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Speaker 1: Bloomberg Daybreak Europe weekday mornings at six am on London

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Speaker 1: DAB digital radio and on demand via the Bloomberg Business

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Speaker 1: app on Bloomberg Radio dot Com. Hello Stephen and Caroline here.

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Speaker 1: As we approached one year since the start of the

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Speaker 1: Russian invasion of Ukraine, we wanted to bring you one

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Speaker 1: of our interviews about the war and its effects on

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Speaker 1: the country's economy. Yes, we were speaking to the president

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Speaker 1: of the Kiev School of Economics. He's a former Minister

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Speaker 1: for Economic Development, Timafol Milovanov, and he spoke to us well,

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Speaker 1: first of all about the economy, the state of the

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Speaker 1: economy in Ukraine now, with kind of the personal anecdotes

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Speaker 1: of what it's like to be in different parts of

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Speaker 1: that country now, what really is functioning, what is not,

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Speaker 1: which I thought was fascinating, but also about why this

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Speaker 1: is a battle of ideas. We asked him about why

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Speaker 1: it's sort of so important to keep that school of

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Speaker 1: economics going, and we also had a conversation with him

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Speaker 1: about where Ukraine's economy goes now in the future, the

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Speaker 1: changes that have taken place because of the war, and

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Speaker 1: how they're actually laying a foundation for future development. For

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Speaker 1: the country as Ukraine is looking to its future, to

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Speaker 1: a post war future. He gave us some of his

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Speaker 1: insights about what he thinks that looks like and also

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Speaker 1: some optimism about where Ukraine goes. Here's our conversation with

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Speaker 1: Timothy milivanav it is adapted to the war. Surprisingly, if

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Speaker 1: you go outside of your apartment, let's say in Kiev Orliviv,

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Speaker 1: you will see traffic gems, you will see shops working,

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Speaker 1: you will see big and restaurants. You can get guacamole,

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Speaker 1: you can get sushi. Most of the services are fully functional.

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Speaker 1: Of course, the situation is different when it comes to industry. Manufacturing.

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Speaker 1: Supply chains have been disrupted, logistics as difficult, and a

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Speaker 1: lot of facilities and the manufacturing capabilities have been destroyed.

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Speaker 1: So some of the companies have to go through radical

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Speaker 1: adjustments and pivots in their business models. Mostly rearient in

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Speaker 1: the type of products that do services to Isaac Taylor,

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Speaker 1: to the needs of the defense effort, or to try

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Speaker 1: to change production and services in such a way that

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Speaker 1: the logistical costs are low. Of course, in the front

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Speaker 1: line cities there are the economic situation is much more difficult.

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Speaker 1: When the war ends at some point, how can the

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Speaker 1: Ukrainian economy be rebuilt? What international help will be needed

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Speaker 1: To answer that question. We need to be clear about

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Speaker 1: what it means for the war to end. Of course,

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Speaker 1: most people think about the scenario that it's something like

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Speaker 1: post World War two or post any other war. You know,

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Speaker 1: there's a very clear end to the war and you

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Speaker 1: can rebuild and people are living peacefully. But I don't

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Speaker 1: think that's most likely scenario because that's not what we

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Speaker 1: have seen after twenty fourteen, two thousand and sixteen, when

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Speaker 1: the hostilities and the fighting and the war subsided in

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Speaker 1: the East of Ukraine. I think the most likely scenario

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Speaker 1: for Ukraine will be some version of a Cold War

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Speaker 1: where Ukraine is very well protected but the attacks continue.

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Speaker 1: Maybe they will not be of the same level, but

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Speaker 1: they will continue. So that's going to shape the way

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Speaker 1: the economy is going to be rebuilt. It will have

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Speaker 1: to continue to be some kind of war or warlike economy.

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Speaker 1: It's a little bit of Israel, but a much larger scale.

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Speaker 1: So rebuilding will be there. But I think two or

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Speaker 1: three issues have to be taken care of, and a

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Speaker 1: lot of thinking has to go into it. Right now.

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Speaker 1: One is prioritization. What do we rebuild, where do we

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Speaker 1: rebuilt in what way we're rebuilded. The second one is

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Speaker 1: financing and insurance. The elephant in the room is the

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Speaker 1: we're going to confiscate the Russian the frozen Russian assets.

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Speaker 1: I think that's the fairst thing to do, because it's

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Speaker 1: just the moral right and it's much better than you

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Speaker 1: sta spares money of other countries. In the second issues insurance.

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Speaker 1: If we're going to bring some private capital, and we

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Speaker 1: should bring private capital in, we need to have insurance

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Speaker 1: because the simply the private capital won't be able to

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Speaker 1: price the projects. And the third one is the government structures.

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Speaker 1: We need to give sufficient comfort to the international community,

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Speaker 1: to the free world that Ukraine is not corrupt, that

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Speaker 1: the governance is clean, transparent, that the best practices are there,

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Speaker 1: and it's pretty much looking like a European or North

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Speaker 1: American country or an anti market. Well, that's something the

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Speaker 1: IMF has talked about recently, praising Ukraine's progress and strengthening governments,

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Speaker 1: reigning in corruption, laying foundations for post war growth. Are

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Speaker 1: you helpful that these reforms will last and will deepen

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Speaker 1: into the coming months. In the post war periods. There

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Speaker 1: is a difference between the level of corruption and Ukrainian

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Speaker 1: level of governance problems and the perception. And I think

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Speaker 1: the perception is much worse than the reality because Ukraine

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Speaker 1: was at peak of the corruption in sometime in two

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Speaker 1: thousand and thirteen, when then Russian proxy president Yellow Coach

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Speaker 1: basically took over the entire economy. It was run, you know,

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Speaker 1: not even as a corrupt economy. It was run as

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Speaker 1: a thug economy. But that is past. In Ukraine. No

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Speaker 1: one would even imagine something like that happening today. Do

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Speaker 1: we have problems in corruption, absolutely, Have we set up

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Speaker 1: an infrastructure to fight it. Absolutely? Do people want to

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Speaker 1: get rid of corruption, Absolutely, because today every Ukrainian understands

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Speaker 1: that a dollar of Haribonize, the local currency, is stolen.

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Speaker 1: That simply means less ammunition to the front lines, and

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Speaker 1: that means more people will die. Timothy, I want to

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Speaker 1: ask about the keep school of economics. You've managed to

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Speaker 1: operate through this war year of conflict. Why has that

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Speaker 1: been so important to keep it going. We want to

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Speaker 1: demonstrate that we can be successful during the war. This

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Speaker 1: is our answer to Russia. We also want to demonstrate

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Speaker 1: that we are as good as it gets that for example,

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Speaker 1: when we do policy research, policy advice, when we do

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Speaker 1: damage assessment or recovery framework development, this gets cited in

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Speaker 1: the top outlets, by the Economies, by the Washington Post.

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Speaker 1: It is used by the State Department or by the

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Speaker 1: Youth Commission to inform their decision making. So this is

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Speaker 1: our fight for intellectual sovereignty. We also want to show

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Speaker 1: a role model to other universities in Ukraine and we

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Speaker 1: want to bring this sense of normalcy to our students.

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Speaker 1: But finally, and I think that's the most important. Education

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Speaker 1: to me and research to me, and signs to me.

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Speaker 1: Academi to me is a sign of hope because we

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Speaker 1: want to have the future in Ukraine. We are fighting

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Speaker 1: for survival and it consists of defending ourselves today and

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Speaker 1: being well educated and well informed to be successful. Tomorrow

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Speaker 1: Bloomberg Day Break Europe weekday mornings at six am on

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Speaker 1: London DAP digital radio and on demand via the Blueberg

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Speaker 1: Business app on Bloomberg radiop dot com