Maxim Eristavi is a nonresident research fellow with the Atlantic Council and co-founder of Hromadske International, an independent news outlet, based in Kiev.
Ryanair, Europe’s biggest budget airline, has just canceled its plans to start regular flights to Ukraine. You might think that many Ukrainians wouldn’t care — but you’d be wrong.
“Ryanair” is currently the No. 1 trending topic on Twitter and Facebook in Ukraine. I’ve been besieged by messages from my depressed friends, all of them bemoaning the airline’s decision. So why the fuss?
It’s because this story casts a harsh light on the country’s unwillingness to change. After months of negotiations with the government, Ryanair decided to cancel its plans when Kiev Airport, the country’s largest, refused to meet the airline’s demands. The company’s official statement pulled no punches: “Ukraine is not yet a sufficiently mature or reliable business location to invest valuable Ryanair aircraft capacity.”
So what does that mean? It’s simple. Right now the Ukrainian airline market is for all practical purposes a monopoly, controlled by one oligarch-owned airline. (While some foreign airlines are currently allowed to fly into Ukraine, it’s politically well-connected Ukraine International Airlines that controls the most lucrative routes and airports, and bans the outsiders from offering lower prices as a condition of entering the market.) By luring Ryanair, the government could have achieved two big goals at once: demonstrating Ukraine’s openness to foreign investment and showing that foreigners can safely put their money into the country even as it continues to fight a Russian invasion in the east.
But there’s more to this story than just another standoff between reformers and oligarchs. It reveals the depth of the economic trap that continues to plague Eastern Europe.
“This shows why we never manage to get nice things in Ukraine,” as one friend put it. People here exulted recently when the European Union granted us visa-free travel, but the reality is that it’s often just too expensive to travel there. Because of our market monopoly, ticket prices for the nearest E.U. destination start at $150 to $200 — out of reach for many Ukrainians. Allowing low-cost airlines such as Ryanair to enter the market would cut the price in half. Small wonder that many people feel that they are once again being robbed of choice.
Freedom of choice: This is the thing that many of my progressive friends from wealthy countries don’t understand about Eastern Europeans’ eagerness to welcome foreign investment. Progressives in the developed world often identify international business with the ruthlessness of unrestricted capitalism. But for progressives in our part of the world, the presence of foreign companies represents the freedom of choice of which we are so often deprived.
My friends in the United States and Western Europe who assume that those of us in poor nations aren’t educated about the evils of unrestricted consumerism are horribly patronizing. Yes, of course, there are undoubtedly some multinationals that abuse their market power in developing countries. But if you live in a developed country, you can always choose to boycott their services or goods. You have the luxury of choice. People in places such as Ukraine don’t. For us, the entry of foreign companies offers the possibility of freedom from the oligarch-imposed version of slavery.
Imagine a country where most paying jobs are in the business empires of oligarchs, who face zero competition from foreign companies. Your wages will be 10 to 20 times less than in more competitive markets. When you receive your paycheck, at least a third will be deducted for taxes that go to support state institutions that don’t work for you but are used and abused by oligarchs for their political and business interests. The rest of the paycheck is spent on buying oligarch-produced services and goods by monopolies that big businesses secured through exploitation of the same state institutions you pay for.
I clearly remember the first time I bought a shirt in a store overseas. It wasn’t about the quality of the product. It was, instead, that liberating feeling of being able to buy something that was worth what I was paying for it, rather than having to buy something of poor quality at a high price, as is usually the case at home.
It’s not about the pursuit of consumerism — it’s about freedom of choice. That’s why people stood in line for hours at the first McDonald’s in Moscow in 1990. That’s why people were willing to die on Independence Square in 2014 to defend a free-trade agreement with the E.U. That’s why the fight to admit foreign competition in places such as Ukraine is not about just about business. It’s about liberation.