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13 Jan, 2008 08:06

Rush for Soviet cash leaves one dead in Ukraine

A man has died in Ukraine after thousands of people queued for compensation at banks across the country. It followed the government's decision to start paying people who lost their savings after the collapse of the Soviet Union.

More than 17 years after the collapse of the Soviet Union, and the queues are back the Ukraine. Reminiscent of days gone by, the long lines in the capital Kiev were not for food but for cash.  

Thousands of Ukrainians flocked to banks to be compensated for savings they lost in the chaos following the break-up of the Soviet Union.

One man died of a heart attack after he spent hours in a queue. In another incident in Kiev, two bank officials were beaten when they tried to calm an angry crowd. One of them, a woman, is seriously injured.

The sheer demand for cash meant only some people were able to get their money from Oschadbank.

Ukraine's newly appointed Prime Minister Yulia Timoshenko insists the country has enough cash to make the payments.

She said the long queues were caused not by bad organisation but rather by a lack of confidence.  She said people feared there wasn't enough money to go around. She said Ukrainians rushed to get their money because most of them are too poor to wait.

Timoshenko has promised to pay $ US 1.2 billion this year out of an estimated $ US 26 billion owed to Ukrainians.

The government has also offered non-cash payments in the form of vouchers to pay utility bills or some consumer goods.

Ukrainians will get up to $ US 200 for money they had stashed away in Soviet times. For many, this is inadequate compensation for a lifetime of lost savings.

But it is an important gesture to restore confidence in the country's new leadership.

“We have to get even something from them! Before, we had roubles – which were expensive. And now we are getting hryvnias [Ukrainian national currency]. But we have to get money anyway,” says one of the bank customers.

Some experts say the move will restore the citizens' trust in the government and benefit needy pensioners and lowly-paid government workers.

Other analysts have dismissed the measure as a populist move that will bust the country's budget and further increase already high inflation.

Former Soviet Republics, Lithuania and Kazakhstan have already returned some or almost all of Soviet-era savings to their citizens.