Jon Thiele
International Development

Gender and economic development

Enterprise development and agribusiness

Small holder farmers

Islamic economics

Promoting cooperatives

Community-based development

Credit in economic development

Economic institutions






These essays go back several years, but I still like them because
they mix professional experience with personal observations.

This appeared in the Kiev Post, on November 18, 1997, as "When decency takes a holiday":

An old woman from a nearby village spent her family's savings to buy the apartment next to our office in the center of Lviv last spring. Then she offered to rent it to us if we needed more space. We managed well enough in the apartment we had but it was a bit tight, so I told her I'd think about it and let her know. Several weeks later, long after she'd given the key to someone else, she came to me to say she feared for her life.

The tenants had failed to pay any of the promised $100 a month, but had begun some basic repairs and told her that was good enough. When she objected, she was encircled by several young men whose leader explained that they were in the business of finding apartments for people and so, as professionals in the business, they knew they were right. Besides, he added, the tax inspector would probably be very interested in where the money came from that she used to buy the apartment in the first place, so if she didn't want trouble....

It was only a few weeks after I'd said "let me think about it" that she asked me again if we would rent the apartment. Yes, I replied, but isn't it occupied? She said "they" would be leaving at the end of the week. They didn't, and that's when she felt threatened. Every couple of weeks throughout the summer she came in to ask if I would rent the place because, she said each time, "they" had agreed to leave.

Eventually, with the encouragement of three large young men from the village who posed as sons returned from Russia and in need of the apartment, the punks left without violence. The old woman never received any rent payments. In fact, she paid the punks $1,300 for the barely noticeable improvements they had made to the place.

Earlier, during one of her visits, I suggested that she hire a lawyer to advise her and bring a suit against them. At another I suggested she turn the tax inspector threat around on them. She listened politely each time, and after each meeting my assistant told me that the punks could pay the judge or whomever more than the old lady could, so she would lose any action in any court.

That reminded me of our own attempts to get something approved-- I forget what, a bank account maybe, or a phone line. We showed our papers from the ministries that give papers to organizations like mine, and the local clerks pointed out that the papers were issued in Kyiv, and that this is Lviv, you see, so you'll need this other certificate which you get by applying to someone who isn't here right now for a different certificate that you, as a foreigner, can't have.

Criminals in uniforms, clerks without the stones to come right out and ask for a bribe, and the judges who protect them are routine here, but I'm not complaining. They are the real reasons I have a job; if things worked here, there'd be no development programs to employ me. That simple reminder and my immediate access to flights west keep me on center.

But the old woman, Alyona is her name, she aged a few more years this past summer because a simple lease agreement, an honest investment, is an opportunity for the system, her fellow Ukrainians, to take everything she has.

This was also published in the Kyiv Post (May 20, 1999). It followed a particularly frustrating development effort.

The Third Serfdom

When a young man with virtually no experience assumes the directorship of a large enterprise, and when the hundreds of new shareholders vote unanimously to give him total control when that enterprise is later privatized, one could assume either that he is a man of rare ability or that there is something not quite cricket about it all.

Large collective farms in Ukraine are privatized by granting land titles to the farm's employees, residents, and retirees. Each receives 1-3 hectares of land according to a well-understood formula that most people consider fair. Typically, 95% of the new owners will lease their parcels to one director who will lead a restructured, commercial farming enterprise, and the remaining five percent or so will lease their land into smaller private farms of 10-50 hectares each.

The plan was simple. As part of the privatization process, the soon-to-be land owners should have the opportunity to learn something about operating a farm as a business. No longer could they operate a farm as a mechanism to feed the population. No, a farm is a business, we would explain, and before you sign over your piece to anyone, you should learn something about how a farming business works.

That was the plan. A fairly complete publicity effort was made, training materials printed, and the venue prepared. Out of a potential audience of 1,850 new land owners at the ironically named "Progress" farm in Brody, Lviv oblast, not one came to the seminar. Not even one person in this small town was even curious enough to stick his head in the door.

Either the abilities of the new director had inspired true awe and allegiance among the populace, or something was amiss. We asked around and were saddened but not surprised to learn that the director had made it known that no one was to participate in any training sessions. It was a deliberate effort to keep the people ignorant of the knowledge that might be useful in improving their lives.

Confronted with specific cases where direct efforts are made to derail reform, people deal with the frustration in different ways. An enraged scream can be useful. A resigned sigh is more common. This writer turns academic.

Feudalism as a system of social, economic, and political organization disappeared in England in the sixteenth century. In western Europe, it finally ended in the 1700's. In eastern Europe and Russia, however, it held on until 1861, the so-called "second serfdom".

The term was co-opted for use in describing collective agriculture of the Soviet Union after Stalin's policy of forced collectivization had transformed the peasant into the kolkhoznik.

Ukraine is forming a third serfdom as it transforms the kolkhoznik into a land "owner".

As we recall from our days at secondary school, feudalism is an intricate network of duties and obligations linking royalty, nobility, lesser gentry, free tenants, villiens, and serfs. The modern Ukrainian economy is an intricate network of duties and obligations linking the presidency, ministries, oblast administration, raion administration, farm directors, and titleholders.

A few hundred years ago, serfs lived on and worked the lord's land and were allowed some land for themselves. In present day Ukraine, peasants lease their parcels to the director and maintain household plots to grow enough food to keep themselves alive.

Serfs could not leave the estate. Now, of course, Ukrainians have some measure of mobility-- providing they have an external passport, an internal passport, and proper registration with the local ovir's office.

Much has been said and written about Ukraine's new economy, and much of it parallels this from Webster's Encyclopedia: "Feudal society was characterized by a hierarchy of authority, rights, and power enforced by a complex legal system under which the monarchy allowed vassals to hold land, administer justice, and levy taxes."

One could go on with the comparison-- the economist P. T. Bauer, among others, argues that uncompensated labor is a form of taxation, for example-- but 700 words is enough. The point is made. Now I'll think of something else, try to decide whether to scream or sigh, perhaps.