Gap widening between Ukraine’s rich and poor

While most Ukrainians remain extremely poor, the super-rich have seen significant increases to their personal wealth over the past year, newly published data shows.

Days after Credit Suisse, the Swiss multinational investment bank, published research showing that Ukrainian people remain some of the world’s poorest, more data shows that the richest Ukrainians have substantially increased their wealth and will continue to do so.

The latest ranking of the 100-richest Ukrainians, published by the Novoe Vremya news magazine, shows that nine out of 10 of Ukraine’s richest citizens increased their wealth through the past year.

In total, the combined wealth of Ukraine’s 100 richest people stands at $37.5 billion, a 43 percent increase over 2017. The researchers who compiled the list say the wealth of these 100 individuals is growing 12 times faster than Ukraine’s total GDP, and the growth isn’t expected to slow down.

Rinat Akhmetov – the owner of the Dontesk-based industrial holding company SCM Group, who is now worth an estimated $12.2 billion – is still Ukraine’s richest man by far, having increased his wealth by 76 percent or $5.3 billion over the last year.

Viktor Pinchuk, the industrialist, media magnate and former politician who co-owns EastOne Group and Interpipe, is now worth an estimated $2.7 billion and takes the number two spot on Ukraine’s rich list.

Ukrainian President Petro Poroshenko, a confectionery tycoon and one of the world’s richest leaders, is now considered Ukraine’s sixth richest man, having increased his wealth by 10 percent to an estimated $1.1 billion.

Ihor Kolomoyskyi, now worth $1.6 billion, has increased his wealth by 60 percent and Gennadiy Bogolyubov, worth roughly the same amount, has increased his net worth by an estimated 113 percent. Both businessmen are co-owners of the scandal-ridden Privat Group.

Of Ukraine’s 100 wealthiest billionaires and multimillionaires, 26 have seen modest reductions in their net worth.

As is usual with such lists, almost all of the richest individuals are men: only one woman, pharmaceutical executive and director of Farmak, Filia Zhebrovska, appears in the top 50.

Some economists and observers have said that economic evaluations for Ukraine and its citizens are difficult. They can often be skewed because of the nature of Ukraine’s large shadow economy, where large amounts of salaries, transactions and assets are undeclared and untaxed.

As Ukraine’s super-rich significantly increase their wealth, most Ukrainians are not seeing improvements in their living standards or overall net worth. Wage and pension growth has not kept pace with the cost of living in Ukraine.

On Oct. 18, a new Global Wealth Report released by Credit Suisse ranked Ukrainians as some of the world’s poorest people, lagging behind countries like Nepal, Bangladesh and Cameroon in terms of their personal wealth.

The study showed that Ukrainians have median personal wealth, or net worth, equivalent to $1,563 per adult resident, the same as nearby Belarus but less than countries like Bangladesh ($2,322) Kenya ($2,306) and Nepal ($2,054).

Ukraine now ranks 123rd out of 140 countries in terms of its citizen’s median personal wealth, according to Credit Suisse.

Ukraine recorded GDP of almost $113 billion in 2017 – about $2,522 per capita – according to the World Bank, but many observers say that this isn’t enough to improve the living conditions and personal wealth for the nearly 43 million Ukrainians.

A separate study recently published by the United Nations Development Program found that, despite renewed economic growth, about 60 percent of Ukrainians still live below the official poverty line.