The regions pulling ahead and falling behind

Ukraine's regions were never economically uniform, and the gap between them has widened substantially. The direction of the change is worth setting out because it inverted a long-standing pattern.

The old map

Heavy industry in the east and south-east, agriculture through the centre and south, services and lighter industry in the capital and the west. The industrial regions had higher output per person and the west had the highest labour migration.

The new one

The west has gained: population, relocated businesses, logistics functions and the services that follow people. The centre has held. Regions near the front have lost enterprises, population and access to their own markets.

The reversal is real and it happened in a very short time, largely through private relocation decisions rather than policy.

What determines a region's position now

Distance from danger, first and unavoidably. Then whether the region received relocated business, which was a function of premises, labour and connections rather than of incentives. Then energy and logistics reliability. And then administrative capacity, which determines whether a region can absorb the funds available to it.

The policy response

Relocation support for enterprises, regional development funding, and infrastructure investment in the receiving regions to cope with the population that arrived.

The harder question is what to do for the regions that lost, and the honest answer is that nothing works until the underlying condition changes.

What to watch

Whether relocated businesses stay. If they do, this is a permanent redrawing of the economic map; if they return, the divergence closes. That is a decision being made firm by firm right now.

That the new map differs from the old one shows up in my own sales territories too: regions I counted as weak ten years ago are now among the most reliable payers. What sets a region's position is no longer its industrial inheritance but its logistics access and the quality of its local administration. Those two are what to watch — because both can be changed.