Saving All My for Yu

I love that song, Whitney being one of my teen queens. I love that heart-shaped check mark, BYuT being the party I gave my heart to in the September parliamentary elections.

Of course, I was a little younger than a teenager when "Saving All My Love for You" came out. I was a Soviet 5-year old living in one of the two superpowers that could annihilate each other at a moment’s notice. (Needless to say, we didn't have MTV at the dawn of perestroika.) Unsure of what the future held for them, my parents and grandparents nevertheless decided to save, and so did millions of other Soviet Ukrainians.

Now that I speak some English, there’s something I heard about those savings on Wednesday night. It sounded like a song, too, and I want to share it with you.

If you’re looking for materialistic terms like principal, interest, future value, CPI, indexation, etc, you better quit right now — or it will break your heart. Nowhere does it mention them. Remember, the heart emoticon can be expressed as <3>

So, forget the finance. Enjoy the romance.

I sincerely greet you. We’ve celebrated New Year and Christmas holidays. The time has come to get to work. I want us to start getting used to the idea that politicians carry out the promises they make during election campaigns. We promised to refund the savings lost with the former Oshchadbank of the USSR, and we are doing it. On January 8, depositor registration in Oshchadbank Ukraine began. To register, bring your passbook, a photocopy of your passport, and your ID number. [Ukraine still relies on the internal passport system. A person’s ID number is the equivalent of a social security number.]

At the bank’s branch, you will be met by an administrator who will assist you with all the required paperwork. In a matter of three days following the registration, the money will be transferred to your account. If your deposit does not exceed 1,000 hryvnias [$200], you will receive the full amount [In fact, deposits were made in Soviet rubles.] But if your deposit is more than 1,000 hryvnias, you will receive your first payment of 1,000 hryvnias. And then we will continue. You will decide how to spend this money: whether to take cash or to leave it in your Oshchadbank account at the annual interest rate of 13.5 percent.

I ask you, my dear ones, and especially elderly people: do not worry and do not stand in long lines. Deposit registration and savings disbursement are not time sensitive. May God give you good health, and each of you will be guaranteed to receive what is earmarked in the budget. Our task is to organize the payout so as not to provoke accelerated inflation, so that the money that is coming back to people will not be lost on its way to the store. A responsible government should support the savings payout with a host of counter-inflation measures.

That’s why we will offer, as a supplement to the 1,000 hryvnias, which you will receive in cash, to use according to your wish the remainder of your deposit to pay for utility debt and current bills, to pay for your kids’ education, and to pay for durable consumer goods such as: television sets, refrigerators, and other consumer electronics. In a month’s time, the government will pass related regulations that will allow you to use your savings to buy goods and services. It’s just that some time is needed to work out the related active and failsafe mechanisms.

You will get all the answers to your questions regarding the savings payout by calling our hotline toll-free: 8-800-501-34-10. Wrong were those who dismissed our statements about returning the lost savings as hollow campaign promises. Our team keeps its promises. This year, the amount paid out will be 30 times as much as our predecessors did in 2007, and five times as much as has been returned to the depositors throughout the 17 years of Ukraine’s independence. And this is just the beginning.

Our work on returning the lost savings is eliciting a critical and sometimes even hysterical response from our political opponents. I don’t want to waste time arguing. We’re giving the money back, and that’s it. It so happened that the real work on savings compensation began at Christmas time. Given this opportunity, let me send my New Year and Christmas greetings to you once again, and let me ask for God’s blessing for a good cause. Good luck!

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Shortchanged on Soviet Savings

Every election campaign, talk of refunding Ukrainians for their Soviet-era savings finds its way into the hearts of voters. Now that Tymoshenko has found her way back to government, it’s about time she walked the talk. But will she?

Under the Tymoshenko plan, each account holder will be entitled to an equivalent of $200 in compensation payments. According to earlier statements, only 60 percent of Ukrainians who held accounts with Sberbank, the Soviet savings bank, will be “fully compensated.” Deposits of less than 2,000 Soviet rubles will have priority. So, unless your savings put you south of 2,000 rubles, you’re a fat cat. Here’s a quote from PM Tymoshenko:

After an account check with Oshchadbank [the Ukrainian successor to Sberbank], everyone owed by the bank will receive up to 1,000 hryvnias in cash depending on the amount deposited. In the near future, we will allow the owners of lost savings to pay for consumer goods, utility bills, and other services out of their bankbooks.

So, if my parents had 6,000 rubles on deposit in the mid 80s, which could buy a Zhiguli, all they get is $200, a free haircut, and that's it? And you call that fair? And what about those coal miners and industry workers who had up to 20,000 rubles on deposit?

“This amount is approximately half of what was usually cited. We plan to initiate a comprehensive refund” is another cryptic quote. Exactly what indexation rate are we talking about? Does it reflect the time value of money? Does it take into account the value of a deposit at the time it was made, as measured by the chronologically equitable basket of goods and services?

For deposits made prior to perestroika and the ruble overhang of the late 80s/early 90s, there is no equitable indexation rate below 1:5, plus interest owed. In other words, once we arrive at CPI figures, one Soviet ruble of savings should at least translate into five Ukrainian hryvnias. A deposit of 1,000 Soviet rubles made in December 1981 does not equal a deposit of 1,000 Soviet rubles made in December 1991.

In fact, there is no economic vehicle for turning around the issue of “lost” Soviet-era savings without righting some of the wrongs of the privatization/grabitization era.

By law, every Ukrainian citizen received a piece of paper called the “privatization certificate,” a legitimate ownership claim on Soviet public property. But somehow only a fraction of Ukrainians received value for their claims — and some received billions of dollars worth of property. Why?

Unless this question gets some serious consideration, the idea of $200 as a compensation sounds as another bad joke. We’ve already heard the unfortunate suggestion of making the coal miner’s job a dream for every Ukrainian kid. And guess what — hardly a month passes by without a coal mine accident.

Sources:
http://www.pravda.com.ua/news/2007/12/23/68877.htm
http://www.gpu.ua/index.php?&id=200406
http://www.sovmusic.ru/p_view.php?id=32
http://www.sovmusic.ru/p_view.php?id=48
http://www.sovmusic.ru/p_view.php?id=52
http://www.sovmusic.ru/p_view.php?id=53
http://aes.iupui.edu/rwise/banknotes/russia/RussiaP222a-1Ruble-1961-donatedoy_f.jpg