It is commonly said that the infrastructure in Ukraine is in a very poor state, and in some places it is non-existent. But what is infrastructure?
In fact, this is all that ensures the functioning of the system, and it does not matter what we are talking about: a factory, a city or a state. From this it becomes clear that it cannot be equally bad or good, since this is too general a concept.
But I want to highlight three, in my opinion, system-forming types of infrastructure and think about where we can get money for its development.
Engineering infrastructure
Electricity, water and gas supply, heating, sewage, garbage collection – these “goodies” of engineering infrastructure are equipped with from 47 to 83% of housing in Ukraine. Is it worth saying that these are humiliating figures for the 21st century?
At the same time, let’s not delude ourselves – for the most part, even people who are lucky enough to use hot water and sewage can lose this at any moment, since the networks are worn out and on the verge of breaking.
Transport infrastructure
On March 1, Ukraine launched the “Great Construction”, within the framework of which it is planned to build 4 thousand km of roads during the year. And although the coronavirus and the impending crisis have made their adjustments, this is an unprecedented figure for our country.
Every dollar invested in infrastructure can increase GDP by 20 cents in dtrokovy
The length of roads in Ukraine is 170 thousand km. If we build or repair them at the same pace, it will take us 42 years! At the same time, even with these 170 thousand, we are, as always, far behind our European neighbors.
Social infrastructure
Ukraine lacks kindergartens and schools, and hospitals are mostly in terrible condition. And I’m not talking about the quality of services provided, but only about material support.
And all sorts of formats for extracurricular education and sports, except for regional centers, are often completely absent as a phenomenon. We will also include housing here – per person, as for many years in a row, there is a little more than 23 sq. m., which is at least half less than in Europe.
If we take out the capital and cities with a million inhabitants, then Ukraine, as before, lives as in the 20th century: without roads, but with directions, in huts with amenities in the yard, without the Internet and with one school for several villages.
This is a reality that no one wants to notice, because it is shameful and almost hopeless.
Where are we going to get the money to fix this?
- Financing from the state budget.
- Loans from international banks and funds.
- Money from international investors.
- Ukrainian private capital.
Sounds very simple and obvious? But for some reason it hasn’t worked for 30 years.
To change this, the state needs to finally take a close look at the fight against corruption, develop simple and understandable formats for public-private partnerships, make regulation and interaction transparent, and stop hindering businesses and investors who want to work and do something for the country.
According to McKinsey Global Institute estimates, global infrastructure spending before the corona crisis was about $2.5 trillion per year, and the socio-economic profitability of the created infrastructure is estimated at 20%.
That is, every dollar invested in infrastructure can increase GDP by 20 cents in the long term. We just need to start investing money in infrastructure in order to develop.
Andriy Ryzhikov, CEO and managing partner of the development company DC Evolution
