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31 October, 2018  ▪  Maksym Vikhrov

Death or evolution?

Ukraine seems to be following European trends as its rural areas go through changes. Can and should anything be done about it?

The notion that Ukraine’s rural areas are in decline has been subject to public debate and every election campaign is filled with promises to revive it. The problem is very real. Rural areas are home to about a third of Ukrainians but in the last 18 years, this population has fallen by close to a quarter, 23%, from 16.9mn to 13.0mn, while urban populations have declined just under 16%, from 34.8mn to 29.3mn, according to Derzhstat, the state statistics bureau. Still, promises to revive the countryside are little more than populism looking for a voter. Given socio-economic trends, there is no realistic program that can save rural areas in Ukraine: depopulation will continue, infrastructure will continue to decay, and many villages will slowly disappear.

All this is far from being a purely Ukrainian issue. It’s happening all over Europe, and indeed, all over industrialized countries. Driven by profound economic and technological factors, no national government has been able to stop this trend yet. However, it’s governments that will determine how painful these changes are for their rural citizens and how high costs attached to them will be for the entire society.

A demographic portrait

What does Ukraine’s countryside look like in socio-demographic terms? According to the Institute for Demographic and Social Studies (IDSS) at the NAS, slightly over half of rural residents, 50.3%, live in larger villages, meaning those with a population of over 1,000, about a quarter, 26.3%, live in villages with a population between five and nine hundred, while 17.0% live in hamlets of 200-499 residents and the remaining 6.4% in even smaller settlements. It’s precisely due to these tiny villages that the overall number of rural residents is shrinking.

Official statistics don’t paint a full picture of this process: Derzhstat, the state statistics bureau, says that from 1990 through 2018 only 426 population centers disappeared from the map. However, the real number of ghost villages is far larger: in 2014, 369 empty villages were simply not removed from state records, according to a 2017 IDSS report. Another 4,684 villages were on the verge of disappearing back in 2015, with less than 50 residents. In short, in the next few decades, the rural population of Ukraine is likely to decline by another 17%. The most noticeable changes were in Sumy, Chernihiv and Kharkiv Oblasts in the northeastern corner of the country, where depopulated villages constitute 38.5%, 32.5% and 30.5% of all rural settlements. 

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The main reason for dying villages is demographic. The average age in rural and urban areas is not very different, at 40.5 and 40.7, but in rural areas, the situation is not consistent across the board: the smaller the settlement, the older its residents. Whereas villages over 1,000 in population generally have 21.0% elderly residents, those that are depopulated, that is, with populations of less than 50, 38.0% are elderly, compared to the national average of 21.6% for rural areas. This, of course, affects the mortality rate: where there are 1.9 deaths for every birth, in these dying hamlets there are 7.3 deaths for every birth. In short, where the population is more than 50% people of pensionable age, experts consider the settlement to be in decline, and where there are more than 65% pensioners, the settlement is dying. In this number are villages without any children age 0-17, and 19% of all Ukrainian villages fall into this category.

Another factor that has been contributing to the depopulation and aging of rural areas is labor migration. For instance, in 2001, 25.6% of the residents were working elsewhere, but by 2014, that was up to 54.9%, more than double. Of these, 66.9% had moved to other cities to work, 20.0% had moved outside their oblast, and 12.7% were working outside the country, according to the same 2017 IDSS report. Needless to say, a good share of these migrants will never come back.

A losing proposition

When people leave rural settlements, socio-economic problems become more urgent. First of all, wages in the farm sector are generally among the worst of all sectors. According to Derzhstat, the average wage in agriculture was UAH 7,500 as of July 2018, whereas it was UAH 9,800 in manufacturing, UAH 9,700 in retail trade and so on. What’s more, villages typically have a larger share of poorly skilled or unskilled workers. In 2015, 38.7% of rural residents were employed in the simplest of trades, compared to only 9.1% urban areas, whereas only 17.1% of the residents were specialists and professionals, compared to 35.5% in urban areas. The level of unofficial employment is also high, with 42.6% of rural residents working in the shadow economy in 2015, compared to 17.2% in urban areas. Moreover, village incomes tend to come from pensions and other benefits, the products of people’s own gardens, and only 34.4% on average in the form of wages, compared to 55.7% in urban areas. Of course, rural areas have a lot more homesteads, where no one outside the family is hired: homesteads constituted 46.2% in 2014, according to IDSS.

However, homesteading cannot support rural families with decent incomes: in 2015, only 17.5% of Ukrainian homesteads owned farming equipment, only 15.2% hired outside workers, and the sale of farm products brought in only 11.5% of total household earnings, according to IDSS. Theoretically, farmers should be the backbone of local economies, in place of the inefficient collective farm system. As of 2014, there were 52,500 businesses, with an average of 1.7 per village, among whom 71.3% were actually farms. But they did not revive the labor market: data for 2014 shows that of those individuals engaged in agriculture, only a tad over 3.0% actually worked on farms.

Nor did agriholdings revive the rural economy: with all their cutting-edge equipment, they had little need for the number of workers that had jobs at kolhosps or at pre-soviet farming enterprises. Since land is the main resource that rural residents still hold and Ukraine has no land market, it’s no surprise that, on top of everything else, rural poverty is higher than poverty in urban areas. In 2013, relative to the subsistence minimum, this indicator was 11.8% in urban areas and 28.9% in the countryside according to IDSS.

Poverty and depopulation lead to a decline in the local infrastructure as financial resources and the market gradually stop being able to provide support. For instance, in rural areas in 2013:

-      61.8% of their households still had no indoor plumbing,

-      45.7% had no basic personal services such as barbers, dry cleaners, shoe repair,

-      41.8% had no access to timely ambulance services,

-      28.5% had no healthcare facility nearby,

-      24.4% had no daily bus service to bigger towns,

-      23.5% had no hardtop roads whatsoever.

In part, such problems can be mitigated by reforming the medical and educational systems, carrying out targeted budget-funded programs, and so on. However, as the network of hamlets continues to shrink, maintaining and developing this infrastructure will be harder and harder. It’s hard to understand under what conditions and at what cost a pharmacy, shops, hair saloon, daily buses to the county center, and other civilized infrastructure might appear. Of course, the situation isn’t the same across the board, but the majority of depopulated, half-dead villages are in a difficult situation that is simply not resolvable.

Some might draw the conclusion that Ukraine as a state has suffered an historic defeat and provide incapable of saving its own rural areas. But in fact this kind of process has been going on in rural areas in the European Union for decades — and not only. One third of the EU population lives in rural areas and, just like in Ukraine, it is shrinking rapidly. Eurostat demographers say that by 2050, the EU’s urban areas will gain another 24 million, while its rural population will decline by at least 8 million. Some tend to associate the decline of the countryside with the collapse of the USSR, but 70% of rural settlements in the EU were already depopulated in the 1960s.

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By the end of the 20th century, the number of regions that were dying off declined and stabilized at 40-45%, and remained in that state even at the beginning of 2010. In various countries, of course, this process has varied. Where in older EU members, only 35% of their rural settlements are currently depopulated, in countries that joined the Union since 2004, the average is 60%.  Indeed, in many of them — Lithuania, Estonia, Bulgaria, Latvia and Hungary — nearly 80% of rural counties are dying off. According to the European Territorial Observatory Network (ETON), depopulation is linked to the very same socio-economic symptoms as in Ukraine: shrinking potential on local markets, reduced access to and quality of services, deteriorating infrastructure, joblessness, an aging population, and so on. And so, as in Ukraine, the negative socio-economic phenomena are more felt in the village than in cities. For example, in 2016, employment levels were 15% lower in Bulgarian countryside than in its cities, 7% lower in Slovakia, 6% lower in Estonia, and 3% lower in Hungary, and according to the European Commission.

What is causing both European and Ukrainian rural areas to decline like this? Mainly it’s due to profound changes in the nature of agricultural production. Highly efficient equipment that turns the soil means millions of working hands are no longer needed, and where people are needed, they are hired on a seasonal basis, often from other countries. In this way, country dwellers have lost the economic foundations of their existence and have had to adapt to the changes — usually by moving to cities.

A similar process is underway in the manufacturing sector, where robots are gradually replacing humans, but the consequences of this are most felt in the village. It turns out that, compared to densely populated areas, village communities are far more vulnerable: depopulation affects them far more and local economies find it more difficult to adapt to changes on global markets. Moreover, the main migration flows tend to come from cities, not from the countryside. Moreover, social mobility is far more flexible in modern cities and easier to take advantage of, plus there are more opportunities to improve one’s well-being, greater access to services. Clearly, the situation does not favor rural areas.

Obviously, it’s just a matter of time before Europe is completely or nigh-completely urbanized and there is little sense to try and stop this process. Still, national governments can and should soften the negative impact on rural areas in the meantime. Moreover, however deeply this socio-economic crisis is hitting the European countryside, its worst impact is still significantly milder than in Ukraine. Partly this is due to the minimal overall socio-economic gap between rural and urban areas in the EU. Still, this is the direction that Ukraine should move in: establishing regional schools and district hospitals. The question is only how consistent any reforms will be and whether the Government will find the right balance between effective support for rural areas and populist subsidization places that are in a terminal crisis state.

Translated by Lidia Wolanskyj

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