In Kiev's small shops, even Valentine sales fall on hard times

Swamped by protest tents, stores on what used to be prime turf are struggling. Protesters could at least buy a cappuccino, laments one merchant.

Inside a small store tucked into a shopping center in Kiev's Independence Square, an overwhelming cascade of Valentine's Day streamers and balloons hangs from the ceiling, caught in the glare of fluorescent lights. The semi-subterranean shop, "Fun and Cool," is located on what used to be a prime piece of mall real estate: just off the city's main Independence Square.

But since the start of antigovernment protests there in late November, the Fun and Cool's location in the Globus shopping complex has become more of a liability than an asset. The store, which specializes in seasonal gift items, has sold about half the stock it usually does, according to Alina Igorova, a store clerk. And during January, usually a festive month of New Year and Orthodox Christmas celebrations, Kiev's main shopping hub did not even sport a proper Christmas tree, laments fellow clerk Tatiana Nikolaeva.

Instead, makeshift barricades of ice, snow, and debris now block glass doors that should open up to a panoramic view of the iconic square, known as Maidan. The area hosts a sea of tents, and an overpowering smell of wood smoke from protesters' encampments hangs in the air, she says. 

"No one comes anymore. Everyone thinks all the shops inside are closed, and then others are scared off by the revolution that's going on outside," she says.

The drop in business has occurred up and down Khreshatik street, a main thoroughfare that bisects the square. Even magnets with pictures of recent protests on Maidan haven't been selling, according to several kiosk owners.

Sasha Andreevsky sells coffee from a giant magenta kiosk in the shape of a snail, right by the metro.

"Before Maidan, there were a lot more people. Foreigners and everyday people came to walk in this area: It's the most popular street in Kiev," says Mr. Andreevsky, who's been working at this location for two years.

"Now, look around, everything's singed, the smoke reeks," he says gesturing to a set of barricades and tents in the middle of the street. "The protesters just sit in their tents all day and drink their instant coffee," Andreevsky says.

Antigovernment protesters have been camped out on Khreshatik street for more than two months, since Ukrainian President Viktor Yanukovich walked away from an association agreement with the European Union in favor of a $15 billion bailout package from Russia. According to analysts, Mr. Yanukovych's eastern pivot allowed him to bow out of dealing with European Union demands that would have forced Ukraine to tackle its mounting corruption problems.

Andreevsky says he's less concerned with the details of the political situation than its impact on his business. Before protests on Maidan started, Andrevsky estimates that he made about 1,000 hryvnia in three hours (around $100). Now, he says, he makes about 300 ($34). 

The long view

However, the stuttering state of business around the square might not be the best indicator of the economic state of Ukraine right now, says Dmitry Garny, the head of Kiev Business Center. He doesn't anticipate that a slew of businesses will fold in Kiev, provided that Ukraine's political crisis is resolved in the next few months.

And in the long run, some say, the antigovernment protests will help make the Ukrainian economy stronger.

Over the past decade, the outlook for small businesses has been getting worse each year, says Andrey Novak, an economist and the leader of the Committee of Ukrainian Economists.

"You can't say that it's EuroMaidan that created the crisis," Mr. Novak explains. Small and medium-sized businesses have been facing increasingly unfavorable circumstances, he says, pointing to rampant corruption in the government and poor economic management. Some businesses have even stopped paying taxes, because it's understood that money gets filtered through a corrupt system, he says.

Aleksandr Sugonyako, president of the Association of Ukrainian Banks, agrees. "In the past four years, the government hasn't really done anything for economic development."

That appears to resonate with at least one shopkeeper from the outskirts of Kiev. Vitaly Kozlov comes once or twice a week to support the protests on Maidan.

"There needs to be a total change of power before things will really" get better in the country, Mr. Kozlov says as he stands in front of a collection of Yanukovych caricatures. While he certainly feels the economic stress of the protests in his own business, Kozlov says that moving away from Russia might mean rocky economic times at first, but the change is worth it in the long run.

If the protests bring someone new into power who can get rid of the corruption under Yanukovych, he says, things will be different for Ukraine – even if it means that fewer Valentines and cappuccinos are sold this February.