Thirty years ago, I began an incredible adventure when I moved to Kyiv to begin a two-year stint as the country manager for Seagram’s, a large multi-national wine and spirits manufacturer. The Soviet Union had recently fallen apart, and Seagram’s, like many other large international corporations was eager to tap into a new market, and so it quickly embarked on an ambitious plan to create a slew of new subsidiaries in Eastern Europe, including Seagram’s Ukraine. I was selected to lead that effort, and thus my life became directly involved with Ukraine’s efforts at weaning itself from a century of communist oppression and exploitation and striving to join the wider world of democracy and free enterprise.
It was a heady and eye-opening experience. I knew, of course, that living in Ukraine would be significantly different from my comfortable, middle-class life in Canada, but I was poorly prepared for the challenges I would have to face. By the time Ukraine was finally able to achieve its independence, seventy years of Soviet rule had done significant damage not only to the Ukrainian economy, but also to the psychological make-up and ethos of the Ukrainian people. Their individuality, ambition, initiative, honesty and work ethic had been progressively eroded, and life had become essentially just a desperate struggle for survival. It was all a game, a sham where, as the cliché joke current at the time went, “you pretended to work, and the state pretended to pay you”. You kept your opinions to yourself and created a false front for the outer world. The black market became as important as the official, commercial one. Almost everyone indulged in petty theft of state resources. The average consumer spent an inordinate amount of time standing in line to buy scarce goods that were often in “deficit”. Everyone knew that most government officials were corrupt and dealing with them usually involved passing hard currency under the table.
When Ukraine unexpectedly became independent in 1991, chaos ensued, as neither the new supposedly democratic government, nor the population at large were prepared to deal with the new reality. The economy nose-dived, since the Soviet economic system had been heavily centralized, and the sudden forced shift to decentralization wreaked havoc on production, distribution and employment.
Runaway inflation was just one of the many headaches that Ukrainians had to cope with. In 1991, the first year of independence, inflation in Ukraine reached 390%. A year later, it stood at 2,100%, and in 1993 it reached the mind-blowing level of 10,256%. Shortly after independence, the Ukrainian government issued a new temporary currency called the coupon to replace the former Soviet ruble. This new currency became increasingly worthless with each passing year. I can recall that by the end of my stay in Ukraine in 1994, exchanging a small number of US dollars would get me a thick wad of coupons with a face value in the millions. A 100,000 coupon note was the most common denomination in use. It would take several more years to achieve currency stability, when finally in 1996, the government issued a new currency, the Hryvnia, which could be obtained at the official exchange rate of 100,000 coupons to 1 Hryvnia.
What took much longer to change was the mindset of most people when it came to adapting to an open, free-market system. Being in the retail business, I quickly became aware that the concepts of customer service, quality control, consumer choice and free enterprise, were totally foreign to someone brought up and indoctrinated in the Soviet mentality. Mediocrity pervaded almost every aspect of Soviet life, and it was an uphill struggle to try and get the average citizen to change their expectations, habits and daily routines. It would take a generational change for Ukraine to begin to integrate into a more European and global reality. Even today, Ukrainians, particularly the older generations, still struggle to adapt to the norms and practices that we in the west take for granted.
What is encouraging is the fact that the younger generations of Ukrainians that did not experience “Soviet life” are proving to be as intelligent, talented, creative and capable of competing with their peers anywhere else in the world. Ukraine’s performance in the current war with Russia also shows that while Ukraine has progressed significantly in modernizing and adapting to freedom and democracy, Russia remains stuck in a five centuries long nightmare of stagnation, despotic rule and oppression. Ukraine, once it overcomes its current struggle with Russian barbarity, can look forward to a bright, progressive future. Russia, on the other hand, has yet to overcome its historical demons, and it will take more than a few generations for it to confront its sins and join the rest of the civilized world.
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