The cranes that loom over Odesa’s docks stand idle, the cafes and restaurants along its waterfront corniche are largely empty of customers and no ships are visible as dusk falls over the Black Sea.
Vladimir Putin’s war in Ukraine has caused carnage across the country, but in Odesa — a port city known for its busy sea terminal and bustling tourist traffic — it has brought an eerie silence.
The Odesa region has been the target of repeated missile strikes since Russia’s invasion in February, including last week’s attack on a recreation centre and apartment block that killed 21 people. Another this week destroyed a grain storage facility as Russia stepped up its effort to cripple Ukraine’s economic infrastructure — a strategy underpinned by its naval blockade of the Black Sea terminals, including Odesa.
“Odesa has three sources of income: the seaports, the wholesale market selling goods coming into the port, and tourists,” said Andrey Stavnitser, chief executive of TransinvestService, a terminal operator at the nearby port of Pivdenny. “All three of them are as dead as possible.”
Before the war Odesa was the pivotal export hub as Ukraine became an agricultural powerhouse, accounting for almost 15 per cent of world grain exports. Its seaports could handle 5 million tonnes of agricultural products per month.
Ukraine’s third largest city with a pre-war population of more than 1 million, Odesa was also one of the country’s main tourist destinations, especially among well-heeled Russians. Hotel televisions still beam channels from Moscow, and the Russian language remains more common than Ukrainian.
Before hostilities broke out the region could count on 4 million annual tourists, including the domestic visitors who came in greater numbers after Russia’s annexation of Crimea in 2014 placed the peninsula largely out of bounds.
Now the bars on the once-popular Derybasivska Street are doing their best to lure in locals but footfall is low. Much of Odesa’s elegant centre, including its famous Potemkin Stairs, is off-limits behind a heavily guarded cordon.
As well as the absent tourists, large numbers of Odesa residents have fled to be replaced by refugees escaping the brutal artillery war in the east of the country. More than 70,000 have officially registered as refugees in the region, but officials say the number may be as high as 400,000.
The war has been a profound shock for a city with deep cultural links to Russia and where officials admit a significant minority of residents initially supported the invasion. But the “catastrophic” war has shattered those illusions, according to Roman Grygoryshyn, head of inward investment and tourism at the regional administration.
He once filled his days hosting online meetings with business leaders and plotted Odesa’s bid to host the Expo 2030 event. Now tasked with securing body armour, he and other Odesans are learning to cope with the huge changes forced by the war. “We have a completely different attitude,” he said.
At a recent donor event in Lugano, Switzerland, Ukraine estimated that the cost to rebuild its economy could be at least $750 billion, although the war, and the counting, are far from over.
Stavnitser from the Pivdenny port said $100 billion worth of goods were stranded due to the blockade, including grains, sunflower oil, iron ore and other materials. Dozens of vessels in Odesa and the surrounding ports have been unable to leave Ukrainian waters. The number will rise as Ukrainian farmers harvest crops that have no easy outlet to global markets.
“It’s a total mess,” said Andrey Sokolov, a partner in Tully Logistics, a local services company that has been helping exporters book space on vessels loading in Danube ports such as Reni, near the Romanian border.
Ukraine’s small Danube ports have ramped up capacity, but cannot match the trade volumes that passed through the larger sea terminals. Russian missile strikes have already halted the railroad to these ports, in Odesa’s south, and are now targeting the road route too.
Industries dependent on foreign raw materials or wholesale goods have also been crippled by the blockade, said Stanislav Novykov, a local official who heads a social policy committee in Ukraine’s parliament.
As many as 40 per cent of local businesses have either partially or fully shut, he said, citing Odesa’s Stalkanat factory, one of eastern Europe’s biggest manufacturers of steel rope and wire, that was operating at just a quarter of capacity. “There’s no confidence that anyone can sell goods, or that they can buy raw materials,” he said. “There’s also a lack of people ... lots have gone to the frontline to defend their country.”
Odesa remains a target for Putin’s missiles and for Russian conquest. The relentless artillery bombardment up the coast in Mykolayiv could be part of Russia’s efforts to push its troops West in an effort to establish a land bridge from Donbas to Transnistria, the Moscow-backed breakaway region of Moldova, military analysts believe. Odesa would stand in the way.
Some in Odesa remain hopeful that the worst will pass — at least for the ports. The recent recapture by Ukraine of Snake Island, a strategic Black Sea outpost, has fuelled hopes that the blockade could be broken. Some shippers hope that talks brokered by Turkey and the UN could pressure Russia into lifting its siege.
Stavnitser said most of the ports could reopen within weeks of any deal even before the mines that guard the coast were cleared. “We know the mines map, we know how to get around them,” he said, adding that “people are eager to work, so it will be easy to get them back”.
But others are sceptical. Even assuming Russia agreed not to fire on merchant ships, which it has in recent months, insurance premiums for commercial transport could be prohibitively expensive if navy vessels continued to menace the surrounding waters.
“Do you want to know how to unblock the ports?” said Oleksandr Sytchenko, a former seaport authority official. “Destroy the Russian fleet. They won’t understand anything else.”
— Copyright The Financial Times Limited 2022
