Institute for War and Peace Reporting | Giving Voice, Driving Change

Ukraine's Economic Future Hard to Read

Kiev-based advertising executive discusses the investment climate amid continuing uncertainty about Moscow’s intentions.

I am the managing director of Y&R Advertising, based in Kiev. We have global clients like Danone and Colgate as well as local ones. So far, none of my clients has suspended any of their plans, but everyone is watching the situation very closely and monitoring each day’s events because it is impossible to predict what will happen tomorrow. 

People are poised to change their strategy. They understand that a real war would change everything dramatically.

As far as media campaigns involving television, radio and so on are concerned, some companies suspended activities when the protests on the Maidan square became violent and people were killed. Some international brands as well as Ukrainian ones thought it was inappropriate to show ads featuring happy, smiling people when others were getting killed. Other stopped because of the economic uncertainties, wanting to preserve their funds in case things got worse.

As far as planning creative campaigns and shooting commercials goes, our own programmes haven’t changed so far. If you stop this process, it can be hard to get back on track. But I know clients are very cautious.

We don’t know whether the conflict will stay within Crimea or whether it will touch our southeastern border with Russia, or even reach Kiev. I cannot draw a really clear picture, as the situation is changing from hour to hour.

The crisis began with economic problems, or at least developed in parallel with them, and everything – the Maidan revolution and the crisis with Russia – only escalates these problems. We saw huge inflation affecting the local currency, the hryvnia, which a month ago went from eight to the US dollar to ten in just a few days. This influences all our indices and business plans.

In my line of work, we have never been in such a situation before. After the president resigned following the Maidan protests, there was huge hope. We saw a commitment from the international community to invest in Ukraine and integrate the country more quickly into global markets. That gave us confidence that we would have a chance to stabilise and actually grow our economy.

But if Russia starts a “hot” war, all this could stop. I don’t think people will want to invest somewhere where there is an active conflict.

Russia is very much against Ukraine becoming more integrated with Europe – that is why this whole situation came about. They want to keep us within their sphere of influence, and there are no signs that Vladimir Putin is scared of the international community.

All in all, Ukrainians are very sceptical about the sanctions against Russia. But I personally realise that this is a gradual process. Putin can avoid acting via the legitimate process, but the world has to proceed according to the law. I think this is the right direction and I hope it will not stop. Without the world’s backing, we will not survive.

Russia’s takeover of Crimea was acted out with incredible efficiency. It happened in a flash and we were not ready for it. Ukraine was a country that had just had a revolution, with a new government and in a very weak position. And Putin acted very swiftly.

Political analysts in Ukraine are now saying that the Crimea takeover was planned years ago. The situation with the Maidan protests accelerated matters and Putin had to act, even if it wasn’t quite the right moment for him to do so. Now, Russia is watching how things develop, and we don’t know what its plans are.

We have a proverb – the last thing to die is hope. But right now I can’t see how we can take Crimea back. We don’t have a strong army, as it was weakened by our former president, a puppet of the Russians.

For us, it’s better right now to concentrate on how to protect our borders and build our economy, with help from Europe so that Putin understands Ukraine is not on its own and at least has economic support.

I have never experienced anything like this. The last few months have been frightening. People are killed in the street ten minutes from your house. You send your children to school because you cannot keep them at home for months and months, but you don’t know what will happen by the time you go to collect them. It was scary when the Maidan violence broke out and snipers were killing people.

Now, everything seems calm and nothing unusual is happening in Kiev, but somewhere in the background you feel there is danger of a different kind.

But we cope. People support each other, and the important thing is that because of the situation, Ukrainians have been rebuilt as a nation. We have started to identify as a nation more and we have become more united. That is a very positive thing, that I don’t remember feeling before. I am proud of my country. This is probably what keeps people going.

Interview conducted by IWPR editor Daniella Peled.