The debate discussed whether capitals should be the primary drivers of economic development in countries. Those for the motion argued that concentrating resources in the capital allows a country to attract global talent and investment through scale economies. However, others against the motion argued that over-focusing on the capital risks unequal development and lack of diversification. While the capital may see growth, other regions could be deprived. The debate concluded with those against the motion winning, as concentrating all resources in one city may not be the best path forward for balanced national economic development.

1. www.debaty.org
CAPITALS SHOULD BE KEY DRIVERS OF COUNTRIES’ ECONOMIC DEVELOPMENT
PUBLIC DEBATE BRIEF
May 31st, 2011
Teacher’s House, Kiev, Ukraine
The debate ‘Capitals should be key drivers of countries’ economic development’ was organized by the Foundation for Effective
Governance and Intelligence Squared in cooperation with the Kiev City Administration within the framework of presentation of
the Kiev City Development Strategy draft for public discussion. Mustafa Nayem, a well-known Ukrainian journalist, moderated
the debate.
Capitals often turn to be the places of concentration of infrastructural, financial and human resources. A capital city could be
turned into a globally competitive center of attraction for talent and investments much more easily than any other part of a
country. It would definitely spur economic growth within the capital. But would it also benefit the whole country or make it more
economically vulnerable by depriving other regions of adequate growth?
The panel FOR the motion asserted that prioritizing the capital in regional development would allow the whole country to
benefit from its prosperity as it would positively effect other regions, through innovation and investment transfer. The panel
AGAINST attacked the motion from two different standpoints. First argument was for the need of diversification of economic
activity within the country for risk management purposes, although it still favored concentration but in more than one center.
Another argument was more radical as it insisted on equal distribution of resources within the country to allow for equal
opportunities. The panel against the motion won the debate turning initial 28% support into 54% during the course of the
debate.
This series of Public Debates serves as a social forum for discussion of issues important to Ukraine’s economic development. The
project is designed to foster a culture of constructive and substantiated debate, and to assist in forming public awareness on the
key economic challenges facing Ukraine.
Speakers FOR the motion Speakers AGAINST the motion
Martin Raiser Volodymyr Groysman
Country Director Mayor of Vinnitsa
World Bank Regional Office
for Ukraine, Belarus and Moldova
Fred Eisenberger Evgeny Orlovskiy
Рresident Senior Project Manager
Canadian Urban Institute, Monitor Group
ex-Mayor of the city of Hamilton, Canada

2. Key Statements
Martin Raiser: “The concentration of economic activity in big Volodymyr Groysman: “It is wrong to develop just Kiev without
cities is a good thing as it allows you to attract talent from all paying attention to what is going on in other cities because I
over the world and use economies of scale. If you look at the believe all development processes are interrelated. If Kiev
map of Eurasia, Ukraine is a flat landscape, Kiev is a little hill starts growing too fast, the quality of life here will be
compared to the big mountains, which you find in Western substantially worsened. We should not try to build a mountain
Europe and Japan. It should become a bigger mountain - it will out of Kiev, instead we should elaborate development plans for
be good for Kiev, but it will be also good for Ukraine. It does all the cities of Ukraine to develop the whole country. It’s not
not always have to be a capital city, but when you have a city just Kiev where people live, in other cities people also want to
like Kiev with its brand and historical heritage it makes sense to have access to decent life standards”.
use it”.
Fred Eisenberger: “If you don’t have strategic planning in place Evgeny Orlovskiy: “Concentration of resources in one place is
in your other communities then let Kiev lead the way and its wrong, we should diversify instead. The whole country should
lessons can be shared all the way across the country to the not depend on the wellbeing of one economic center.
benefit of the country as a whole. Kiev is one of those areas Moreover, Kiev is already rather developed, if we invest more
where you have talent, so industries want to gravitate there to the effect would be marginal. Furthermore, look in the
take advantage from it. It will generate activity and attract European Union, its Neighborhood Policy is the world best
investments from around the world which will drive Kiev practice. The EU invests into its neighbors as it realizes that it
forward, but will drive the entirety of the country’s economy benefits the member countries. It is also in Kiev’s interests to
forward all at the same time”. have its neighbors develop in accord with itself!”
Q&A Session with the Audience
Q: “I think that national economy should diversified geographically. Why not follow the example of Europe?”
A: Martin Raiser: “In the case of regional policy, in my view the European model is very expensive for Ukraine. What Ukraine really
needs is foreign direct investments to become globally competitive. And you don’t do that by spreading it across 50 different
locations, you do that by creating one or two centers where investors will come. And in my view Kiev is one of them… In Europe
there are lots of programs to try to keep people where they are, but Europe can afford this. In Ukraine you should instead facilitate
people’s mobility to come here, so that they go where jobs are, rather than spending a lot of resources to bring the jobs where
people are. That’s much less effective.”
Q: Andriy Shevchenko, MP of Ukraine: ”Please name the exact cities to which you think central government should pay more
attention then to Kiev. Because otherwise it sounds more like ‘spread the butter equally over the bread’.”
A: Volodymyr Groysman: “There is a theory that apart from Kiev we should pick up 5 more cities with high growth potential in the
east, west, south, north and center of the country. Those cities would develop and therefore foster the development of
neighboring regions so that the whole country will be developing.”
A: Evgeny Orlovskiy: “We should not try to spread all our limited resources equally over all the regions of Ukraine. That would not
be effective. The question is rather about sequencing in distribution of resources. Currently we invest into the 4 cities which will
host the EURO-2012 championships. Then we can pick another 4 and then another 4 and so on. What is important is that we don’t
spread the butter equally but first decide what will be the key development drivers in each region, which initiatives will provide
highest returns and invest into them.”
Voting Results
Further information and the video version of the
debates are available on:
www.debaty.org and www.feg.org.ua
FEG, 23-F Kudryavska str., Kiev, 04053, Ukraine
tel: +380 44 501 41 00
feg@feg.org.ua