Promise in Two Cities of Ukraine
In the Lviv Oblast, along the forested western border of Ukraine, the city of Chervonograd stands as a union of diverse traditions. Palatial architecture sits among proletarian constructions, museums showcase artefacts historical and contemporary, and old religious centres and monuments gleam among the storefronts of modern businesses. Since the 1950s, the expansion of the city’s mining industry invited further enterprises, but the city's surge of growth and population have been declining as the mines have become unstable and unprofitable. Chervonograd is one of many cities affected by the closure or imminent closure of state-owned mines across Ukraine.
On the steppes of the eastern border in Donetsk Oblast, Myrnograd is the very definition of a “mining town”, having been born from and being deeply connected to mining for centuries. Along with the mines deteriorating, past prosperity dwindling, and rapid population loss, the city’s proximity to the current armed conflict at the border exacerbates an image of tragedy and heartbreak. Myrnograd's population is declining at a much more rapid pace than Chervonograd's – its current population is 47,460 citizens, compared to Chervonograd's 68,519 citizens. However, trends toward gastronomic ventures, the arts and unique sports show the people are proving their skill and are resolved to adapt to a changing future.
Miners and their families now face a transformation of identity. The establishment of more diverse economies in their cities ensures they will have a future independent of the mines. The formation of multiple industries within one community weaves a safety net in case one business or service falters, but even more importantly, the cultivation of a city full of leisure activities, development, education, culture and other opportunities creates a place where people choose to stay, live and flourish. We aim to assist the people of Chervonograd and Myrnograd in imagining what each of their own futures looks like by conducting pilot studies that consist of seven steps (read more at The Butterfly Effect: Piloting research to support the sustainable transformation of Ukraine's coal mining towns (undp.org). This blog post is about the results from Step 1: System Mapping.
System mapping is the creation of a map of all existing and planned organisations and initiatives related to possible transformative change in a city at different levels. “We distinguish at least five levels: the community level, small- and medium-sized initiatives, large-scale initiatives, public services and regulations. This is because transformation happens when there are initiatives at all those levels,” says Itziar Moreno, Scientific Director at the Agirre Lehendakaria Center* and a mentor of the “Butterfly Effect” Project. “Scientific results show that transformative change does not happen by introducing one big "unicorn" solution – we need transformation in a number of areas,” adds Oksana Udovyk, Head of Experimentation of the UNDP Accelerator Lab and initiator of the “Butterfly Effect” Project. Thus, to see the overall transition potential of a city from a mining industry to an alternative one, we need to identify and visualise all organizations and initiatives at five different levels. This means we look at the following elements:
1. Existing organizations’ community interests (companies, public institutions, NGOs)
2. Existing and planned initiatives by those organizations and similar on different levels mentioned earlier (community initiatives, start-ups growing organisations, stable alternative industries, public services, regulations)
* Agirre Lehendakaria Center (ALC) is a Basque Social Innovation Lab established in 2013 by the University of the Basque Country (UPV/EHU) in partnership with AC4-Columbia University in New York. ALCK was created to better understand the Basque experience of socio-economic transformation from a multidisciplinary, systemic perspective. ALC fosters community transformation processes through open, Social Innovation Platforms based on culture as a driver of change. The main goal of the lab is putting into practice the findings from our research on systemic transformation, in order to address the most complex challenges that are facing society. The key differential element is the integration of culture, narratives and values from each community toward a holistic vision of Sustainable Human Development.
Data Collection and Methodology Explained
The tool we use to draft the system maps for the cities is called kumu.io, which outputs data in a visual format. Organisations operating in the city appear as interconnected dots, their relative size reflecting their prominence – whether by number of employees or profit.
To begin mapping, we collect and input data into kumu.io from available official sources. Our colleagues from the Centre for Innovations Development (CID) have developed a unified big data platform (economic profile of the communities), which provides up-to-date economic and social indicators of the communities based on systematised information generated from more than 100 official state sources. The economic profile of communities provides data on business entities, individual entrepreneurs, major taxpayers, active assets, debts, and so on. This allows us to “download” information about all private and public business entities functioning in the cities. We have not uploaded all organisations, as our selection criteria was to include the leading organisations by number of employees and the top organisations by profit. Kumu.io outputs each organisation as a dot on the map.
Here is the summary of the CID unified big data platform analysis:
Moreover, together with results from CID unified big data platform and by looking at the created visualized kumu map, we were able to “bust” the main myths surrounding the coal mine phase-out in Ukraine.
Myth #1 – Coal mines are the main—if not the only—employer in the cities
When looking at the number of employees in each organisation in each city, the biggest dots appearing on our kumu map were the coal mines. Both cities have approximately the same number of mines, but Myrnograd relies more heavily on a single mine with a large number of employees, whereas Chervonograd spreads employees over several mines. However, Chervonograd reveals additional dots of comparable size to the mines. One of the city’s largest employers is Chervonogradska Central Hospital at 1,034 employees in 2018 and 987 in 2019. Kyiv-Zahid Trade Company; Kalyna Factory; the Chervonograd factory of lingerie, corsetry, bathing suits and other garments; Duna-Vest manufacturer of socks and tights; and the Chervonograd Steel Construction Plant all hold a high employee count not far behind the mines’.
Even though Mine Nadiya is one of the largest employers (726 people in 2019), their wage debts were UAH 1,553,484 on 17 November 2021.
Conversely, Myrnograd has only one alternative big employer: APK-Invest, an agricultural company producing grains and meat. APK-Invest employed 1,961 people in 2016 and 2,125 in 2019. The next closest large employer (not in Myrnograd but operating in the neighbouring city of Pokrovsk) is the international MetInvest group, which includes mining, steel enterprises and sales networks in Ukraine, Europe and the United States.
Despite the fact that MyrnogradVuhillya is one of the largest employers (3,859 people in 2019), their wage debts were UAH 816,142 on 17 November 2021.
Myth #2 – Coal mines are the main economic drivers in the cities
When looking at profit in Chervonograd and Myrnograd by organisation, the dots representing the mines suddenly disappear from the system maps. Instead, the map of Chervonograd reveals the most profitable organisations are in trade, metal, textiles and agro. Myrnograd’s most profitable organisation is in agro.
Among top three unprofitable entities are mines entities: Vizeiska Main (UAH -607.5 million as of 2020), Nadiya Main (UAH -36.5 million as of 2020) and Lviv Mine Company (UAH -16.5 million as of 2020).
Among top three unprofitable entities are mines: Myrnogradvuhillya (UAH -307.8 million as of 2020) and Vuglepromtrans (UAH -12.3 million as of 2020).