The news about Ukraine focus almost exclusively on the war situation. In the meantime, however, there are other important processes going on that get much less attention, at least in the mass media.
Background: the privatisation and decentralisation process
Since the collapse of communism, Ukraine has gone through a highly imperfect transition towards the free market. Privatisation of real estate reached 95%. New development in the large cities has been dominated by the oligarchs’ investments, and due to the profit maximizing strategy of developers, large highrises have been built as gated communities, exploiting the remaining infrastructures (as pointed out in the online presentation by Pavlo Fedoriv at the ENHR conference in Barcelona).
Following the 2014 Maidan events, important reforms were launched in the previously centralised, politically and financially top-down controlled country. One of these was the decentralisation of public administration and finance, and last, but not least, the reform of local governments (municipalities).
Before decentralisation the regions were ruled by regional administrations, subordinated to the ministries. There were huge conflicts between the regional administrations and the extremely fragmented system of local authorities. The jurisdiction of councils and mayors was not sufficiently specified by the law, local authorities were small and at the mercy of the oligarchs’ and large developers’ indulgence.
Top-down and bottom-up methods have been combined in the process of decentralisation, the latter giving room for negotiation about mergers. According to an evaluation from 2017,[1] “The process of voluntary consolidation has shifted the polemic in the broad public discussion. People got a real opportunity to influence the spatial organization of the residential territory, and to determine the strategic directions of its development. In public opinion, administrative-territorial reform ceased to be pure theory, needed only by officials and experts-theorists, but gradually becomes a matter of practice, the subject of conscious choice. The voluntary model proved to be quite useful in awakening civic initiatives and people’s direct interest in territorial development.”
At the end of 2022 OECD reported[2] about the success and problems of the decentralisation and regional development reforms implemented after the 2014 Maidan revolution. “The decentralisation reforms resulted in the merging of over 10 000 local councils into 1 469 municipalities that were granted new administrative powers and funding. This included creating several new inter-governmental grants and increasing the portion of municipal revenues derived from shared taxes. As a result, by October 2021, over 70% of the 741 municipalities surveyed by the OECD (51% of all Ukrainian municipalities) reported improvements in the quality of administrative and social services. The decentralisation reforms have, ultimately, empowered subnational authorities to adapt emergency responses to local needs to better protect civilians.”
Another report[3] emphasizes the political importance of the 2020 subnational elections, held in the new administrative setup: “The biggest winners were the growing number of incumbent mayors who have established their own political parties at the local level. It is now clear that Ukraine’s post-2014 decentralization reforms have not only strengthened the country’s cities financially and in terms of autonomy; the process has also emboldened mayors to form their own largely independent political forces.”
In the World Urban Forum (Katowice, July 2022) a special session on Ukraine was organised by Ro3kvit, an association of independent researchers to support Ukraine. In the course of the meeting it was stated that the decentralisation reform has been 90 to 95% implemented, with the obvious necessity to follow-up in research, capacity-building, horizontal networks and inter-municipal cooperation in the upcoming years. Hromadas (municipalities, the basic units of administrative division in Ukraine), are by now more or less financially independent and self-sufficient. After more political power and fiscal authority was granted to the local levels of administration, the problem now is a serious shortage of competent people on the local level, especially in smaller places.
The debate about post-war reconstruction: centralised or decentralised?
Although the war is still on and no-one can yet predict when and how it will end, the issue of the country’s recovery is already under discussion. This will obviously be an enormous task, the magnitude of which is unknown, but it can only be measured in hundreds of billions of USD. This amount will have to be donated largely by the international community to Ukraine.
The first ideas of the Ukrainian government about reconstruction have been published in July 2022 at a meeting in Lugano, where the potential foreign donors were all present.
In November 2022 an interesting study[4] was published jointly by the Vienna Institute for International Economic Studies (wiiw) and the GROWFORD Institute in Kyiv. The authors of this study evaluate the reconstruction plan from different perspectives, one of which is the political approach: who should lead the planning for recovery?
“The plan is to concentrate recovery projects in specific regions, where they will be supported by specific international partners. For instance, the UK has agreed to take care of reconstruction in the Kyiv region; Denmark will focus its efforts on Mykolaiv; and Sweden is ready to assist Odesa.” According to the authors, the decentralised approach of the reconstruction plan is a failure in general. However, there are a few areas where such a decentralised approach might make sense, for example, the reconstruction of local infrastructure and housing may be carried out on a decentralised basis, led by the local government in cooperation with specific donors.
A variety of available sources suggest that there is a swift debate about the political approach to the planning for recovery. Advocates of the decentralisation process are worried about a centrally administered recovery plan that would leave little or no room for the views and opinions of the local authorities.
Another battlefield: the role of the private sector in the recovery
Most recently a new law was adopted by the Ukrainian Parliament (the Verkhovna Rada) on 13 December 2022: Law 5655 on urban planning. A recent analysis[5] discusses how the law was passed bya small margin (by 228 lawmakers, only 2 more than the minimum required), for which the pro-Russian party had also to be convinced to vote for it.
According to the initiators of the draft law, it prescribes the digitalisation and automation of planning processes, as a means to radically change the business environment in the construction industry, which had previously been steadily associated with corruption, abuse and numerous stories of duped investors.
This argumentation draws on to the assumption (well known by everybody) that the urban planning procedures were corrupt. No wonder that Zelensky promised to change them in his presidential programme. Later the president addressed foreigners and private investors directly, asking them to simply pick a city and rebuild it.
However, not everyone agrees with this approach, there is strong criticism against the new planning system. Critics argue that “… one of the key problems is that Ukrainians will not be able to effectively influence the rebuilding of their country, and developers will be in charge of the situation. It means that developers will be able to create their own companies, which will «control» their own activities. Meanwhile, prosecutors and local authorities will not be able to participate in this. … the new law gives a lot of powers to the Ministry of Communities, Territories and Infrastructure Development, which can ’create significant corruption risks’”.
János Brenner, one of the foreign experts (through the German GIZ organization) most closely involved in the reform of the Ukrainian planning system, explained the essence of the draft law in a private correspondence as follows: a private expert (!) registered by the “Urban Planning Chamber” checks whether the construction plans contradict the town planning plan or not, and if he/she finds that they do not, the plans are entered into the digitised database – and that’s it! There is no room for neighbor complaints or court actions, especially not for the opinion of the municipality – at most, a complaint can be made to the ministry, but this will have little effect since everything is done digitally. Moreover, in principle, any investor can create such an expert company, so the developer can de facto investigate himself. János Brenner is quite bitter about this nonsense – if the president really announces the new law, then seven years of work in Ukraine proves practically useless.
The adoption of Law 5655 in the Parliament indicates that the political leadership of the country takes (at least, with a small margin) the side of the private developers, eliminating the power of local governments to control what is built on their territory. If so, this means that the country capitulates against the developers, entrusting the investors with the task of rebuilding, without any control exercised by the recently decentralised local governments that have just strengthened their position as leaders in their respective areas.
However, there is still hope: right after voting on the bill, a petition demanding the president to veto the law was launched and the necessary 25,000 signatures were collected almost immediately. The law has been publicly criticised by numerous architects, mayors, activists in Ukraine and beyond. It is now up to Zelensky to decide whether the law enters into force.
Interesting dilemmas of the upcoming recovery process
In my opinion, the statements made by the Ro3kvit (Urban Coalition for Ukraine) experts can be considered as sign-posts to discuss the dilemmas of recovery, what role should be given to centralised, decentralised and private actors. The main argument calls for a real multi-level governance process, within which municipalities with their increased capacities have to re-engage in land policies and neighbourhood planning. The new urban planning system has to be consultative, inclusive, environmentally sustainable, and it is essential to devise a housing management system that focuses on the needs of tenants. Ukraine should be rebuilt with Ukrainians, by Ukrainians, for Ukrainians. Of course, there is a crucial need for external financing and help in the education of specialists. Balance is needed between acting fast but in a strategically correct way. The question for whom the cities will be rebuilt, how many people will come back, and to which settlements, will also have to be clarified.
On the top of all that, efforts have also to be undertaken to learn from the mistakes and achievements from past reconstruction cases, such as e.g. Sarajevo, Pristina, Beirut, Kabul, South Korean cities, Berlin. An important lesson is the need to give enough money and time for the creation of institutions, strategy development, capacity building, and to prepare these preconditions for the time when the flow of money will start. Even in the present dreadful situation, the privatisation of public goods, such as land, buildings, and utilities should be avoided.
These are all important issues and real dilemmas. The bottomline is that in a well-thought-out, multi-level system, central and local governments and the private sector will have to cooperate and play their respective roles. Hopefully the president agrees with this conclusion…
[1] Volodymyr Udovychenko, Anatoliy Melnychuk, Oleksiy Gnatiuk, and Pavlo Ostapenko (2017). Decentralization Reform in Ukraine: Assessment of the Chosen Transformation Model. European Spatial Research and Policy 24/1. Available at https://bibliotekanauki.pl/articles/623769 (last accessed 02 January 2023).
[2] OECD (2022). Turning to regions and local governments to rebuild Ukraine. OECD Policy Responses on the Impacts of the War in Ukraine. 2 December 2022. Available at https://www.oecd.org/ukraine-hub/policy-responses/turning-to-regions-and-local-governments-to-rebuild-ukraine-9510f490/ (last accessed 02 January 2023).
[3] Brian Mefford (2020). Winners and losers of Ukraine’s local elections. The Atlantic Council. 2 November 2020. Available at https://www.atlanticcouncil.org/blogs/ukrainealert/winners-and-losers-of-ukraines-local-elections/ (last accessed 02 January 2023).
[4] Tetiana Bogdan, Michael Landesmann and Richard Grieveson (2022). Evaluation of Ukraine’s National Recovery Draft Plan. WIIW Policy Notes and Reports 61. November 2022. Available at https://wiiw.ac.at/evaluation-of-ukraine-s-national-recovery-draft-plan-dlp-6405.pdf (last accessed 02 January 2023)
[5] Maryna Shashkova: Urban Planning Reform Ukrainian-Style: What’s Behind the Controversy. Needed urban planning reform divides, but needs fine-tuning. Kyiv Post, 15 December 2022. Available at https://www.kyivpost.com/post/5767 (last accessed 02 January 2022).
Thanks, Ivan, this is a good summary. There are the same concerns in terms of the quality of housing if it stays under the control of developers without a strong intervention on behalf of the hromadas, the latter would be a key to an integrated approach addressing real-life needs which are more complex than just roof above the head.
Dear Dóra, you are totally right. I would go even further: not only the quality of housing should be discussed with the municipalities/hromadas, but in more general terms what to build where, in which form and for whom. Local municipalities should work out (in discussion with their residents) their long-term vision and all developments on their territory should fit this vision.
Érdekes lenne az a megközelítés, amikor az újjáépítés esetében nem egyes projekteket, hanem az adott önkormányzat, önkormányzatok által elfogadott komplex területi terveket finanszíroznának a donorok és a kormányzat. Ebben az esetben a tervek minősége lehetne értékelési szempont, azzal, hogy az abban lévő projekteket nem lehetne önállóan, a terv kontextusán kívül támogatni. Ekkor a nem megfelelő színvonalú komplex terv egészét kellene az adott önkormányzatnak újra gondolnia. Ezzel a megoldással talán jobban elkerülhető a “projekt vezérelt” beruházások problémája.
Igen, ezzel általánosságban egyetértek. Azonban kérdés, hogy az új önkormányzatok mindegyike alkalmas-e már az ilyen fokú önállóságra? Óriási hiány van megfelelő szakemberekben, hatalmas az igény a kapacitások fejlesztésére, különösen a kisebb önkormányzatoknál. Továbbá speciális eljárások kellenének arra, hogy a lakosság tényleges beleszólása biztosított legyen, ne csak az adott önkormányzati vezetéshez közel álló aktoroké…