Despite the freezing temperatures, Kiev’s mayor Vitali Klitschko grinned through the pain as he took a dip in his city’s Dnipro River in mid January to celebrate the anniversary of Christ’s baptism in the River Jordan. According to Eastern Christian beliefs, those who immerse themselves on this day will enjoy health and success for the rest of the year.

These are qualities the 43-year-old retired world heavyweight boxing champion, popularly elected as Kiev's mayor in June 2104, badly needs in his bid to get the Ukrainian capital back on an even keel. The country has been undermined by a deep sense of grief and unease since Russian president Vladimir Putin forcibly annexed the Crimean peninsula in March last year. Russian-backed rebels have also snatched the smokestack cities of Donetsk, Luhansk and some surrounding territory, leading to more than 5300 deaths.


There are regular funerals processions for fallen Ukrainian soldiers, past the golden domes and along the cobbled winding lanes of the country’s historic capital city, Europe’s eighth largest with nearly 3 million inhabitants.

Turbulent environment

One of the first things Mr Klitschko did after his election was to set up a photographic memorial to the Maidan protests, of which he became one of the leaders. The mass street rallies led to former president Viktor Yanukovich fleeing the country, after his riot police and snipers killed 100 protestors.   

“The war may be happening 650 kilometres away, but foreign business people are still waiting for more clarity,” says Robert Koenig, an American businessman who acts as Mr Klitschko’s key advisor. “There are more and more investors coming down here to look for opportunities.”

Mr Klitschko, known as ‘Dr Ironfist’ for the power of his punches and his possession of a doctorate, has not been slow to take this message to the world. At the end of 2014, he stopped briefly in the lobby of London’s Park Plaza Riverbank Hotel to chat with well-wishers and his adoring young Ukrainian fight fans. It is a scene that repeats itself wherever the genial 6 foot 7 inch former pugilist travels. He then begins his stage interview, hosted by the Adam Smith Institute, with the “ready to rumble” catchphrase, which preceded his title fights, before taking questions from investors.

Part of Mr Klitschko’s tour of capitals in the US and Europe – he was in London to meet the city's mayor, Boris Johnson – is aimed at finding schemes to boost revenues to the city’s creaking $1bn budget, which he said “is on the verge of bankruptcy”, with accusations made that the coffers were robbed of Hrv9bn ($550m) under the previous regime. Matters are improving since the passing of the latest budget in January, stress city officials, with Kiev now solvent and set to refinance two outstanding Eurobond obligations totalling $550m.

He is also involved in a search for “new technology, new ideas”. He sees Kiev as the shop window, the outward-looking face of Ukraine, and the first destination for most foreign investors coming into the country. His team confirms that any ideas that are successful in the capital are then likely to be rolled out in other cities across the country.

Off the ropes

Kiev is slowly stuttering back to life, despite the nervous disposition and uncertainty common among many of its citizens, worried about a further military escalation.

Retailers are returning to the flagship Globus shopping complex in Independence Square, with occupancy now back to 85%. About half had previously vacated during the time of the protests. Further from the centre, the Lavina, Republic and Blockbuster shopping centres are also being developed.

One of the ideas that Mr Klitschko is currently pursuing is to increase the potential of revenue raising from Kiev's transport and parking facilities. “There are 1 million cars in Kiev, but just 6000 parking spaces,” says the mayor. “I asked former New York mayor [Rudi] Giuliani how much his city earns from parking charges and fines each year and he told me $4bn. I won’t even mention the Kiev number because it is laughable in comparison.”

Mr Klitschko will be launching competitive tenders to run parking schemes, which have seen interest from investors in France, Poland, Israel and Estonia. The target is to generate Hrv200m during the first year of operation.

Similar initiatives are also planned for waste management collection. Both departments have newly recruited heads, under the mayor’s initiative to replace 50 out of the city’s top 75 managers with new faces, unaffiliated to any political or business clan interests.

Metro fares have been doubled from Hrv2 to Hrv4 for a single journey in order to help finance the network’s expansion, including the building of a new line to Teremki in southern Kiev.

More transparency

Mr Klitschko was a vocal critic of aspects of the way in which Ukraine co-hosted the Euro 2012 football tournament, which ended up costing the state $15bn, with many contracts awarded – without open tenders – to companies linked to government members. Even work in the western city of Lviv was contracted to companies in the eastern hub of Donetsk, where the ruling clique was then based.

In a tender hailed by the authority as Kiev’s first free and open auction, FidoBank won the right to install a public Wi-Fi system on the underground transport network, to operate on an advertising and pay-for-premium business model. The bank is investing Hrv100m in the system.

Mr Klitschko is vocal about creating a much more open, competitive system of business, rather than a fixed market dominated by a handful of oligarchic groups. “I speak to my people and they understand we have a better chance for competition with a variety of parties in the market, if there is a lack of monopoly,” he says.

He is particularly keen to state the need for “transparency” and restatement of the “rules of the game”, which must be the same for all investors. And to demonstrate this he has opened up the ground floor of the Kiev administration building, so that citizens can meet officials, something previously unheard of. Glass partitions have replaced walls on other floors.

 “I understand that we will never make reforms until we can destroy corruption in the system,” says Mr Klitschko, adding that such reform is the only way to attract serious international players. “Kiev is Ukraine’s business, international and financial centre, so there is less risk there.”

Mixed reception

Sometimes Mr Klitschko loses his thread, and switches from an expressive but occasionally faltering Ukrainian to a more relaxed Russian, but wins his audience back with jokes. During the London talk, he leaves his mobile phone in the corner of the room with one of his assistants and it rings sporadically. “It’s only my wife trying to find out where I am,” he quips. “Just tell her I’m busy.”

Those connected to the authorities have mixed feelings about the political path chosen by Mr Klitschko. “He is a wonderful, warm man, and I can’t stress that enough,” says one long-standing diplomat who knows him well. “But he should have never become involved in Ukrainian politics.”

Vadym Karasyov, once an advisor to former president Viktor Yushchenko after the Orange Revolution of 2004, offers a mixed verdict. He was originally a vocal supporter of Mr Klitschko, hoping that he would be part of a new generation of non-aligned politicians, but has not been overly impressed by his performance as Kiev's mayor.

“Vitali has not been successful as a mayor, but neither has he been disastrous,” says Mr Karasyov, now Ukraine’s best known political pundit. “These are difficult times for Kiev and Ukraine, but he has disappointed many people with his lack of ideas for the future.”

While Mr Klitschko talks about dismantling the oligarchic system of warring business clans, he is himself a product of this system, says Mr Karasyov. Mr Klitschko is known to be close to business figures such as steel pipe boss and philanthropist Victor Pinchuk, former Donbass boss and Shakhtar Donetsk football club owner Rinat Akhemtov and fertiliser king Dmytro Firtash, currently living in Austria. “The oligarchs originally supported Vitali because they saw him as the only alternative to Mr Yanukovich and as a potential future president,” says Mr Karasyov.

These criticisms are dismissed by Mr Koenig. “I walk around the administration building and see new life and people who want to work and change things,” says the businessman and political advisor. “Donors from the UK and US can see the changing mentality of the Kiev administration and how they are embracing best business practices. There is an energy in the building that was not there before.”

But Mr Klitschko knows he has a tough battle ahead, even more so than he had in his 47 professional fights, of which he won 45, 41 of them with knockouts.

“I dreamed of being the strongest in the world, of being heavyweight champion and nobody believed I could do it, but I proved them wrong,” he says. “Now I dream of helping my country and many people said I wouldn’t be able to do it. But that’s my dream and I know it will become a reality.”