The politics of Ukrainian reconstruction
When fighting subsides, Ukraine may undergo reconstruction on the scale of the post-World War II Marshall Plan. Debate is ramping up about core issues, such as the scope of reconstruction, sources of funding and reforms needed for success. Ukraine and the West might begin now to forge consensus on these issues.
Scope of reconstruction. Divergencies in investment priorities may be wide. As of Sept. 5, the respected Kyiv School of Economics assessed damage to infrastructure to be$114.5 billion. On Sept. 9, the World Bank, European Commission and Ukraine estimated the cost of reconstruction and recovery to be $349 billion. On Oct. 24, Ukrainian Prime Minister Denys Shmyhal put the cost of post-war national reconstruction at nearly $750 billion.
German Chancellor Olaf Scholtz and European Commission President Ursula von der Leyen have urged a “new Marshall Plan” to construct residences, schools, roads, bridges and other infrastructure. By comparison, the Marshall Plan was less grandiose, contributing $150-160 billion in today’s dollars to 16 countries. It sought to spur agricultural and industrial production and trade and restore sound finances.
In Ukraine, high priority may be accorded to restoring electricity and other public utilities, rebuilding transportation and other infrastructure, and renovating industry, agriculture and services. Ukraine has had one of Europe’s most wasteful economies; reconstruction will give higher priority to conservation.
The West might give early attention to defining a scope for reconstruction that can gain broad support. Expectations in Ukraine might be high. In Congress, some on both sides of the aisle may seek to limi
Sources of funding. No one wants punitive reparations of the kind that embittered post-World War I Germany and abetted the rise of Adolf Hitler. The Treaty of Versailles demanded that Germany pay $269 billion in today’s dollars, leading economist John Maynard Keynes to predict its economic collapse and wider chaos.
There is precedent for forfeiture. In 2003, the United Nations Security Council required all U.N. members to freeze and transfer assets of the former Iraqi regime to the new Development Fund for Iraq. Recently the U.N. General Assembly approved a resolution calling for Russia to pay war reparations. The vote was 94 in favor, 14 against and 73 abstaining. The use of Russian assets may be popular in the West and seen as just recompense. Ukrainian President Volodymyr Zelensky calls creation of such a mechanism a part of “international legal reality.”