What does the future hold for the Ukrainian cities?

Urban Forms Center
Jul 30, 2015 · 7 min read

The recent years have been more than difficult for the Ukrainian towns and cities. Ukraine has been slowly adjusting to the European standards of governance and adopting new legislation in order to meet the requirements of the European Association Agreement. At the same time, very little effort was made to fight the corruption, which has colossal impact on all three branches of power on the national and local levels. In such conditions, it is logical that the whole state and its cities ended up in the economic crisis which may only be solved with the help of a large number of reforms and loans from the IMF, the USA, Canada, the EU, and other financial donors.

Nevertheless, there are a dozen towns and cities which have tried to plan their development until 2020 or 2025 using modern approaches and showed a real interest in the change for the better. Lviv, Vinnytsia, Dnepropetrovsk are the cities which may serve as the role models for the other Ukrainian cities.

These cities have understood that they have to compete for investment resources, new technologies and citizens in order to prosper. They have already designed comprehensible development strategies based on the modern approaches and thorough advice from the international partners. The analytical parts of the strategies realistically describe the current state of the cities. The strategies are targeted at overcoming the existing economic and social problems and provide clear information about how the cities will address the problems in the near future.

It shall be noted that all of the cities pursue the same goals: sustainability, higher quality of life, increased competitiveness through developing IT clusters and local industries. For example, Lviv has the following priorities: to develop a city which is comfortable for living, studying, working, and visiting; with developed and innovative economy, which is energy efficient and environment-friendly. Dnepropetrovsk and Vinnytsia have very similar priorities.

When analyzing the strategies of Ukrainian cities further, it becomes clear that they are often similar to the strategies of the cities in the European Union, such as Krakow, Berlin or Vienna.

Nevertheless, there are several fundamental differences. The Ukrainian cities do not count on the global markets. This can be explained by the fact, that the foreign policy has always been part of the national policy (in the USSR and in the independent Ukraine since 1991). What is more, the local authorities in Ukraine do not possess the necessary skills for active international relations. They do not have proper language skills, soft skills or capacity to participate effectively in the fairs and other international events, etc.

Only Lviv in the west of Ukraine has declared an ambition to become a cosmopolitan and “European” city. In the Lviv 2025 Development Strategy, it is said that the very special attention will be given to the creation of such a metropolis where the people will speak foreign languages fluently; the tourist- and work-flows from abroad will increase due to the modern transport infrastructure, high-quality hospitality industry and strong IT cluster.

Some achievements can be seen in Lviv already. The tourist flow has been fluctuating due to the unstable political situation in Ukraine, but the trend is certainly upward. Moreover, the Ministry of Transport and Infrastructure of Ukraine has begun an experiment called Open Sky in order to bring the foreign tourists to Lviv. The idea is to attract the low-cost airlines, as Lviv is not ready to compete for affluent tourists yet. According to the Center of Tourist Information of the City of Lviv, Lviv is visited mainly by the citizens of Ukraine, Poland, Turkey, the USA and Germany.

Another example of implementation of the strategy is improvement of the quality of education in Lviv. According to the Center of Education Quality Assessment of Ukraine, school leavers from Lviv have shown the best results in the final state examinations for several years in a row. Their main competitors are school leavers from Kyiv, the capital of Ukraine. In addition, according to the results of the English language state examination, youth of Lviv speaks English language the best in Ukraine.

On the contrary, the other cities have only declared their desire to promote the European values and be active on the international level. It is unclear how they plan to strive for the declared goals. For example, Dnepropetrovsk is one of the most developed industrial cities of Ukraine with the large state and private enterprises as a core. These enterprises have been working globally since the USSR times. But now they are part of so-called oligarch industry-investment groups benefiting from the national budget transfers and are subject to the profound changes in order to reach the global markets and become profitable. Of course the city of Dnepropetrovsk largely depends on such enterprises, but it will not be able to achieve its strategic goals if the economic environment does not change.

Well-functioning market economy, development of small and medium enterprises in innovative and scientific fields, transparent relations with the authorities — these are the key issues for the majority of cities in Ukraine.

One more interesting city which has chosen its own unique path towards successful strategic development is Vinnytsia with 372,000 inhabitants. The city surprisingly promotes the principles of good governance and e-governance. Several ideas are really unique as for a middle-size Ukrainian city: transparent administrative services by means of ICT, a multiservice network, “Safe City” system, E-ID-card, E-medical card, etc. These initiatives were introduced with the help of foreign partners. The experience of the Baltic states, Switzerland and Poland is of great importance for promoting good governance and further urban development in Vinnytsia.

What is needed for prospering?

Firstly, the principles of good governance shall be promoted more actively on the local level. Only the mentioned above cities have provided the opportunity for the local citizens to participate in the discussion of the strategies. There were many interviews, sociological studies, round tables, conferences, forums, advocacy campaigns — as the result the ideas expressed by the citizens were taken into account and cities are becoming truly livable.

So far such communication with the local citizens has been a rare thing in the other Ukrainian cities, despite the fact that according to the Ukrainian laws, there should be regular public hearings and gatherings, transparency in the activity of the local authorities, etc. Moreover, the local citizens should understand too that they have all the tools to influence the local policy. They can establish NGOs, associations or initiative groups for monitoring the work of local authorities and promoting their own ideas.

Secondly, Ukranian cities should become more open for the assistance from the foreign partners. A good example is Lviv which has found partners in Germany, the Netherlands, Poland, and Austria and cooperates also with the organizations such as UNESCO and GIZ. As the result, the visible results of change may already be seen. The historical city center was renovated and attracts thousands of tourists from Ukraine and abroad every year. The city is well-known in Central Europe and the foreign direct investment is expected to grow significantly in the upcoming years.

Thirdly, the cities should learn to earn the money. Approximately 80% of the resources are spent on the maintenance of the social infrastructure, as the result very little is left for the investment into the other projects. Due to the amendments in the Constitution of Ukraine and newly adopted Law about the local communities, the cities will receive more economic freedom. However, the new rules will not help to improve the situation in the cities unless the problem of corruption is addressed as required. According to the estimates of the Ministry of Finance of Ukraine, about 40% of the Ukraine’s economy functions in the shadow. Businesses do not pay their income taxes, as the result towns and cities have to cut their public expenditures. In fact, there is a never-ending circle — the enterprises do not trust the corrupt authorities, in turn the authorities require too much from the enterprises.

In conclusion, the reforms are being actively implemented on the national level. Decentralization, deregulation, less bureaucracy and more responsibility are the basis for change. At the same time, the cities should be active too. All in all, this is always the willpower which leads to the positive results.

Author: Oleh Nesterenko, Head of NGO Urban Forms Center

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