How to reanimate the economy of wartime Kyiv

25 April, 05:06 PM

Unless we enact a plan for Kyiv’s economic recovery, residents of the capital will be queueing for humanitarian aid in the next quarter.

On April 23, I decided to stroll around Podil. Hardly to brighten my mood – that’s not really possible after the genocide of Ukrainians in Bucha and Mariupol. I wanted to gauge wartime Kyiv’s morale; take a look at the problems the city is facing.

Well, as a consequence of the war, Kyiv is empty and silent these days. The usually rowdy McDonald’s in Poshtova Square is quiet. Lviv Croissants, normally a popular establishment on Spaska Street, is empty.

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It took me over two hours to get from Svyatoshyn to Kontraktova Square – an indicator of problems with public transit. Municipal transit companies, Kyivpastrans, and Kyiv Metro are operating at low capacity – transit timetables are reduced to a thread-bare level.

This leaves those still working in the capital to rely on either their cars, or on Uber/Bolt to get to work. Even somewhat prosperous companies have cut their payroll expenses, so few people can afford to use ride-hailing apps every day.

And while public services in some districts – Darnytsia and Obolon – function well, sweeping the streets and planting flower gardens, Svyatoshyn and Pechersk seem to be faring worse.

Even public toilets in those districts aren’t open, further complicating moving around Kyiv. Large grocery stores like Silpo and Novus are open, so I’m not sure who and why decided to shut down public toilets.

Some of what Vitaly Klitschko, the city’s mayor, is doing, could be difficult for the residents of the capital to understand. Let’s examine what I mean by that.

Former Colombian President and Nobel Peace Prize Laureate, Juan Manuel Santos, once said that war is a popular thing, politically. It’s popular to defeat the enemy, to capture trophies. That’s why all politicians in a country at war are focusing on military stuff, even though that is the purview of the head of state, defense minister, and other security officials.

A selfie next to a ruined building is emotionally impactful and will garner a lot of likes, while routine management of the city’s administration and economy won’t captivate such a big audience on Twitter or Instagram.

Alas, Klitschko could not resist the temptation. But social media posts won’t relieve Kyiv of its mounting problems.

And problems – there are. I’ll give an example. For several years now, the second stage construction of Kviten mall is underway near the beltway. The project was allowed to absorb a high-speed tram stop, with the investor pledging to erect a new one in its place. It’s April 2022, and the construction has stopped. The mall’s owner, an associate of the former mayor Leonid Chernovetskiy, simply can’t afford to finish the project.

Naturally, the war could only have reduced the chances of the mall ever getting built. The investor is probably in even more dire financial straits, meaning that locals can forget about getting their tram stop back. My requests of the details of deal that surrendered this piece of public property for “renovation” were left unanswered by the city government.

There are plenty of such dragged-out developments around Kyiv. Klitschko is yet to unveil his plan of dealing with those. It’s even less likely since the outbreak of the war – the mayor is busy with problems of different nature. On occasion, he even has to perform diplomatic tasks, meeting with foreign envoys.

Some would argue that war is the paramount issue the country’s facing, and it’s irrelevant when Kviten mall will be finished, or what happens to the tram stop.

I beg to differ. It’s vital for Ukraine to have the capital operating properly. The city’s economy has to be running smoothly, with new jobs popping up in both public and private sectors, with businesses operating at some sustainable levels.

I’ll give an example to illustrate my point. Recently, I had a chat with a man in his 40s, who used to work for the 1+1 media conglomerate. He’s out of a job now, and is desperately looking for means to sustain himself financially. As it stands, the only option for him is to become an Uber driver, but even that job market is quickly getting saturated.

War means that even if you had job before, it doesn’t mean you’ll keep it in wartime; it eliminates jobs, salaries, and business models. Ruined assets are wiped off balance sheets, banks have to make sure their collaterals are still intact.

Lest I keep repeating obvious banalities, let me suggest some measures that could improve Kyiv’s economic lifeblood.

First, the city government could use foreign donors to invest in a municipal employment drive, helping those who choose to remain in Kyiv, despite the security risk, to find appropriate jobs. It could include a retraining component, giving unemployed men and women an opportunity to remotely master a new profession and learn new skills, instead of drowning their sorrows in a bottle.

Second, better management practices in municipal companies could create hundreds, if not thousands of jobs. These numerous enterprises are well known – from the city’s TV station Kyiv, to the Kyiv Metro. Current residents of Kyiv could replace the employees that evacuated to safer parts of the country or abroad. They would revitalize the city’s economy, creating economic activity that is crucial for our collective comfortable survival.

Third, Klitschko could address local business leaders and urge them to resume operations, with updates schedules and proper measures to ensure their employees’ safety: air raid shelters, transportation, and stable employment. That’s exactly what the Zaporizhzhia City Council did a month ago.

Fourth, the city hall could use financial aid from Ukraine’s government and international organizations like the World Bank to extend credit lines for the city’s businesses. The scale of such an initiative could vary, but just its launch would be a significant accomplishment. Companies would be much more willing to conduct business during the war if they knew there is a lender of last resort in Kyiv they could turn to.

Fifth, city officials could do something about the many unfinished construction projects scattered across the city – from the high-rise on Kudryavski Descent, to the church near the Olimpiyskyi Stadium. Perhaps, it’s prudent to meet with the developers of those projects and help them find funds and contractors to finish construction.

For the projects that are economically viable, the city hall could guarantee some loans to cover some of the costs. We ought to plan for Kyiv’s eventual economic recovery, and should start stimulating job growth today, in order to speed it along.

Of course, these plans are somewhat optimistic. If the Russian army launches a new offensive on the capital, people will have to take up arms again and resume their volunteering efforts, instead of looking for jobs. Nevertheless, we need an economic recovery plan. Otherwise, Kyiv will be full of people queuing for humanitarian aid in the next quarter.

By the way, humanitarian relief is another important area for our mayor to focus on. Klitschko really should take a look the most vulnerable in the city and their urgent need in food assistance, communications, reliable media, and medicine. While the fighters in local Territorial Defense Force units were well-fed with catered meals, courtesy of Kyiv’s restaurants, retired seniors don’t have access to free meals, provided by these charity initiatives.

On top of basic material needs, many people need emotional support. The city could open psychological support lines to provide relief to those seriously distressed by current events. There are many lonely people living in Kyiv who have no one to talk to, exacerbating psychological problems. Perhaps, appropriate specialists with private practices would volunteer for a program like that.

The quaint practice of book sharing in the city also seems to have withered away. I recently noticed that one such micro library near the National Shevchenko University sits empty – not a good sign. People have stopped lending each other books, in another cultural distress indicator. Usually, these shelves in the city’s parks and bars were full of quality reads, even if not the trendiest ones.

Theaters and cinemas across Kyiv are shuttered. Militaries of almost every country in the world invariably have orchestras and choirs. During war, soldiers can find emotional relief in art. Our theaters could open their doors and wardrobes for amateur troupes to stage some plays for the benefit of city dwellers. Many had tickets for the much-anticipated Clockwork Orange play at the Podil Theater in February, but the war has put a halt to the performances.

To conclude, I’ll mention some things are only tangentially related to restoring regular life in Kyiv, but will play a role in more long-term dynamics in the city.

Before the war, Kyiv was a relatively developed educational and healthcare center. Dozens, hundreds of universities and medical establishments were generating high-skilled jobs and creating a sizeable chunk of the service economy.

According to Harvard professor of urban design Edward Glaeser, data from cities across the globe suggests that education could become the foundation of rapidly improving urban living standards.

In terms of healthcare, it’s important for Kyiv to hold on to its status of a major Eastern European center of technologically advanced surgical and reproductive medicine.

There’s a lot on the city hall’s plate in the capital. Klitschko has his work cut out for him, besides social media engagement and meetings with foreign ambassadors. After all, he works for the residents of Kyiv – they cast their votes for the mayor back in 2020. It’s time to show that their trust in the boxing champion was not misplaced. The mayor is ought to be with his constituents in sorrow, as in joy.

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