The Decibel - Short on cash and power, Ukraine faces a dark Christmas

Episode Date: December 22, 2022

Ukrainian President Volodymyr Zelensky arrived in Washington on Wednesday. It’s his first known time outside of Ukraine since Russia invaded more than 300 days ago. He’s meeting with President Joe Biden, national security officials and addressing Congress. It’s a bid to shore up more weapons and money in order to fight the ongoing war.The meeting comes at a time where Russian aerial attacks on Ukraine are ramping up. The main targets are power grids, which is leaving many in the country in the dark and cold for hours. The Globe’s European Bureau Chief, Eric Reguly is on the show from Kyiv.Questions? Comments? Ideas? Email us at [e-mail]

Ukrainian President Volodymyr Zelensky arrived in Washington on Wednesday. It's the first time he's left Ukraine since Russia invaded, more than 300 days ago. And Zelensky was asking for more weapons and military funding. This will be the last question. Olga Kushlenko, OnePlus One TV channel. Can we make a long story short and give Ukraine all capabilities it needs and liberate all territories rather sooner than later? Thank you.

Well, his answer is yes. I agree. This comes as Russian aerial attacks are ramping up. The main targets are Ukraine's power grid, which means frequent blackouts. Many people in the country are left in the dark and cold for hours on end. Today, I speak with the Globe's European Bureau Chief, Eric Reguli. He's in Ukraine's capital, Kyiv. I'm Aina Karaman-Wilms, and this is The Decibel from The Globe and Mail.

Eric, thank you so much for talking to me today. A pleasure. I know we're reaching you in a situation where it's all dark there. You don't have a lot of light or electric. You don't have electricity. You have no light, no heat. So this is something we really appreciate you doing here. Yeah, well, the electricity has been going off, I'd say, about half the day.

We never know when it's going to... There's no warning when it's going to be cut off. There's no warning when it's what's coming on. And it's been off since it's about six o'clock p.m. here. And it's been off for about eight hours. Wow. And how cold is it? It's starting to get cold. It's, you know, it's about at the freezing point now, maybe a little bit below

night. But I was warned about this. So I have a huge suitcase of long underwear and sweaters and scarves. And when there's no electricity at night or no heat, we just bundle up and go to bed and tough it out. Wow. Wow. This is, I mean, so it's obviously, it's starting to be winter there. It's a cold time of year in Ukraine. It's also the holiday season. It's the first Christmas in Ukraine since this war started. And Eric, I know you recently went to a mall in the capital city of Kyiv. Can you tell me what was it like there in that mall? We went to the biggest mall in Kyiv. It wasn't crowded at all. There's a trickle of people in there. It didn't seem festive. I mean, there might have been one or two

Christmas trees up, but it felt somber. Though they were trying hard, on the top floor, the third floor, there was a concert going on again, thinly attended, I'd say two, three dozen people there. And it was designed to raise money for the military. We talked to parents there and talk to kids, talk, talk to shoppers. And one family said, look, we're not, we're not doing Christmas tree this year. We're not doing presents, partly because the inflation rate is so high here. It's like 25 or 26 percent. People are not only suffering from the war, but they're suffering from really high inflation. And they just can't afford things. It's not just shopping that brings people to the mall.

There's a recent addition called this power hub or an energy hub in the mall. Can you just tell me what that is? Yeah. I don't know what it was before, but it was obviously a very large store. I mean, it was hundreds and hundreds of square meters. It looked modern. It had dozens of desks, dozens of chairs, dozens of sofas. And that's where you go to plug in your phones and your computers when there's blackouts. And the blackouts last a long time in this city. I mean, like today, we've been out of power for eight hours now. So they can, they were three or four hours. Now they're becoming eight, 10, even 12 hours.

But also heat. I mean, they can go there to warm up. I mean, this mall is huge and it attracts thousands of people. So I imagine, I mean, it looked like people were working there, that they were just using it as a temporary office because of the blackouts. You never know which parts of the city are being blocked out. So you can go there, get warm, plug in your computer, your phone, do some correspondence, that kind of thing. Yeah. Now, some restaurants and cafes, many of them in Kiev have generators, and they're obviously hard to, they're easy to find.

I mean, because of the noise, I mean, there is a din of diesel and gasoline generators right outside this apartment building, and they're on all the time generating electricity so they can stay open when the blackouts happen. And of course, this energy hub in the mall exists because Russia is targeting power grids throughout the country. What is Russia's goal with this, Eric? What is Russia trying to accomplish by targeting these power grids? Oh, it's to demoralize the population so they lose interest in supporting this war. That's why everyone I've talked to is expecting a Christmas attack, you know, just to anger and sadden everyone in this country. So I think Putin, I mean, it's obvious what Putin's trying to do. He's trying to force Ukraine into a peace agreement,

which would allow him to keep the parts of the country that he seized already, you know, in the Far East, in the South, Crimea. But I don't think it's going to work. I mean, one thing that has struck me here is that despite the hardship here, despite, you know, the obscene numbers of death, morale is still pretty high. I mean, really high. There is a fighting spirit here. There is optimism. It's quite infectious, I find.

And Ukraine is convinced it's going to win the war. So morale is high, but these are difficult times, I guess, too. Can you maybe tell me about some of the people that you've talked to and how they're feeling? What have they said about that? Well, I talked to the people in the mall, like this one woman in her early 30s. She actually works at an embassy here. And she said, Putin can do, we fully expect an attack in and around Christmas, but he can do what he wants, but it's just going to make us angry. And that anger is going to make

us fight harder. President Zelensky was in Washington on Wednesday visiting U.S. President Biden. And Biden pledged nearly $2 billion for more military assistance to help Ukraine in this fight. So they're, of course, asking for these weapons because they are getting bombarded by Russian attacks. And it is having a significant effect. Earlier this month, on December 16th, the state power company declared a system emergency in Ukraine and reported a 50% loss of power within the country's electricity system. So that's significant. Yeah. And some of these utility workers, I mean, they're working around the clock to repair these grids. So some of them have been wounded or killed. There's a company called DTEK,

which is the private power generator here. And it's lost several employees who were attacked as they were trying to fix the grid. I know you said you spoke to a few people in the mall, Eric, and I know you spoke to a father and his seven-year-old daughter. I think her name is Olena. Yeah, a little blonde girl, seven years old, Olena. And her father told me that, they don't really use the term Santa Claus here. It's Grandpa Frost. And her father told me that they don't really use the term Santa Claus here it's it's grandpa frost and her father told me that Alina said to him that we don't want grandpa frost this year because he's worried he's gonna get shot down and what what

this little girl was referring to was the Ukrainian anti-aircraft guns, which actually do take down cruise missiles and the drones. So, I mean, this poor little kid understood that a war is going on. And he also said that when the air raid sirens go on, that she knows enough to get away from the windows because, you know, if there's an explosion nearby, the windows could shatter and send glass, like, shrapped all through the house. So this kid knows their routine already. I mean, how sad is that?

We'll be back in a moment. These blackouts, and of course the ongoing war, have also had a huge impact on Ukraine's economic situation. And Eric, I know you recently sat down with Ukraine's finance minister. How did he keep the country running financially when the war started in late February? He was a great interview. He's called Marchenko, Sergei Marchenko. He's quite young. He's in his early 40s. He's actually quite close to Canada's Chrystia Freeland. On day one of the war, they set up a remote finance ministry in the western part of the country. Secret location. All the computers are there, the databases, Microsoft, Oracle. You know, everyone was there.

And they didn't miss a single salary payment, still haven't, and they did not miss a single pension payment for the pensioners in this country. I mean, it's a miracle. It's just incredible. And what about since then? What he's been doing is two things. One is, is he has gone around the world asking for money. They, they, Ukraine is getting, you know, tens of, this year alone, they've got $27 billion, US dollars, roughly half in loans,

roughly half in grants. Of course, Ukraine would rather have grants because grants, you don't have to pay back loans you do. Most of the grants have come from the United States, a little bit from Canada. Most of the loans that come from the European Union. So every month, there are 5 billion US dollars in the hole. come from the European Union. So every month there are five billion U.S. dollars in the hole. That's that is the budget deficit every single month. And they have to fill that or the country goes bankrupt. So that's that's a huge, huge challenge. And most of the budget, I think about 60 percent of the budget is going to the military. The other thing that Marchenko, the Ukraine finance minister, is doing is printing a lot of money.

Well, he's not doing it. The central bank is printing a lot of money to help fund the deficit. And when you print money, you get inflation. So the inflation rate here is 26%, which is huge. And that is really hurting people's lives here. Their salaries are not going up 26%. The poverty rate, this is what really struck me when I interviewed this man a few days ago. The poverty rate before the war in Ukraine was about 5%. Now it's 25%. So one in four people is officially poverty stricken in this country. And what about like benefits and stuff?

Like if you're on like a disability benefit, things like that? Oh, yeah. I mean, those are still getting paid. But the point is the inflation rate is so high here that, you know, your money is not going as far as it used to be. And the inflation rate is going to stay high. Is there any sense that there will be an economic bounce back for Ukraine, like that they'll actually be able to kind of dig themselves out of this financial hole? So they're predicting a 33% drop in GDP this year. It's a one-third drop in economic activity in this country. Next year, the official forecast is for slight growth, but slight growth from a very

low level, 33% down. But I said, are you certain about that? And he said, absolutely not. We were worried that it could become even worse next year. And I said, why not. We were worried that it could go become even worse next year. And I said, why? He said, because the attacks on the electricity grid are so severe, so frequent that, you know, you can't run a factory with no electricity. So this, if these attacks on the electricity grid, the power grid, continue and are widespread and successful, so far they have been, then all bets are off in the economy. All bets are off. Eric, you've been covering the war from the beginning, but from countries outside of Ukraine, you're now actually in Kiev there, in the dark, experiencing these blackouts firsthand. What is it like for you to now be inside the country? Yeah, I mean, I've been covering NATO.

I've been in Brussels a few times. I was at the NATO summit. I was on a NATO mission in early March, right after the war started. We were up in a radar plane. It's like a converted 707 with a huge radar dish. And we were flying in Polish airspace right on the Ukrainian border, watching on the radar, watching the Russian jets from Belarus and Russia coming in to bomb Ukraine. We're watching them in real time. And that's when it hit me that this war is real. But to be on the ground and to actually talk to people really, you know, is completely different.

I mean, I'm in a war zone. I'm a war correspondent in a war zone. I'm a war correspondent in a war zone. I mean, there's no fighting here, but every day we're having air raid sirens. Every day people in Kiev are going into bomb shelters. And it's become part of everyday life, but it shouldn't have to be. Eric, thank you so much for taking the time to talk to me today. Thank you. It was a pleasure. And I hope to talk to you again. That's it for today. I'm Mainika Raman-Wilms.

Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show. Kasia Mihailovic is our senior producer, and Angela Pichenza is our executive editor. Thanks so much for listening, and I'll talk to you tomorrow.