Normal operations of Ukrposhta, Ukraine’s national postal service, came to an abrupt halt at dawn on February 24 when the first Russian bombs and missiles hit Ukraine.
On the morning of the war, Igor Smelyansky, the CEO of Ukrposhta, went to his office after being woken up by phone calls. He took his computer and destroyed sensitive data. Since then, he has moved from one undisclosed location to another, directing Ukrposhta’s operations with a phone and a laptop, in constant communication with his teams.
Ukrposhta has over 3,000 vehicles and several aircraft, 60,000 workers and over 10,000 post offices. Some of Ukrposhta’s trucks have been used to transport food and medicine in what Smelyansky calls the “humanitarian bridge between Slovakia, Poland, Romania and Poland”, which provides basic needs for Ukraine and maintains the stability of cities.
More than a million elderly people have not received their monthly pensions or needed medicines 10 days after the Russian invasion. Almost a third of the population. that is, 13 million Ukrainians, live in rural villages. Pension money is paid on a rolling basis throughout the month, with pensioners receiving their payments on different days. Currently, Smelyansky has focused on maintaining cash pension payment schedules for 3.5 million elderly pensioners. This is done by hand, at their home, each month by post.
“Before the war, we knew where everyone lived,” Smelyansky explained. With so many people displaced by the fighting, “we’ve set up a hotline so they can call us and let us know where they are, and we’ll bring them the money.” On March 5, shortly before war broke out, they resumed essential disbursements.
The national postal service should be a ready-made, mature and socially supported network system, and this is exactly how the national postal service in Ukraine works. On March 5, 2022, Liudmyla Yatsykiv, a post office worker at the Nove Selo village branch, which is on the main road between the western city of Lviv and the Polish border, counts the money for distribution to retirees. On the other side, on March 5, 2022, Maria Lukashevych, the youngest employee to join the local post office after graduating from university just three months ago, is accompanied by an armed driver and is on her way to deliver cash pensions and groceries. “I didn’t even want to know how much money we’re carrying!” But now I’m not so scared,” she said, showing the pepper spray she carries in her jacket pocket. Typically, the van is on the move every morning with stacks of newspapers for subscribers, bags of groceries, as well as packages and letters. Now that it’s war, they do more. She also has to deliver a few bags of pasta to the residents. Since there are not many shops either, Ukrposhta also sells and delivers food at state-subsidized prices. In fact, since the beginning of the COVID-19 pandemic, Ukrposhta has been dispensing prescriptions from pharmacies.
“It’s important for our people to receive a note or a package from their relatives abroad. The postal service gives the feeling that you can still have a normal life,” Smelyansky told post offices around the world not to stop sending their mail to Ukraine. “We will deliver it,” he assured them.
Whenever there is a major war, emergency or disaster, national service tends to reveal its core value. This is why the British postal service is called the “Royal” Mail. Similar to the British Army or Her Majesty’s Armed Forces, they are equally respected and have not changed in 500 years of history. This is related to the stability of the underlying social network system. In another example, even in the turbulent war years of China’s history, China’s postal service and railways were maintained, for the same reason.
However, China’s postal reform took a detour, and the postal system reform program issued by the State Council in September 2005 presented the reorganization plan of the State Post Bureau. The program also includes reform of the postal industry and postal savings controlled by China Post Group Corporation, which does not rule out listing in the future. Its reform contents include the division of universal service business and competitive business, business segmentation between China Post Group Corporation and other courier companies, and steps to be taken in the transformation of the Postal Savings Bank. It also encompasses aspects such as stamps of a certain monetary value, etc.
This reform is in line with the trend of market-oriented reform, although the regime certainly has many models as benchmarks. These would include the German model (stock company), the UK model (public stock company) or the Japanese model (government agency). That being said, the necessities of China’s current situation would still be a vital factor despite these benchmarks. The ultimate option, unfortunately, is still heavily biased towards the market-driven course.
In fact, the most crucial definitional question is “what is the national post”?
According to China’s official definition, the State Post Bureau is a sub-ministerial level state office managed by China’s Ministry of Transport, which is responsible for postal administration. The National Post Office is responsible for formulating policies and plans for the postal sector, as well as supervising and controlling postal services (including express delivery companies). As a result, China’s official definition of “national post”, apart from having limited power and financial position, emphasizes delivery service.
If reform is a matter of grand strategy, then since the war in Ukraine, the reverse side of the problem has become evident, namely the strategic definition of postal reform. In this sense, the definition of the “postal system” in China in the past has become problematic. The correct strategic definition should be that the national postal system is a unique transport system network that involves and covers the basic Chinese society, and couriers are just one of the many things that this system offers. The national postal service should be the statutory service of the national administrative region in such a national system. Thus, he must have three important characteristics: legal status, stable employment and integrated service.
Yet China’s postal reform did not go in this direction.
I remember that a long time ago, towards the end of the last century, I wrote a short article analyzing the reforms of several large public companies. These are mainly China Railway, China Post, China Guodian, China Energy and Air China. Of course, there is also the China Communication Construction Company (CCCC) and the China National Nuclear Corporation (CNNC), all of which are state-owned enterprises crucial to China’s national security and national stability. In fact, they simply cannot make market-driven changes. Their reforms can only be at the management level to achieve greater efficiency, but not comprehensive market-oriented reforms.
In retrospect, one of the reasons why China’s state-owned enterprise reform did not succeed is that it put the cart before the horse. It is noteworthy that the institutions that require market-oriented reform have not done so. Conversely, entities that should not be marketed were hopelessly marketed. In this area of reform, state-owned enterprises are at one level, and the State Council Public Assets Supervision and Administration Commission (SASAC) and the National Development and Reform Commission (NDRC) are at another level. Moreover, the relationship between these two transformation steps is reversed. At the level of public enterprises, certain stable jobs must be guaranteed, which cannot be commodified. On the other hand, marketization should be implemented at the level of SASAC and NDRC, where all political issues should be handled according to the principle of fairness and market justice. When the situation reverses, a significant number of gigantic mega-companies will appear, and almost no company will be able to compete with them. This so-called commodification has actually caused confusion in the market. SOEs have since acted as a kind of “secondary central bank”. The phenomenon of engagement in the redistribution of capital, in fact, is only a microcosm of the big picture.
The problem is that I was the only one with this point of view at the time. Countless professors, scholars, and economists have actively “contributed plans and suggestions” on how to vigorously promote SOE reform and divestment so as not to backtrack. There is no other voice to say that some things cannot be reformed, and the end result is the current situation. In my opinion, if Chinese state-owned enterprises face a disaster of the magnitude of the conflict in Ukraine, they may not be able to operate as efficiently as Ukrposhta.