Ukrainian independence was a maintenance of imperious positions which gave an opportunity of state property control. For the majority of the latter the Ukrainian statehood was seen exclusively as a “business-project”.