This week, the International Monetary Fund (IMF) issued an improved economic outlook for Ukraine projecting 4% growth for the year.
It sounds great until you consider that the same organization expects the global economy to grow by 6%. This is not the good news story for Ukraine that the media is saying it is. Instead, we should be talking about how we are falling behind the rest of the world by an additional 2%
Here is a startling comparison: the US. will grow its $22 trillion GDP by 6% this year, or $1.32 trillion. Ukraine’s 4% growth on its GDP of $ 150 billion will grow the economy by only $6 billion. Enough said!
So where can Ukraine look for more growth?
Regional cities and the communities around them is where I see the potential for national economic growth. Ukraine’s large cities are in political and business friction, which is not welcoming for any strategic partner or investor. Yes, cities like Berdyansk, Cherkassu, Ivano-Frankivsk, Poltava, and several dozen more are eager to try new things to revive their local economies.
Anyone who has traveled widely in Ukraine can attest that 95% of the country’s real estate needs to be demolished and rebuilt. In the regional capitals this process of urban renewal has not begun. It is a major opportunity. And local governments, desperate to attract capital, projects, human resources, companies and youth, are willing to entertain new ideas—because for 30 years all other efforts have failed.
This idea is actually not new—it’s simple, logical and proven. Any city looking to create a cycle of sustainable economic growth must take a bottom-up approach rather than the top-down approach that has been practiced in Ukraine for decades.
In other words, the key is to have a local campaign that unites government, business and community at the grassroots level.
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