Life in Ukraine after the Collapse of the Soviet Union

When the Soviet Union collapsed in December 1991, Ukraine entered independence with a mixture of exhilaration and dread. She had reclaimed her sovereignty after centuries of domination by foreign empires, yet she inherited an economy designed to function not as a self-contained national system but as one component of a vast, centrally controlled machinery. The early years of independence were accordingly marked not only by political awakening but by profound social and economic suffering. What many Ukrainians recall from the early 1990s is not the jubilation of independence but the shocking hardship that followed, as households struggled to survive amidst hyperinflation, industrial collapse and the disintegration of institutions that had once, however imperfectly, provided a measure of security.

The reasons for this suffering lay in the structural weaknesses of the Soviet model. For seventy years, economic decision-making had been concentrated in Moscow. Ukraine’s industrial base was large but distorted. She produced heavy goods—steel, coal, locomotives and military equipment—whose raw materials and customers were located across the former Soviet space. Her factories had little experience of competition or independent management. Prices had been fixed artificially; incentives were misaligned; and supply chains were maintained by administrative command rather than market logic. When independence arrived, the system disintegrated almost instantaneously, because nothing existed to replace it.

The collapse of the ruble zone was the catalyst for Ukraine’s most immediate hardship. As newly independent states introduced their own currencies, cross-border transactions became chaotic. The karbovanets (coupon), introduced as a temporary Ukrainian currency, rapidly became worthless. Inflation soared to extraordinary levels. Prices for basic goods could double within a week. Teachers, factory workers and doctors found that by the time they collected their wages, they could afford only a small portion of their usual food basket. Pensioners suffered the most. Decades of savings evaporated. Many reported that they survived by selling household possessions, from winter coats to kitchen appliances, in makeshift markets that appeared in virtually every city.

One pensioner from Dnipropetrovsk (modern Dnipro) recalled years later that the worst moment came in 1993, when she queued for several hours to purchase bread only to be told that the price had doubled since the morning. She described walking home in tears, carrying a single loaf whose cost represented an entire week’s pension. Her testimony was not unusual. Newspapers of the period were filled with similar accounts, although journalists themselves often went unpaid for months.

Industrial collapse followed swiftly. Ukraine’s factories, unaccustomed to operating independently, lost both suppliers and customers. Coal mines in the Donbas functioned irregularly, with shafts flooded or equipment broken. Steelworks shut down blast furnaces for lack of coal or ore. Thousands of workers were placed on unpaid leave, a category that became a symbol of the era’s absurdity: employees were neither dismissed nor remunerated. One miner from Luhansk, interviewed in 1994, described how he and his colleagues would meet daily at the pit entrance, uncertain whether the shift would proceed, and then return home empty-handed. Only small vegetable gardens and occasional barter with neighbours enabled families to survive.

In urban centres a new phenomenon emerged: the shuttle trader. These were ordinary citizens—engineers, nurses, civil servants—who travelled by bus or train to Poland, Slovakia or Turkey with empty suitcases, filled them with inexpensive consumer goods and returned to sell them in Ukrainian street markets. This informal commerce kept households afloat but also exposed them to extortion by border guards, dangers during travel and the petty criminality that flourished in the absence of functioning law enforcement.

The social fabric strained under these pressures. Alcoholism increased sharply, particularly amongst unemployed men. Crime surged. Organised criminal groups, some originating from Soviet-era sports clubs or military networks, filled the power vacuum created by an underpaid and demoralised police force. Racketeering became common. Small business owners were forced to pay protection money. In some regions the distinction between official authority and criminal influence became blurred.

Against this bleak background, the state itself struggled to maintain coherence. Ukraine’s government inherited colossal responsibilities but lacked experienced administrators, modern legislation or functioning institutions. The parliament, newly elected and politically fragmented, struggled to pass coherent economic reforms. Ministries were understaffed and under-resourced. Corruption became endemic, not merely through malice but through necessity: civil servants who were paid months late were tempted, or felt compelled, to accept informal payments. Hospitals and schools suffered similarly. Teachers reported receiving wages in goods rather than money: sacks of flour, bottles of cooking oil or, on occasion, manufactured items produced by local factories.

One headmistress from a village school in Poltava oblast described how, in 1995, the school could not afford chalk, textbooks or heating fuel. Classes were held in coats, with pupils clustering around a single electric heater. She recalled that parents donated firewood, candles and even exercise books. Despite these hardships, she spoke of the period with a sense of pride: the community, she said, discovered its own capabilities after decades of dependence upon central directives.

Another cause of profound hardship was the rapid rise of a small class of oligarchs. Privatisation, conceived as a means of distributing state assets fairly, became instead a mechanism through which former managers, party officials and well-connected businessmen acquired vast wealth. Vouchers issued to ordinary citizens were bought up cheaply by individuals who understood their value. Factories were sold for a fraction of their worth. Within a few years Ukraine developed a class of extraordinarily wealthy individuals whose influence over politics and the economy would define the country for decades. This phenomenon, common across much of the former Soviet Union, was particularly pronounced in Ukraine because of her large industrial base and weak regulatory institutions.

Despite these hardships the early 1990s were also a period of cultural reawakening. Ukraine, long subject to policies of Russification, saw a revival of the Ukrainian language in education, media and public life. Churches reopened or were newly established. Historical narratives suppressed in Soviet times were rediscovered. Civic organisations began to appear, often linked to cultural life, environmental concerns or local self-help. Independent newspapers, although fragile and often financially unstable, provided a new space for public debate. In some regions, particularly in western Ukraine, there was a growing sense of national purpose that helped communities endure material hardship.

Comparatively, Ukraine’s experience resembled that of several post-Soviet states but differed in important respects. Russia endured similar hyperinflation and the rise of oligarchs, yet she possessed far greater natural resources—particularly oil and gas—allowing her eventually to stabilise her economy. Belarus, under President Lukashenko, opted for a slower and more controlled transition, maintaining many Soviet-era structures at the cost of political pluralism. The Baltic states pursued rapid market reforms paired with determined efforts to build strong institutions and integrate with European structures, which mitigated some of the worst hardships. Ukraine, positioned between these models, experienced a more chaotic and prolonged transition because of her political fragmentation, her large and inefficient industrial base and the absence of a consistent economic strategy.

In retrospect, the suffering of Ukrainians in the early post-Soviet years was the product of profound structural distortions, institutional weakness and the sheer speed of geopolitical transformation. The Soviet Union imploded within months, yet the systems that sustained daily life—banks, factories, laws, currencies, social services—could not be rebuilt at similar pace. The result was a vacuum that exposed ordinary people to hardships they were ill-equipped to face.

Nevertheless, the resilience that Ukrainians displayed during this period laid important foundations for the future. The capacity for community self-help, the revival of cultural identity and the emergence of civil society would, in later decades, underpin the country’s democratic movements and her resistance to external aggression. The hardships were real and often devastating, but they forged a society capable of confronting the severe challenges that would follow, from the turmoil of the early 2000s to the existential struggle after 2014.