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Reconstruction at a time of war
How to help Ukraine win and recover
Residents of a tower block badly damaged by Russian drone attacks 30th May 2023
Today Ukraine is associated with Russian invaders, the shocking cruelty of Russian war crimes, and brave resistance by the Ukrainian people. However, few ask what this resistance means and what it costs our society.
Through all possible means, through all channels and sources, the Ukrainian government, volunteers, and citizens are asking the world for weapons because it is the only way to defend ourselves and defeat Russia. At the same time, this war has brought destruction to civilian infrastructure, critical infrastructure (energy, bridges, roads, distribution systems, water supply, etc.), and humanitarian infrastructure. It is no coincidence that, contrary to all established norms and rules of international humanitarian law, Russia has chosen the Ukrainian civilian population as the target and terror as the instrument.
In October 2022, the nature of the war changed radically. After the successful liberation of the Kharkiv region and Kherson by the Ukrainian military, it became evident to the Russians that they could not win on the battlefield. Therefore, the destruction of the population's resistance and the stability of the home loop front became the hallmark of the second phase. As of the 445th day of the full-scale invasion and 9 years of conflict in Crimea and Donbas, a significant portion of Ukrainian territory is mined (around 17,500 square kilometers, which is one of the highest rates in the world), and the losses of energy infrastructure are estimated at $11 billion, according to the World Bank, including approximately 25 generation facilities that have been affected. The total cost of post-conflict recovery, according to the World Bank's estimates, has risen to $411 billion. And this figure continues to rise due to daily shelling and missile attacks on Ukrainian cities and industrial infrastructure.
One of the key prerequisites for effective resistance and victory over Russia is support for the war economy and an effective social-humanitarian aid system for the population of Ukraine. So, for a complete assessment of the situation, it is necessary to consider the key economic, humanitarian, and societal challenges that the Ukrainian people and government face. Both in the controlled territories of Ukraine and the occupied territories.
The wartime economy
According to government estimates, the national economy has fallen by around a third over the past 14 months of war, with irreversible losses in industry exceeding 30 percent. Losses in different sectors of the economy vary. For example, the mining and metallurgical sector lost two large metallurgical plants in Mariupol as a result of Russian occupation. It has also seen the destruction and the closure of seaports through which products were exported. As of the end of 2022, both production and exports had fallen by 70 percent.
According to the Kyiv School of Economics, in 2022, at least 109 large and medium-sized enterprises suffered direct losses. While there are different estimates of the cost, experts agree that the total direct and indirect losses are around $600 billion, of which about $138 billion is due to the destruction of infrastructure and production facilities.
Despite constant shelling, threats, and disruptions to the supply of electricity and other essential resources for production, Ukrainian businesses continue to function and seek ways to survive in extremely difficult conditions. The situation is made worse by the state's limited ability to support the viability of Ukrainian businesses. The state budget is more dependent than ever on external aid and focused on covering urgent needs and tasks: security, social support for vulnerable groups, support for internally displaced persons, restoration of critical infrastructure, and humanitarian issues. The World Bank will provide directly grant programs and subsidized loans to support national businesses at a cost of $2.7 billion for 2023 alone.
The situation has been greatly complicated by serious challenges in getting goods to and from Ukraine. In some strategic sectors, such as the export of agricultural products, this has raised questions about international food security. The increased cost and duration of logistics have also affected the pricing policies and competitiveness of Ukrainian goods in the markets.
In fact, the only relief for Ukrainian producers and their survival prospects lies in the possibility of access to European markets and logistics through the EU's decision to allow duty-free and unimpeded border crossings.
At the same time, amidst the challenges faced by Ukrainian businesses, the reaction of some European neighboring countries' businesses (especially in Poland, Bulgaria, Romania, and Hungary) has caused serious disappointment. They have essentially blocked the crossing of their borders to Ukrainian agro-industrial products through protests and strikes. A temporary solution to the problem has been found, but the situation remains unstable and unpredictable. Often, this is the result of either internal political struggles or narrow self-interest.
Unfortunately, not everyone understands that gaining advantages at the expense of the difficult situation of Ukrainian businesses now may lead to serious negative consequences for the entire region tomorrow, including from a security perspective. It is difficult to imagine success in the military confrontation with Russia without a functioning Ukrainian economy.
The continuation of economic activity during the war is a prerequisite for maintaining social stability, and military operations. The support of small and medium-sized businesses requires urgent attention from international partners and donors.
Environmental safety and threats
In a situation where the country is under daily shelling and people are dying, the issue of preserving the environment seems secondary. However, this is not just a national challenge. In reality, we are all sitting on a big powder keg which could blow up the environmental safety of Europe. The largest nuclear power plant in Europe is currently occupied by the Russians.
The occupiers have installed fortifications on at least three reactors of the Zaporizhzhya Nuclear Power Plant and are trying to integrate them into tactical defense planning while suspending the operation of the reactors. Ukraine continues to supply energy to maintain the operation of all systems and avoid a nuclear catastrophe. It is also avoiding military operations in the area, even though the enemy uses this facility to attack Ukrainian positions.
The situation at the Zaporizhzhya Nuclear Power Plant is absolutely uncontrolled and complex. The risk is not only posed by the reactors themselves, but also by the storage of nuclear fuel waste on the station's territory. This fuel could pose the biggest environmental threat. The lack of response from the Russian side to the demands of both the international community and the IAEA (International Atomic Energy Agency) means we are powerless to prevent it.
The war itself has turned Ukraine into a minefield. According to the World Bank's estimates, de-mining in Ukraine will take more than 10 years and over $36 billion. Even now, de-mining specialists work under fire in the front-line areas. They are targets for the Russians, with nine specialists killed in the Kherson region in the last month alone. The effectiveness of the de-mining process requires not only the involvement of significant amounts of specialized equipment but also the use of advanced technologies for studying territories and objects to be cleared.
Significant amounts of military scrap and waste, both on the liberated territories and those still occupied, as well as contaminated soil and groundwater, will pose a challenge in the next stage immediately after the end of hostilities.
In general, Ukraine is working on a systemic fix for all the damage done to the environment. As of now, national investigations are underway for over 100 cases of the crime of ecocide. According to recent estimates by the Ministry for Environment the level of damage has already exceeded $46 billion.
Social and humanitarian challenges
This war is characterized by particular cruelty towards the civilian population of Ukraine. In just the past year 10,000 civilians, including 480 children, have been killed, with an even greater number injured. Ukrainian civilians are the main targets of the Russian invasion. The strategy is to undermine all systems of livelihood and plunge Ukraine into a humanitarian crisis.
According to recent data from the UNDP (United Nations Development Programme), 90% of Ukraine's population is at risk of poverty, and the country's economic development has been set back by at least 18 years. The overall poverty rate for 2022 has risen from 5.5% to 24.1%.
Other indicators within the country show a negative trend: rising prices, stagnant wages, and the depreciation of the national currency have led to a decrease in purchasing power. Overall, the cost of living in Ukraine has significantly increased.
As a result of Russia's invasion, around 5.5 million people are internally displaced, and approximately 8 million have been forced to temporarily leave the country. It is important to note that while the majority of these people are women, children, and the elderly, this figure seriously affects the structure of human capital in Ukraine. While this may be an accepted situation today, when the war ends, the return of these people home will become one of the most important and challenging tasks for the Ukrainian government.
Today, the key task remains stabilizing the lives of civilians and ensuring access to necessary humanitarian needs such as housing, healthcare, education, energy supply, water supply, communication, and food for all.
All of this is happening in parallel with the restoration of civilian infrastructure, the destruction of which has surpassed 100,000 structures, including residential buildings, kindergartens, schools, hospitals, and water and power networks.
At the same time, according to the latest large-scale survey of Ukrainians, 93% are confident in Ukraine's victory over Russia, and 72% don’t see negotiations with Russia as "an efficient way to achieve peace, which should be used right now". Despite all attempts to undermine the moral spirit and endurance of Ukrainian society, Russia has not only failed, but the war has mobilized the population and united them around a single idea and goal of defending the country and defeating the aggressor state.
Justice and reparations
The Russian war in Ukraine is one of the most extensively documented wars in modern history. Since the first days of the annexation of Crimea and up to the present, Ukrainian law enforcement agencies, human rights organizations, and numerous international initiatives have been recording Russian war crimes. Under the leadership of the Prosecutor General's Office of Ukraine, over 80,000 crimes are currently being investigated. The International Criminal Court has also initiated proceedings, including on the forced deportation of children from Ukraine by the Russian authorities.
At the same time, the key challenge remains the issue of holding the highest leadership and command of Russia accountable for committing the most serious international crime - the crime of aggression.
The vacuum in the international legal system does not allow the ICC, within its existing jurisdiction, to investigate this matter, as neither Ukraine nor Russia has ratified the Rome Statute and the Kampala Amendments on the crime of aggression.
Thus, the only legal mechanism is the creation of a special tribunal for the crimes of aggression by Russian high-ranking officials. A mandatory condition for overcoming so-called “functional immunity” is the establishment of an international tribunal based on a multilateral international agreement and confirmed by a decision of an international organization, in particular, the United Nations General Assembly.
There are many discussions, including political ones, surrounding Ukraine's demand for this. Some influential countries among Ukraine's allies see some ambiguity in this precedent based on the experience of previous international conflicts. At the same time, Ukraine has already gathered more than 35 countries in its coalition to establish a special tribunal, and according to the latest polls, punishment for Putin's aggression and his entourage is the key expectation and an essential component of victory for most Ukrainians.
Considering the significant losses caused by the loss of housing, health, torture, sexual violence, forced labor, and many other criminal acts, the international community will have to address questions around how to support the rehabilitation of Ukraine. Ahead of us is the need to help millions of people recover their lives.
The likelihood of voluntary payments from Russia is doubtful, but considering the volume of frozen assets around the world, both sovereign and private sector, that are inseparably linked to the regime, the possibility of their confiscation for the benefit of a reparations fund needs to be considered. From a legal point of view, this would be an unprecedented decision, but in the context of the same UN resolutions and international instruments of influence on countries that pose a threat to global security, it is possible.
The goal here is not just reparations, but a preventative approach that demonstrates to other potential aggressors the seriousness of the international community's intentions to maintain the security and stability of the fragile, but existing, world order.
Liberation and Reconstruction
This is the formula for stabilization and strengthening of the Ukrainian state. Of course, it is difficult to predict the course of the war, let alone the conditions for its conclusion. However, from the experience of this conflict over the past 9 years and other wars that Russia initiated in the region, there can be no confidence in long-term peace without a military victory for Ukraine.
The liberation of Ukrainian territories is not just a matter of the international principle of sovereignty and territorial integrity of the country; it is a matter of saving people in the occupied territories and preventing Russia from destabilizing the country from within in the mid-term.
The presence of such intentions is clearly confirmed by the systematic illegal actions of the Russian Federation, such as the forced passportization of the population in the occupied territories, forced resettlement and settlement of Russians to the territory of Ukraine (Crimea is a vivid example), complete blocking and prohibition of Ukrainian media, publications, etc., and the introduction of Russian jurisdiction and currency. Through all these actions, Russia is preparing to form an artificial argument that the majority of Russian citizens de facto live in the territories occupied by them in Ukraine. They are building this argument by granting a special status to these territories or holding votes, where “work” has been done in advance to intimidate and purge the Ukrainian population there.
The recently adopted Putin's decree on the forced deportation of Ukrainian citizens who do not receive a permanent residence permit within the next six months and a Russian passport within a year is yet another example.
Moreover, these actions also call into question the preservation of property by Ukrainians in these territories. Evidently, through these procedures, Russia is also building a database of Ukrainians for forced conscription into the Russian army.
All of this is an endless, brutal chain of gross violations of all possible norms and requirements of international law. These processes have deadlines and are already underway. And this is not even mentioning the constant threats to life and health in the occupied territories, lawlessness, and systemic crimes against the sexual freedom and physical health of Ukrainians. We also should remember the constant destruction of cultural and educational heritage, all signs, symbols, and reminders of the existence of the Ukrainian nation in these territories. In other words, all signs of genocide that are happening there right now.
That is why, no matter how much some countries may want to sit Ukraine down at the negotiating table with Russia, it is impossible now. Negotiations without clear Ukrainian military advantage, just aiming to achieve ceasefire will only lead to a repeat of the invasion later and further weaken the country. They will leave European regional security without a strong and important outpost deterring Russia's massive appetites, which have not disappeared or changed even now.
The sequence of success for the coalition of allies and Ukrainian victory is achieving military superiority, deliberating Ukrainians from the occupier, and fully restoring control over the borders. Simultaneously supporting the Ukrainian population and the country’s livelihood is critical for victory and future recovery.
Ukraine needs cooperation now
At four in the morning, I wake up in my apartment in Kyiv to the sound of yet another round of explosions - Russia has once again struck Ukraine. 50 rockets, most of which were successfully destroyed by our air defence system. This demonstrates the effectiveness of the strategy of international support for the defense of Ukrainian airspace and the Ukrainian population from Russian attacks. Nevertheless, people continue to die - in Dnipro, the Russians struck a civilian facility - a polyclinic. More than 20 people were injured, and there are fatalities. This means that we must continue to support and strengthen the defense of all cities in Ukraine. The safety of the sky is the foundation for the continuation of the country's life and the immediate restoration of critical infrastructure.
Despite sleepless nights, constant terror, and Russian attacks, Ukrainians continue to work for victory and to live. Ukraine is our home, and the aggressor will not force us to leave it. However, we cannot do it alone - the challenge is too great, the opponent is very serious, and shows no signs of stopping.
Therefore, support must be not just symbolic, but very practical. Bold and comprehensive cooperation - not after the war, but here and now, in all areas where possible. And this is not just about foreign governments, but also about private business and international financial structures.
Sanctions policy must continue. Russia is continuing to expand its military capabilities and increase funding for the war. In 2023, Russia will spend 29 trillion rubles or $362 billion from the federal budget. A record 9.4 trillion rubles are allocated for the army and law enforcement, which is 60% more than in 2021.
The only way to stop these trends is to reduce the state budget revenues and limit the access of the military machine to technology, components, and critical materials. Hundreds of large Western companies continue to operate in Russia, generating profits and paying taxes to the Russian budget, thereby indirectly financing the war in Ukraine. Pragmatic interests are understandable, but the global threat posed by the Russian state today is not just a problem for Ukraine or the region, it is a threat to stability, including economic stability, throughout the world.
If not from an ethical standpoint, then at least in terms of maintaining market stability, global companies must make a clear choice. Russia has found ways to bypass restrictions through its partners. For example, semiconductor exports to Russia from Turkey, Armenia, Kyrgyzstan, Kazakhstan, and Serbia have increased many times over. None of these countries produce microchips.
It is obvious that such practices undermine the effectiveness of the existing sanctions regime. Ways must be found to influence such actions by third countries to prevent this from happening.
In just a few weeks, the conference on the restoration of Ukraine will begin in London. And one of the main tasks of this conference will be to come up with a specific comprehensive plan for Ukraine that will ensure equal development of regions, immediate plans for the restoration of energy and critical infrastructure, support for business, and a clear plan for financial support
Today, Ukraine's economy, as well as our people and soldiers, is bleeding. The task of the conference is to stop the bleeding and heal the serious wounds before they become deadly for the country's livelihood.
The "Immediate Recovery Plan should be a strategy for building resilience in Ukraine, as a bastion of security, and ensure an irreversible victory.
On regional development, international patronage programs have proven to be the most effective - when specific governments take systemic patronage of the region's recovery and development. One successful example of this patronage in action is Mykolaiv and Denmark. Other Ukrainian cities should leave the conference with similar, practical commitments from other governments.
International businesses should express their readiness to implement projects in cities jointly with Ukrainian producers and companies.
Today, Ukraine requires not just aid, but specific cooperation on mutually beneficial terms, taking into account the urgent need to build a resilient state.
Of course, there is another important aspect to this cooperation - Ukraine's efforts to implement anti-corruption policies and ensure the effective functioning of the rule of law. Ukraine itself is interested in the success of these reforms, as they are not only a prerequisite for trust and active investment in post-war reconstruction, but also an integral component of the country's successful European integration.
The shocking and unpleasant facts of corruption uncovered within the walls of the Supreme Court in recent weeks, or in the Ministry of Defense earlier, show there is still a painful path to establishing transparent rules and appopriate punishment. The fact that such cases are being investigated and made public during the war is evidence of the legal system moving in the right direction.
External pressure from donors regarding the implementation of effective transparency and financial control practices in the future architecture of the country is also crucial. Today, the government has announced the creation of a special digital platform to manage these processes, which is designed to eliminate the possibility of abuse and ensure transparency of stakeholder participation in future projects. The urgent process of rebuilding critical infrastructure should become a showcase for Ukraine’s ability to meet international and domestic expectations. Ukrainian society's demand for transparency and equality of rules is obvious, and the higher the price of future victory for Ukrainians, the stronger the internal expectations of the government and international partners will be.
Credible plans for recovery and reconstruction are not just about meeting the great humanitarian, environmental, social, and economic challenges resulting from the war, but a vital part of the war effort, confirming the resilience of the people and preparing for a better future once the Russians have been defeated and withdrawn from Ukraine’s sovereign territory.