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Ukraine: Market Economics Proves Uneconomical

Kyiv, 16 January 1998 (RFE/RL) -- Maksim and Aleksandr, two air-traffic controllers in Kyiv, recently augmented their meager and intermittent government salaries by selling a pig at one of the city's many farmers' markets. For reasons that will be evident, they declined to give RFE/RL their full names.

The pig-selling process took four grueling days. It wasn't fun. But their experience was instructive of the convoluted, corrupt, and wasteful ways in which the simplest business transactions are conducted in Ukraine these days.

The bustle and crowds in the markets of Kyiv suggest a triumph of market economics. But entrepreneurs like Maksim and Aleksandr find that the markets are hardly free.

They started their venture by driving to a nearby village to buy and slaughter a pig and to bring the pork to market. They timed their arrival at Kureniy Market for long before sunrise to assure they could rent a good location.

The law sensibly requires that meat be inspected. And Lyubov Arsienko, chief of the meat inspection laboratory at another market - the Volodmyrsky - said that each pig carcass sold at a Ukrainian farmer's market is inspected individually and thoroughly. That includes document checks and chemical, radiological and microscopic examinations -- all for a fee. It can take a half-hour or more.

Knowledgeable traders say an alternative process is available. One described it as follows: "So many pigs come through here, there's no way the inspectors can do 20 individual tests on 100 animals a day. If they know you, they will stamp your papers immediately."

For pork sellers Maxim and Alexander, the process was longer, not shorter. Their inspector wanted samples of the pig's organs, not just the meat for sale. Maxim and Alexander had left the innards in the country. So they borrowed samples from a neighboring seller and bribed the inspector to accept them.

They next hired the market's butcher to carve up the pig, also for a fee. Maksim and Aleksandr spent three days of selling to convert the meat to cash. Meanwhile, they paid parking fees for their car, and refrigerator storage fees for their wares, and daily rental fees for their concrete slab to lay out their pork chops.

Strangely enough, organized crime did not take a bite out of Maxim and Aleksandr's pig, but that was an exception. The market where they sold it, the Kureniy, is new, private, and patrolled by armed security teams, whose job includes chasing off possible racketeers. The rules about protection vary from market to market. At the Volodymyrsky - and in most other Kyiv farmer's markets - large men in leather jackets take a ten-dollar daily cut from a pig trader. At the Heroiv Dnipra, market butchers uses axes and knives to act as their own security, one trader said.

Selling pork at the relatively crime-free Kureniy market costs about twice as much as at the Volodymyrsky. "The difference in prices is almost exactly the same as paying the mafia," complained a trader.

Maxim and Alexander netted the equivalent of about 30 U.S. dollars each for their four days of frustration and work. They say they've now retired from the pig-selling business.