How the post-war reconstruction will determine the development of regions

How the post-war reconstruction will determine the development of regions

Photo: ua.depositphotos.com / photovs
1 August 2023
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In July last year, everybody was talking about Lugano. An international conference on the recovery of Ukraine took place there, with all the high-level politicians, international organizations and financial institutions that one can imagine. The Ukrainian government presented draft materials of the Ukrainian Recovery Plan, and soon afterwards the President’s Office came up with a proposal to establish a national Ukrainian Recovery Fund under international governance. On the partners’ side, the European Commission was promoting its initiative to set up an international financial facility, with the ambition to bring all the donors under the same roof.

A year later, there isn’t so much talk about London where the conference was held again in June. The materials on the Ukrainian Recovery Plan were not updated. The European Commission’s ambition dwindled down to a mere donor coordination platform and an EU-only recovery fund, linking investment support to progress with reforms. The idea of the Ukrainian Recovery Fund was developed into slides prepared with help from the BlackRock, recently described as the largest money-management firm in the world. It may well be that the international financial and political community will welcome the initiative better now that it is stamped with their logo and backed by their expertise.

The slow progress with international talks on supporting the post-war reconstruction is at least partly understandable. As the BlackRock put it, the investments can only start after “a reasonable ceasing of hostilities”. But meanwhile, the reconstruction is already going on. 

Emergency reconstruction

Not having the luxury of time to wait for international conferences, the Ukrainian government established the State Agency for Restoration and Development. The Agency director, Mustafa Nayyem, reported in London on the activities they’ve taken within only a few months. Naturally they focused on repairing the electricity distribution and logistics infrastructure. They started working towards providing drinking water supply to the territories affected by the Kakhovka dam destruction. They also opened the first tenders for selected housing reconstruction projects.

At the London conference, agreement was reached with the UN to establish a Community Restoration Fund. Six settlements were selected to pilot a comprehensive community-driven approach to restoration. Together with the local residents, they’ll make a plan of all that needs to be done – housing first, then the most necessary public buildings and infrastructure, such as schools, streets and internet networks, and then all the other things that make up for a living community, from sports facilities to cultural centres.

Such projects will build on what had already been repaired since the “reasonable ceasing of hostilities” by residents themselves, helped by volunteers from all over Ukraine and even abroad, and supported by whatever financial and material contributions they were able to obtain from donors, humanitarian organizations, government ministries and regional administrations.

For good reasons, locally-driven reconstruction is the way to go. The local population and stakeholders, together with their self-governing bodies, have the best knowledge of the damages and of what they need most urgently to return to some kind of a normal life. But will the local projects add up to a more balanced development of regions? Will they assure that the weakest communities and territories move faster and start closing the gap to the more developed parts of the country? Not necessarily.

Reconstruction and development of regions

Not everything and not everywhere can be restored at the same time. The selection of local projects that will receive funding from government and donors, together with priorities for rebuilding the national and regional level infrastructure, will have a profound impact on how quickly different communities and territories will recover and start developing. 

The ministry responsible for regional development has been recently merged into the ministry of infrastructure. There has been a lot of apprehension that, as a result, the regional development policy will become focused on infrastructural investments while paying less attention to soft measures such as support for local economies, innovation, education, skills and the quality of local public services. 

On the other hand, the merger of the ministries created an opportunity for the regional and local development perspective to be taken into account when planning big infrastructure projects. The projects’ impact on the opportunities of least developed regions and territories should become one of the key criteria for their prioritization. Being part of a financially and politically stronger ministry opens up a possibility for the department in charge of regional policy to have a stronger influence on sectoral policies that impact the development of regions and territories. 

To make this happen, first of all a common understanding needs to be reached that regional policy is not only about having a dedicated department and providing support to small local projects through the State Fund for Regional Development. All sectoral policies, from infrastructure to education and economic competitiveness need to consider how their measures and projects affect the development balance between regions. Once this understanding is reached and backed by strong support from the ministry leadership, the existing government procedures and bodies can be used to take the regional perspective into account when planning all government policies and the budgets supporting them. 

Supporting locally-driven initiatives

Successful reconstruction will need to combine big projects of national and regional importance with small local projects. Naturally the big projects should be planned by the state and regional level authorities, while keeping in mind that they must also contribute to reducing the territorial disparities. Local projects should be initiated, driven and managed by territorial communities. 

As logical as this sounds, for the weakest communities – in terms of their economies, human and financial resources, administrative capacities and the level of the war-inflicted destruction and depopulation – it may be very difficult to prepare and manage well-designed projects. As a result, they may start lagging behind the stronger communities in attracting donor and budgetary funds and hence the speed of reconstruction. This may further widen the territorial disparities. 

The recently established DREAM portal provides a facility for matching the locally-initiated projects with potential donors. This is helpful, but not sufficient. The weakest communities will need strong support already in the initial phase of developing their ideas into well-structured project proposals that can then be advertised on the portal. They will also need support for managing the projects’ implementation. 

Supporting communities in developing and implementing local projects should be an integral part of the government’s reconstruction efforts. The available international technical assistance could be directed into providing such support. Local or regional technical offices should be established for helping the weakest communities, combining the expertise of senior civil servants with local consulting organizations specialized in project management. Direct cooperation between more experienced and weaker communities should be promoted and supported. Here, the experience of “U-LEAD with Europe” Programme with its 24 regional offices present in each oblast could be interesting to study. Regional offices support municipalities in their day-to-day work by providing capacity development to local officials across all the spheres of municipal mandate. 

Planning for reconstruction

There is no lack of planning requirements related to reconstruction. Recent legislation has introduced two new documents that should be prepared locally, the local and regional recovery and development plans, linked to the regional policy, and the non-obligatory comprehensive recovery programmes linked to spatial planning. The process of updating the state regional development strategy, to be followed by regional strategies, has been initiated. There is also still the ambitious comprehensive Ukraine Recovery Plan which was drafted but never completed or formally adopted.

The planning is thus going slower than the reconstruction activities. This may well be good. What is most needed is not another pile of supposedly comprehensive but at the same time general papers. The most needed are concrete projects, not only construction ones, but also those that will help recover the local economies and the community’s social fabric. And again, not a long list of projects, but those that are most urgent, will help most, can be implemented in reasonable time and, taken together, will provide solid grounds for future development.

The current proliferation of planning requirements should be streamlined and simplified. Some proposals related to the current normative framework were provided in the policy paper on which this article is based.

Forward looking reconstruction

Finally, the reconstruction is not about building back all you had in the past and was damaged or destroyed. It is about building and providing what you most urgently need for the future. 

Knowing what you’ll need for the future requires answering some difficult questions. For example, how many people who left the community during the war will return back – as soon as possible, or in  a few years? And therefore, do we need to rebuild all the housing, schools, health centres and other facilities that we once had, or will less suffice for the foreseeable time? And, when rebuilding or repairing the buildings and infrastructure, should we also take care that it is more energy efficient, smarter, sustainable than it used to be? Do we have the time, the resources and the skills to modernize at the same time as we reconstruct?

Similar questions can be asked about the local economic recovery. Which businesses that relocated to safer places will return and resume their activity? To what extent? What do they need most urgently? Will the future economic backbone of the community be the same as before, or does it need adjusting to the new reality of available resources and opportunities?

Answering these questions requires information that goes way beyond registering the physical damages. Information on deterioration of the economic resources, human capacities and skills is equally important, although it does not need to be registered as diligently. At the local level, the information needed to focus on the most urgent reconstruction and recovery projects can probably be gathered through open and sincere discussion with people, experts, businesses and civil society organizations. Insights into intentions and needs of displaced people and relocated businesses could best be gained by a regularly repeated national-level opinion survey.

The challenges outlined in this article are not easy to deal with. But asking and answering such difficult questions and thinking of reconstruction in terms of future needs will prevent investing in facilities and structures that would not be needed for the foreseeable time or could soon become obsolete. Taking care that the reconstruction is geared towards reducing the regional and territorial disparities will ensure that everyone wins from these efforts.

This short article has been produced with the assistance of the European Union and its member states Germany, Poland, Sweden, Denmark, Estonia and Slovenia. It is part of a Policy Paper “Coordination of Reconstruction and Recovery with the Regional Development Policy in Ukraine”, prepared by Janez Sustersic, an international expert of U-LEAD with Europe, in May 2023. All terms in this article are meant to be used neutrally for men and women.

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