Why Ukraine? Just Take A Look At Their Neighbors

To understand the Maidan protesters in Kiev, just go to Prague, Warsaw and beyond. While other post-Soviet bloc economies have emerged, Ukrainians know too well that their leaders have failed them.

Protesters sing the blues in the Ukrainian capital
Protesters sing the blues in the Ukrainian capital
Dmitri Oreshkin


MOSCOW — Do Russians care what happens in Ukraine? It’s a complex question. A 2007 survey showed that 51% of Russians actually consider Russians and Ukrainians to have the same ethnic roots. But opinion polls about the Ukraine protests in particular show a surprising lack of solidarity.

In fact, 51% of Russians say they don’t care what happens in Ukraine. They consider it a domestic Ukrainian issue, sort of like a cop responding to a domestic violence call but refusing to intervene because it is “between a man and his wife.” Though they may feel theoretical solidarity with their fellow Slavs, a large percentage of Russians still oppose sending money to Ukraine and giving the country steep gas discounts.

But the issue in their neighboring country isn’t a question of “sphere of influence,” and Ukrainians aren’t protesting out of self-hatred for their Slavic roots. It’s the standard of living, stupid.

There is something more basic at stake here. Poland, the Czech Republic, East Germany, Slovakia, Hungary and other former Soviet Bloc countries have figured out how to create an acceptable standard of living for their citizens. And now Ukrainians, Belorussians, Moldavans and Georgians want the same. It’s that simple. They see the former Soviet Bloc countries able to pay market rates for gas imports and yet still provide a standard of living that is two or three times higher than that in Ukraine and Moldova.

The benefits of modernity have arrived in Prague (Aktron)

It takes a very specific type of person not to understand the difference between the two situations: specifically, an ardent supporter of the Ukrainian regime. Ordinary Ukrainians and Moldovans understand everything perfectly. The difference in standard of living is starkly obvious.

So what is the strategy of leaders who are painfully aware of their own inability to compete regionally and globally? They launch censorship programs and investigate everyone who tells the truth about systemic corruption and government ineffectiveness. They try to obstruct or slow the process of change.

Change will come one way or another

But change is inevitable. As incomes rise and citizens’ horizons expand, people begin to expect more from their government — in terms of health care, security, education, the environment and the free flow of information. If people are too poor to have cars, they don’t care if the roads are good. Once they buy a car, they care about potholes, traffic jams and corrupt traffic police.

The first reaction of a government unaccustomed to conversations about rights is reactionary: There has never been anything like this before, and we’re not going to change now!

But they’re wrong. What happened in Czechoslovakia in 1968 is one example of how things could play out, but regularly scheduled, democratic elections provide another potential outcome.

And what does Ukraine really want? It’s not to join the European Union tomorrow. The EU is not really that eager to have them, and any rational person understands that. The EU hasn’t even quite figured out how to deal with it’s current black sheep — Greece, Spain and Portugal. The last thing it needs is another gift from the great Communist past.

No, Ukraine wants something else: European standards. Human rights. Respect for private property. Honest, independent courts and fair elections. A competitive economy. Leaders who are accountable to the voters and a government free from corruption.

Where to now in Kiev (Smerus)

But will President Viktor Yanukovich’s ultimate replacement be any better? It’s uncertain, but the protesters at Maidan are as smart as we are, and they understand the gamble perfectly. They are counting on a compromise. They will make any successor more accountable and easier for voters to keep an eye on. People are freezing their butts off in the cold not for a specific person, but for a change in the system.

Yanukovich started his career in office by putting his most important challenger in prison. He freed his hands, you could say. Then he immediately stuck them in the state’s purse. At the same time, he was making it impossible to leave power because a loss would mean going to jail.

Now Yanukovich is desperate. He doesn’t know how to establish or maintain balance. He overestimated his own power and underestimated the power of the popular opposition. He would lose early election, and he would also lose in the regular elections in a year.

It’s unlikely that he could mobilize his supporters to commit fraud on a massive enough scale to get him re-elected, and the local governors he appointed are not going to risk their own careers by sticking their necks out for him. His fellow oligarchs are feeling pressure from Europe, where their businesses and money are. It’s bad times for Yanukovich. It’s also bad times for anyone who stands with him.

He has to retreat on everything, and perhaps that is where he can find redemption. A weak, dependent Yanukovich might be just the person to stay in office for another year and then quietly retire to a settlement for rich losers.

The alternative to a sad ending for Yanukovich is a much sadder ending for all of Ukraine — one that leads to nothing less than civil war and partitions, like Yugoslavia. Even if civil war doesn’t break out, that would be almost the same as a lost civil war, with one party feeling complete impunity to do whatever it wants.

It’s not something anyone wants to dwell on, but it seems like it’s closer and closer to becoming reality.

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Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum


SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.

It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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