Season 2 Episode 7
Speakers: Jakub Parusinski & Lili Bivings
[Music Playing]
Jakub: Hello and welcome back to Power Lines: From Ukraine to the World, a podcast from Message Heard and the Kyiv Independent. I'm Jakub Parusinski. Each week we're going to be analysing the undercurrents of the war in Ukraine, bringing you analysis from across the globe to explain its context and consequences as the war continues.
To kick off 2024, this week we're focusing on Ukrainian businesses and the economy to discover just how resilient it has actually been and the crucial role both will be playing as the country looks forward to reconstruction in the year ahead.
Ukraine's economy was actually one of the bright spots of 2023, after a devastating impact after the full-scale invasion, the economy dropped by an astounding 30% in 2022, but last year it actually rebounded by about 5%.
As you travel around Ukraine, you will of course notice the scars that Russia's incessant bombing campaigns have left. But you will also see a vibrant and entrepreneurial economy, and not just in Kyiv, but even in the cities closer to the front lines in the eastern parts of the country.
But two years of war have taken their toll. People are tired, exhausted. Many men are serving in the armed forces. Lots of people are suffering from psychological and physical trauma.
In 2023, we saw some reconstruction projects crop up, green shoots scattered across the country. In 2024, Ukraine will want to scale that. The question is, does it have the funds, resources, people, and organisational capacity to do so?
To find out more, I sat down with our business editor here at the Kyiv independent Lili Bivings. Lili is originally from Washington DC but after serving in the Peace Corps in Ukraine from 2017 to 2020, she pursued a career in journalism covering business with us at the Kyiv Independent.
She runs a weekly roundup column, which looks at the biggest business events of the week, which you should definitely check out, as well as providing overall coverage of the economic developments in Ukraine.
Today we spoke about the startling resilience of the Ukrainian economy and the crucial role that Ukrainian entrepreneurs are going to play during the period of reconstruction ahead.
Hello, Lili, welcome to Power Lines.
Lili: Hey Jakub, thanks for having me.
Jakub: 2023 was a difficult year for Ukraine, both in the military sense, but also for ordinary Ukrainians. It was a tough year, and I don't think the story was quite the same from the business perspective. I think it was more complicated, and maybe that's actually where we can find some bright spots and reasons for optimism.
So, a lot of people would assume that the war has completely decimated Ukraine's business landscape, but actually if you go to Kyiv and some of the bigger cities, that's not really the feeling that you get. Could you give us a little bit of an outline of just how resilient the economy has been?
Lili: Yeah. Well, obviously in 2022, the first year of the full-scale invasion was devastating for Ukraine's economy. I mean, it took a 29.1% hit in GDP that year. You obviously have millions of people leaving the country. You have entire cities and towns occupied, destroyed by the war, and things really come to a standstill a lot.
And then 2023, actually, things start looking up for the economy as a lot of different sectors and industries in Ukraine actually turn out to be quite resilient. And now, by the end of this year, the IMF, the Economy Ministry in Ukraine are revising numbers of GDP growth from 1% this summer to now in November, December to 4 or 5%.
And I think most of that has to do with the fact that, I mean you have a very resilient tech sector in Ukraine, which is a large part of the economy. The agricultural sector picking up, again, there's some demining going on, but there's also liberated territories that are in Southern Ukraine that are now able to go back to farming.
You had the Black Sea Grain Initiative, which got a lot of Ukraine's grain out but then was stopped this summer. And Ukraine actually sort of puts in place miraculously its own temporary corridor. It's getting grain out that way. It's exporting through its western borders.
And yeah, the towns and cities that are either far from the front lines or Kyiv where you have really good air defence, life has been able to go on in some ways despite the fact that the war is still very much a hot war.
And so, things are kind of looking up, I would say, from a business perspective and just businesses have adapted in different ways too. You have some businesses just picking up and moving from Eastern or Southern Ukraine, entire factories and their families and their children and everything just relocating.
So yeah, I mean, I think the story of this last year, while politically it's a bit scary because they're sort of slash of political tensions and you have the counteroffensive, which largely failed, and Ukraine aid is drying up all over the world and it looks bad for the business sector in Ukraine, it's a different story actually.
Jakub: It's interesting that you mention a lot of the businesses relocating. I was kind of struck throughout the summer having visited areas especially around Ivano-Frankivsk, which is sort of in the western mountainous kind of regions, that you would have a lot of people who clearly did not vibe.
They had come from somewhere quite different bringing their families, their businesses, their assets. And I was told that there's even a sort of a boom happening in terms of constructions, lots of people building relatively swanky cottages where they can sort of just live and continue working with all around the world.
And so, you've kind of got this boom happening in the West, but you mentioned the cities and what I've been struck by is every time I come to Kyiv, the amount of sort of, I'd say just kind of raw entrepreneurship that you go into a bar or a restaurant or whatever and they've created their own sort of mini bunker in the basement so that patrons don't have to go off and exit.
You can just sort of come down if there's an air alarm, they're really building and they're adapting around the war and sort of how it's disrupting them.
I'm curious, is it a similar vibe if you go to some of the other big cities that are more in the centre and east of the country? I'm thinking about Dnipro, Odesa, Kharkiv. To what extent is that similar mechanism sort of playing out?
Lili: I think it's very much playing out in those places as well. I mean, you have different dynamics going on everywhere. I mean, Kharkiv has obviously been extremely affected and it still continues to be extremely affected by Russian bombardment.
And I know a lot of companies have moved out of Kharkiv and into Kyiv, especially tech companies, you have a lot of tech companies who are relocated from Kharkiv to Kyiv.
But I've heard the same things, in Kharkiv you have this vibe anyway, this kind of, okay, we can't go on like we usually would, but let's put the cafe or the event or the bar in a basement, in a bunker and let's just keep doing what we've been doing.
I mean, that's what Ukrainians always kind of do though. They always just trying to figure it out. They're very scrappy in that way.
But yeah, I mean, and then it depends, something that has also been really remarkable about Ukraine over the last year is that more people have opened up what are called FOPs in Ukraine, which are kind of these individual entrepreneur registrations to open up small and medium sized businesses and you have record numbers of people opening up these new registrations.
What it means is that people are starting their own businesses. And this is happening not just in Kyiv, not just in Western Ukraine, this is happening in places like Kremenchuk, Poltava Oblast where I used to live, in Mykolaiv, in Kharkiv Oblast.
And this is largely because, well, people have lost their jobs, so they figure, alright, I'll just do something on my own. I'll start my own business. It's very easy to open one up in Ukraine and start selling things online.
So, that's another really interesting dynamic in some of these cities that have been more affected, where jobs are lost, people have left, factories are either destroyed or closed. Ukrainians have found this other way.
Jakub: Yeah. That's really interesting. And this actually reminds me of a piece in The Economist a couple of years back where they were comparing American versus European business cultures. And the whole cliche, I mean, it's there for reasons.
Americans are go-getters, risk takers. They're ready to sort of try new things. And then Europeans are super cautious and they're waiting until the whole space is sort of regulated.
And then kind of the article pulls in sort of the post-Soviet space. And I think, Ukraine is as good as an example of that, as you can imagine. And they kind of say like, if you thought that this was on some kind of continuum, you couldn't be more wrong.
It's like, take the difference between the Europeans and the Americans and go another sort of similar distance into sort of like risk-taking and being able to … for post-Soviet entrepreneurs, America is a peaceful, well-regulated gentle society.
They are used to much more tough environments, much more chaotic environments. And that's an energy that you can just really feel. And I mean, it would be really fantastic if Europe could benefit from it because that could be a real driver.
Lili: Yeah. I mean I think you see it playing out even in the support for Ukraine. Americans are just super supportive of Ukraine. And it's partly because maybe there's some historical stuff with Russia always being our eternal adversary. I say our, because I'm American, our eternal adversary.
But I think it's also that there's these ideas of individualism and freedom that are playing out here that really speak to Americans. I mean, you have entire towns in the state of Maine in the U.S. with Ukrainian flags all over them. There's not a Ukrainian person in the town or within miles of this town, and it's just, there's a vibe and there's a spirit.
And Europe is much more cautious towards Ukraine. They're a little more suspicious of Ukraine. They're not so sure. And you see it even playing out in investments too, like where do investors venture capital funds go to get money for Ukrainian startups? They go to the U.S., they go to California.
When they go and talk to Europeans, the Europeans are like, I don't know, there's a war there. And those Ukrainians, they've got issues with corruption, and I don't know. So, these dynamics and stereotypes I guess are real.
Jakub: No, they're definitely based on something. Before we sort of go into some of the challenges that Ukrainian businesses are running up against, what is your sense of sort of what's happening in the defence tech, MilTech space?
Of course, this has been very loud in terms of headlines. There's been a lot of news about, first of all, how the war itself has been a shift technologically in the role of drones and so forth.
But also, the industry that sort of follows that, all of these robotics, aeronautics, automated guidance systems for drones. There's a lot happening there. At least when we look at the headlines. How's it feel, let's say on the ground?
Lili: Yeah. So, I mean, I think, weapons production and military tech in Ukraine, I mean, it's game changing for sure. And I think actually this excites the Americans too, because of course you realise that this is perfect, experimental stuff going on, on the ground in real time.
The European defence industry is also interested, but this interesting dynamic is also playing out where they're like, okay, we want to invest in Ukraine's defence industry because it's beneficial for us. We can make money.
But not too much that then they become too competitive. And then they knock us out, right?
Jakub: Yeah.
Lili: And so, you have, it's like this caution, same with the military aid to Ukraine. And it's because they understand that what's going on in Ukraine right now in terms of military tech is probably revolutionary.
I mean, at the beginning of the full-scale invasion, you had like nine different types of drones being produced in Ukraine, something like that. And now you have 200 reconnaissance and combat drones that are being made by Ukrainian tech companies, military tech companies. And that's just drones.
There's tons of other types of military equipment. There's also cybersecurity. But all of this stuff right now is just exploding in Ukraine. And lots of people want a piece of the pie.
Obviously, the big companies also want to use it to get information and experience. But definitely there's an anxiety that what happens if Ukraine becomes the powerhouse of the defence industry in Europe?
But it's also like politically, okay, Ukraine is our friend now, what if in 30, 50 years it's not, and now they are the second army in the world with incredible military technology.
So, I imagine too, there's some people who think, okay, what if this stuff ends up in the wrong hands, not just in Ukraine. But in general.
Jakub: No, you're right that there's a lot of energy and there's a lot of people who see this as the next generation, the frontier in terms of what's coming. I mean, personally, I've to my surprise, run into people like the former CEO of Google, Eric Schmidt in Kyiv cafes just having meetings with all of the different executives that he's brought on board. And you can feel this sort of buzz and excitement.
The other thing which is a little bit worrying here, I guess from a Ukrainian perspective, is people specifically because Europe needs people and Ukraine has in a way been a boon especially for Poland and Germany, let's be honest, in terms of moving a lot of working age people out of there, mostly women with children, which does represent the cost, but the benefit is very quick and very direct.
And so, one thing that I've heard a bit from Polish entrepreneurs is well, I mean investing in Ukraine, maybe, maybe not, but we certainly would be happy to get Ukrainians over here to work in our companies.
And I think that kind of brings up two challenges, which is one, how does Ukraine deal with that? And two is how do you maintain — a lot of Ukraine's advantages come from an abundance of skilled labour. How do you manage an economy when that labour is no longer as skilled or as abundant?
Lili: Yeah. I mean, I think it's not openly talked about, but Ukrainian refugees are an extremely highly skilled workforce. And the Germans and the Poles are probably not going to want to just give that up so easily in terms of creating incentives for Ukrainians to return. They're just not.
And so, it's really a challenge to imagine how do you actually then help Ukraine's economy when all of these people have left and these countries want to incentivize them to actually stay.
I know that some investors, they do this thing where they invest in Ukrainian startups or tech companies. They don't necessarily have to be based in Ukraine anymore.
So, they have a Ukrainian founder, or they have Ukrainian staff and they're considered a Ukrainian company because they're a Ukrainian born, as a way of kind of still investing in Ukraine, even though you're not doing it inside of the country, or the company isn't based here.
So, I think there's also ways of kind of still trying to invest in Ukraine and in Ukraine's future with people who have left with the hope that maybe they'll employ people here or that there is a chance they would come back in the future.
But yeah, it's really frightening that these people won't come back. And I think the European countries, the line is kind of like, oh, well these families have now put roots down in these countries. Their children are starting to grow up there. It's not going to be so easy to leave. But no one wants to say that actually these countries don't want them to leave.
Jakub: Yeah. So, one thing that has come up is so many millions of people have left Ukraine, whether the number is, I think 7, 8, 9 million tends to be the sort of range that people mention.
And a lot of them want to come back. A lot of them have already put down roots, as you say. And it seems increasingly clear that Ukraine as a nation will have to think about itself a little bit differently than the classical nation.
And in some ways, maybe more similar to Israel where you have a very large diaspora, you have a process of return and keeping roots with the country. Something like the Aliyah, that you come back, and you somehow get refreshed.
And that is, I think, an interesting and probably an inevitable part of the solution of how does Ukraine think about itself going forward with this large diaspora abroad.
The thing that has me a little worried is you look at a lot of the places where Ukrainians have relocated, whether it's the Nordics, Western Europe, Canada, the U.S., these are countries that have high labour costs, but they also have very high levels of knowledge and productivity.
And with all the respect that I know this is not a popular thing to say, a lot of the Ukrainians, they coming from a market that just didn't have those demands, was a different environment, different things were demanded of them. It's hard to see how they can compete in a lot of these places.
So, I'm kind of looking at how is Ukrainian productivity looking in terms of the labour? Is it going to be competitive?
Lili: So, on productivity, there's sort of two things going on. I think there's the first, which is that just the war has really made people's ability to focus and get a good night's sleep more difficult.
So, you already have, right now, you have this difficulty with productivity because people either are kept up all night because of air raid sirens, or they're stressed, or they have lost family members, or they have family members fighting on the front lines.
And so, it's just impossible to be as productive as you normally would. And the Economy Ministry has even tried to implement this program of like helping with an app to help people be more productive at work because they realise that, I mean, if the Economy Ministry is collaborating with a tech company to put on an app to improve productivity at work, it understands that there's a problem with productivity in society.
And that in order for the country to really move forward, people are going to have to be more productive. What that means is people are going to have to work harder, be more focused.
Jakub: Yeah. And just for our listeners, you're referring here to the BetterMe app. They are not sponsoring this episode, although we're happy to take a call and talk about it, but that's really something. They have clearly recognized that this is an issue.
Lili: And so, I think it's some sectors, the other thing that's happening is that there's just a lack of proper training on how to be really productive and produce well in your sector.
So, let's just take the tech sector. One thing that startups struggle with in Ukraine is just knowing how to be an attractive startup to potential investors from the most simple things of storytelling, just telling your story and having a nice elevator pitch.
And that's something that requires training, to the entire kind of professional appearance of that tech startup, which is really important for investors as well. There's some sort of lack of gaps in knowledge there in Ukraine.
And of course, there are accelerators and things that try to educate tech startups on this, but I think this is happening in every sector. You just have a lack of like experience. I mean, Ukraine is a young country.
Jakub: Yeah, definitely.
Lili: And you have people who have left, sort of some of them maybe the more experienced or better people or more successful people live elsewhere. And so, they're not here to pass down or share that knowledge.
I mean, really Ukraine is going to have to channel, I think actually it's diaspora to contribute that way. To sort of show the way forward for businesses, for tech companies, for how to even kind of structure a workplace, things like this that we're already something really in process, in progress in Ukraine because it's a young country and it's coming from a Soviet, or in some people's minds a kind of post-colonial place where they're already behind.
And now you have this war, which has just made everything way worse. But yeah, I think what it really is it's going to be people showing and teaching and training other people on what productivity in different sectors looks like.
Jakub: Yeah. So, I think that's a really interesting observation. And it really does align with what I've seen that a lot of the time you might find people who know how to code, but not necessarily how to pitch.
And there is this kind of gap when it comes to the type of skills that are very prevalent, especially in the anglosphere about debate and communications and sales and all of, that is probably one of the areas where Ukraine tends to do not so well.
But yes, it does have a huge diaspora. I'm almost wondering if there isn't a space where … it's a big country, there's a lot of damaged infrastructure, but there's a lot of people who really want to do well.
And a lot of the conversations that I've had with Ukrainians who work in various sort of, I'd say quite successful corporates and things like that globally, they really want to get involved. And they're talking about how can you scale that through educational technology, how can you do mentoring?
And I don't think anyone's quite cracked this, but if there is a place where really that kind of upskilling can happen at scale, I mean Ukraine is well poised to do that.
Lili: Yeah. I just wanted to add, it's a really good point, what you made about Ukrainians being really good at coding for example but having less experience or knowledge about how to then sell that thing that they're really good at.
And that's the thing, Ukrainians are super talented. They have so much to offer and it's just about the packaging almost and the communication.
Jakub: The project management as well.
Lili: Right, right. Exactly. And I know that project management is a big one for reconstruction because I know there's a lot of foreigners who are interested in through grants and other sources of funding, just organising training programs. Especially for urban planners and architects and on the project management part specifically, how do you go from point A to point B?
You might be an incredible architect, have amazing plans, you're well known in the community, you have the resources to do the project, but not necessarily carry it out.
And so, I think yeah, there's a big need for that in Ukraine, which it's always been something really curious to me because like we’re talking about, Ukrainians have so many talents and they're so skilled at so many things and this gap, which you think shouldn't matter that much somehow actually really hurts them when they're trying to compete with other countries or other companies.
Jakub: Being Polish, I mean, I feel safe enough to say that Poles and Ukrainians are kind of the antithesis of each other in many ways. Ukrainians are incredibly skilled at communications, I think, and at presentation, at design and things like that, which is an area where I think as Poles, we probably might be amongst the worst performers in Europe.
And when you look at a lot of the businesses that have been set up, they tend to be very process heavy, onerous kind of, integrating themselves into the German economy and Ukraine is not at all that.
Ukraine has been a very sort of different kind of business environment. And so, yeah, coming from sort of Poland or from a western European perspective, it's a little bit shocking to see just so much talent, so much raw potential resources and so forth. And then there is trouble with implementation and that's pretty consistent.
Lili: I think it's getting it started in Ukraine, people are really good at starting businesses and I think they have a hard time competing with the well-structured, well-organised Western businesses.
And I think this probably comes from a place of Ukrainians in general, like I said at the beginning of our conversation, are very scrappy. So, and they've been living in this kind of survival mode for a long time. I mean since-
Jakub: For 30 years now, if not longer.
Lili: Right. And so, when they start a business, it's kind of just, they just go for it. They just do it and it's all a little bit on the fly, which is a great thing, because that's definitely a cultural thing, which means that people are ready to just throw themselves into something. And just do it. Which is on the one hand an amazing part of their culture.
But on the other, if then, in the sort of implementation of a structure that's highly organised, things are a little bit different. There's less experience doing that. There's a lot of experience doing things on the fly in survival mode, less experience with the long-term planning because Ukrainians haven't had long-term thinking in their business and even in their personal lives.
Jakub: Turning to the reconstruction, which is sort of I think something that at this point has become quite loaded and it's almost the expectation can't live up to the hype that's been built up over two years.
But also at the same time, it is a huge opportunity for Ukraine, not just in terms of rebuilding its infrastructure. Obviously, there's that in terms of anchoring the country in the West, obviously that's it as well.
But it's also a chance for European and American and international, from all over the world companies to work in Ukraine with Ukrainians and to share a lot of skills and knowhow. There's a huge opportunity to also sort of build skills. How is that going?
Lili: Well, I think, like you said, there's a lot of hype about reconstruction. It feels a little bit like the hype around the counteroffensive. And there was this big thing just right around the corner where all of the foreign businesses and countries, embassies were going to come in and just radically reshape the country's infrastructure and both critical infrastructure and road infrastructure and social infrastructure.
Jakub: And you can't live up to that hype.
Lili: First of all, you can't live up to that. Second, the war is still a hot war. And foreigners and Ukrainians, people who might invest in these things understand perfectly well that tomorrow the thing they build could get hit by a missile.
And yes, they're implementing things like war insurance right now, they're trying to bring more money in for this. But at the end of the day, if a missile hits your factory and kills also the people that you employ, if you're a serious investor, you obviously are taking these things very close to heart. You're not just dismissing them.
So, there's that. And then like we've been talking about, I mean, you have people who have left. So, you just have a less populated country to rebuild. You have a lot of people fighting on front lines, then you don't have as much necessarily expertise in project management of implementing different reconstruction projects.
Then you also have people who are not interested in things changing. What I mean to say is that they're corrupt and they don't want this sort of modern Western European style construction projects that are done using sustainable materials and things like that, because that's not the quick and easy and cheap way to do things.
So, there's a lot in the way, but there are things happening. And things are being rebuilt. It's just slower than one would hope.
Jakub: I mean, one thing that I think is really important to underscore and I think you made that point quite clearly is that, well first of all, this isn't Groundhog Day. This isn't sort of one day we see an investor that's not scared of his or her shadow and all of a sudden, we proclaim that reconstruction is open.
I'm not quite sure if I'm using Groundhog Day correctly. This is my sort of having watched a couple of Bill Murray movies.
Lili: Yeah. I think Groundhog is when the same thing happens over and over again.
Jakub: Okay, alright. Fair enough. Well, it's the day when that rodent sort of comes out and basically doesn't get scared of its shadow and you say, okay, this is the end of winter.
Well, that's not how reconstruction works. It's a slow process. There's companies that are coming in and they're sort of gradually kind of building each other up. There's a dynamic that needs to be built.
I think one thing that's interesting to see is who are the actors at the moment? Because one of the beliefs is that obviously the private sector in the end will be the one that is sort of driving the process, but I don't think we're quite there yet, right?
Lili: No, I think it's mostly still institutional money. So, international financial institutions EBRD, IFC obviously as well, the embassies countries themselves. Providing loans and grants to both Ukraine and to Ukrainian companies, but also to their own companies.
Because private companies are still waiting a bit. Because we've heard you and I, there's no premium for being early. There's no premium for a private company to get here now as opposed to five years from now when things are maybe peaceful and there's no war.
And I think some businesses feel differently. They think, no, you should come now. You should start rebuilding now. You should help Ukraine but also be the first ones in.
Jakub: Can we just unpick that, because I think that's a really important point is there's no premium for being early. One thing that, in discussions with various investors and business people, and please tell me if I'm wrong, but basically there isn't really a discount for buying Ukrainian assets at the moment.
There isn't really a discount that you can get things cheaper, if anything, because of the war. Some things have become more expensive. That's kind of shocking because you'd expect it to be the other way around.
Lili: Right. I think people assume it's cheaper because it's Ukraine and Ukraine is cheaper because It's a poorer country. So, investing in here would be less, but actually no, I mean insurance, you have to have some sort of war insurance, which is only provided right now through kind of institutional financing. So, not everyone can get it.
And then you usually have to bring people here from wherever, you need to make sure they're protected. There's a lot of security risks and security measures that if you're like an embassy or a private company from that country that you need to now take care of for these employees.
And then of course there's just like this risk over your head the whole time that something terrible might happen. And I think too, there's anxiety not only because of the war, and people don't love talking about this, but because of the Ukrainian government, because right now under martial law, the Ukrainian government can nationalise anything it wants essentially.
Jakub: Of course. I mean that makes sense in a way, but it doesn't make you nervous.
Lili: I mean, it makes you Ukrainian business people nervous too. Even Russian assets are just being taken over by the state, which makes sense, right?
Jakub: Of course. Yeah.
Lili: And I've even actually heard Ukrainian businessmen though, great Ukrainian businessmen who are totally above board saying like, “What are they going to do with those assets?” They're worried about kind of the transparency over how these assets are going to be resold or privatised rather.
And so, I think just overall, I think yes, most westerners who are interested in investing in Ukraine, support Ukraine recognize that the issues that exist in Ukraine do not define all Ukrainians or all business transactions in Ukraine.
But they're not totally unaware that the risks come from both the war and also the internal situation and the judiciary in Ukraine, whether or not it's a hundred percent true what everyone says about it being totally corrupt, there are arguments on both sides.
The fact of the matter is that there's this reputation that Ukraine has an unreliable judiciary system. So, if you're a foreign business, you won't necessarily be protected if there's any issues. That's the fear. It's not necessarily that it's true.
So yeah, I mean there's just a lot of things right now that are standing in Ukraine's way, unfortunately, of reconstruction really starting in earnest. And again, the hype around it is only going to create disappointment when it's not like this sort of paradise on the other side that we arrive at, which we're never going to because that's also just not how development works. You don't just flip a switch.
Jakub: No, it's a process and it's gradual. One additional question about the reconstruction, which I think is worth mentioning is just do we have a vision of what kind of country we're rebuilding? And what I mean by that is there is a lot of discussion about build back better. Of course, that sounds fantastic.
But what does better mean? Ukraine in the past has been actually a very socialised country. You'd be surprised even by European standards, the quality of the various social goods may not have been great, but they were widely available, whether we're talking about hospitals, pensions, protection of workers' rights, if you were officially employed, the amount of holidays.
And that's probably not the vision that a lot of the international funds, especially the American ones are having that when they're coming in to rebuild a country after the war. And so, is there a sense of sense how people are thinking about the economic model of Ukraine going forward?
Lili: It's such a good question because it's actually not part of the wider public debate. And it definitely should be. You don't hear this conversation of wait, wait, wait, hold on. Are we like rebuilding a neoliberal paradise in the western model? Or are we rebuilding the country we want to rebuild? Are we not?
But I don't think people have the bandwidth to pay attention to what economic model. Even though it actually makes perfect sense, because if you aren't careful how your country gets rebuilt and by whom and with what money and by whose standards, your country can end up looking a lot like you don't want it to.
And I think yes, that is something we should start talking about more in Ukraine. But I think people are more worried about just bringing the money in and getting it done and getting things rebuilt and giving people homes and new schools and new hospitals.
The other thing too, I mean, think about all the towns and villages that have been completely destroyed. And a choice is going to have to be made over which of those to rebuild. And a lot of these villages, officials in Ukraine have said, well, why would we rebuild that village, for what?
And you realise that okay, not only is that devastating to hear said because that's where people's lives were, and homes were. But also, if you want this to be a successful agricultural powerhouse, you will need to actually promote and help develop small and medium sized farmers.
To do that you need to create lives for these people in rural areas where they actually have … there's a civic life there, there's modern homes, there's good schools.
We're talking a lot about Green New Deal in smart cities and tech hubs and things like this. And it's like, but wait, wait, wait, wait, most of the country is agricultural and we shouldn't just sort of write that off as something that's part of the past or something where like grandma lives.
Jakub: Well, I was going to say, especially if you want to keep the younger generation in some of these places, you need to make sure that they're connected to the world, sort of people can see themselves building their lives there. So, I think that's a really important perspective.
Speaking of perspective, we've got 2024 coming up now. In terms of the year to come. What is it that you expect to see and what is it that you would like to see for Ukraine?
Lili: What I hope to see in 2024 are a lot more small-scale local reconstruction projects that are happening both between Ukrainians and foreign partners, small foreign companies that do local reconstruction projects.
So, you have that sharing of expertise happening and experience, but also local communities are getting rebuilt in sustainable ways, but also ways that give people a reason to stay or return or be excited about where they live.
I mean, you're not going to get everyone to come back, but you can at least make the people who still live in these places that have been heavily damaged feel like there's a reason for them to stay.
We talk a lot about attracting people back, but there are still millions of people here. And if you can convince them that there's actually a really bright future here, even in a local small community or a city far from Kyiv, I think that has a huge impact as well.
So yeah, I just hope that there's more of this kind of collaboration between Ukrainians, Europeans, Americans, Japanese, South Koreans on how do we build a country and what that could look like and making steps to actually do that.
I think there's a lot of potential, and it's starting, there's some cool things happening, but there's the space for a lot more.
And I think with next year too, if more air defence comes to more cities and things calm down parts of the country, like they have, continue to calm down in parts of the country, like they have more foreigners will come.
Even now in Kyiv last weekend I was walking around, I heard more English and foreign languages than I have in a very long time. So, foreigners are starting to come back, which means that there's interest in Ukraine. And I hope more of that happens.
Jakub: A lot of small and mid-sized successes. I think that's a great wish for Ukraine. Not just the bright headlines, but really something that meaningfully changes the country. And then of course, one huge, gigantic military success on the front lines.
But yeah, I think that's a really great wish for the country. Lili, thank you so much for joining us on Power Lines in what has been one of the more optimistic, I would say, despite its challenges episodes of the series. Thank you.
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Lili: Thanks for having me.
Jakub: Thanks so much for listening to Power Lines: From Ukraine to the World. And thanks to Lili for all of her insights. Be sure to check out her brilliant reporting on our website.
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