‘Ukraine’s most valuable assets are Ukrainians, and this resource has to be developed’ – interview

In their interview the representatives of EU Project “Support to Ukraine’s Regional Development Policy”, Mr. Colin Maddock and Ms. Olha Grygorashchenko are talking about the challenges and possibilities of regional development in Ukraine.

Mr. Colin Maddock, Team Leader of the EU Project “Support to Ukraine’s Regional Development Policy”
Mr. Colin Maddock, Team Leader of the EU Project “Support to Ukraine’s Regional Development Policy”

The issue of regional development has become especially topical over the last few months. It is regarded as an essential element of democratic changes. In their interview the representatives of EU Project “Support to Ukraine’s Regional Development Policy” Mr. Colin Maddock and Ms. Olha Grygorashchenko are talking about the challenges and possibilities of regional development in Ukraine.

–          What are your observations on the current state of affairs in the field of Ukraine’s regional development?

Colin Maddock: Ukraine is a country in transition and has been in transition for a long time. Ukrainians are sure that they do not want to live the way they are used to living, but they are still not quite sure in which direction they should move. But, irrespective of the direction that Ukraine takes, and we would of course recommend a European direction, what is clear that Ukraine deserves and is capable of a wonderful future. I need to say that in this world there are very few countries where you could take a handful of seeds, simply throw them on the ground, and they will grow. Ukraine is one of them. Ukraine is endowed with resources that it has not even discovered yet. I mean that both literally and metaphorically. In my opinion, Ukraine’s most valuable assets are Ukrainians themselves, and this resource has to be developed. Regional development should help Ukrainians to realise their potential and to direct it toward the common good. Regional development is just one instrument that exists in the wider context of national development.


– Is there common European experience in regional policy? Could it be useful for Ukraine?

C. M.: Since each of the 28 EU member states has its own peculiarities and internal diversity, it is difficult to define one effective regional strategy that will work properly in every case. Each state organises its regional development policy in a specific and unique way, and consequently responds to the same challenges differently than other states might. Regional development strategies and tools are a reflection of a state’s general orientation and goals. Thus, whether Ukraine can learn from the EU is dependent on the direction in which Ukraine wants to move. If Ukraine chooses a European future, it should be ready to align itself with European regional development policies. It might cost a lot, but it would be a great impetus for Ukraine’s development.

Ukraine is often compared with Poland, and these countries do really have a lot in common. Poland could offer lots of useful lessons to Ukraine – both positive and negative. I would recommend that Ukraine selectively choose and combine components from different models in order to create a uniquely Ukrainian regional development strategy. It has to decide on its strategic direction, and then the EU and its member states can help by sharing their experiences. Ukraine is big and diverse country with a unique set of promising assets, and it should not simply force itself into a model based on another country’s experiences.

– Taking into account the diversity of Ukraine’s regions, could there be one unified regional development policy?

C. M.: Internally, Ukraine has to deal with all 24 or 25 regions and potentially different perspectives on what the country’s future should look like. Our project tries to develop approaches that deal with this diversity, but there should be a system. It is impossible to have 24-25 different approaches, so together with the Ukrainian government we are trying to group similar regions and to create 5-6 models to cover the whole country. These ‘typologies’ of regions provide a more effective way for the government to deal with regions in a more effective and structures way.

– Is the reform of the taxation system a key to improved regional development in Ukraine? Should the oblasts collect and distribute money themselves on the basis of their own considerations?

C. M.: The closer you get to the problem, the better solution you are going to get. Sometimes the solution is very simple, but if you look for it from far away, you may have difficulty even defining the problem. From this perspective, it is definitely better to give the people the right to distribute money at a local level. However, taxation is a complicated system that does not work in isolation. The most important thing is to make the system work properly, which means getting people and industries working in the regions. Regions benefit first of all from the circulation of money and resources, not from taxes. This is what unlocks the potential of people; taxation is of secondary importance in this regard.

– Talking about regional development, what would be the first thing you would do? Which problems should be first in line to be solved?

C. M.:  I believe we have to try to create a strategic long-term direction for Ukraine’s regional development – both in terms of policy and implementation. Ukraine desperately needs a national development plan that will include an analysis of the current state of affairs, a definition of the necessary steps, and a prioritisation of these tasks. At the same time, we have to very quickly demonstrate to Ukrainians that this new strategic direction is going to be difficult, but it is worth the challenge.

I have already mentioned that the strength of Ukraine is its people. However, its people are its weakness as well. The battle for Ukraine is not on Maidan or in Crimea, but in the hearts and minds of Ukrainians. Ukrainians have to be able to firstly define what do they want and then be able to agree that it might be a bit painful to follow that new path. From regional development perspective, it all is not only about GDP growth but about people. It is about allowing citizens to live the life they want by creating necessary conditions. If these practical conditions of a better life which is tangibly felt by the people are not met, then we will have future problems, which will affect the stability of the nation, which Regional Development needs.  Ukraine, as a people, have to understand and to agree the direction they will move, and that this move will take a lot of effort and may have some short/medium term pain.

– The question of identity is a long-term issue that needs time to develop. But the problems that Ukrainians are facing today are urgent and very substantial. How could this division be managed?  

C. M.: We can all agree on a few things that should be done right now. First of all, economic development is critically important.  Job creation is a high priority as well. Investment attraction creates jobs; therefore, it is going to be crucial. Consequently, we have to stabilise the economic environment and lower the risks for investors in order to persuade them that Ukraine is reliable. We have to ensure that the judicial system is reformed and is free and fair. These issues are critical to everyone and they are irrespective of national or any other identity. That is how we will unlock the potential of Ukraine and Ukrainians.

–          How does your project contribute to regional development in Ukraine?

Olha Grygorashchenko: The project has both a top-down dimension (at a national level) and a bottom-up dimension (at the regional level). The current state strategy for regional development until 2015 (adopted in 2006) does not reflect the current state of affairs in the country. It does not always correspond with the strategies of the oblasts and is obviously out of date. So far the project has been assisting the Ministry of Economic Development and Trade with developing an effective strategy for the period until 2020.

At the same time, we are creating an unprecedented network for regional development: Regionet. It aims at collecting the knowledge, experience, and efforts of experts from all regions of Ukraine and combining them on one platform or network. Often experts are not acquainted with each other, and consumers of Regional Development expertise are unaware that specific experience exists. This significantly limits their ability to realise their potential. Regionet will allow experts and interested people to learn about their colleagues in other parts of the country and allow consumers of regional development expertise to access these resources.

Background information: The EU Project “Support to Ukraine’s Regional Development Policy” (SURDP) began its activities in January 2013 and will continue until July 2016. The overall objective of the project is to contribute to the social, economic and territorial cohesion of the country. Implementation of the project will strengthen the capacity of Ukrainian authorities and other stakeholders to develop and implement effective regional development policies. The main beneficiary of the project is the Ukrainian Ministry of Economic Development and Trade.The overall budget of the project is € 31 mln.