The Ukraine Recovery Conference is meeting this week in London. A group of 60 nations has gathered to raise funds from the public and private sectors as well as show Russia that Ukraine’s backers are in it for the long haul.
But at the moment, the group is spinning its wheels. While the World Bank estimated last March that Ukraine would need $411 billion to rebuild its infrastructure after 16 months of war, that number has been rising steadily. And it’s believed that no private investment will come until the war is over — not just a truce or a cease-fire, but an assurance that Russia won’t invade again.
In short, the only way that private funds will be forthcoming is if Ukraine wins the war and Russia is somehow prevented from invading again.
“You don’t know how long the war will be there, whether what you invest in will be destroyed the week after. So it’s very challenging,” Odile Renaud-Basso, the president of the European Bank for Reconstruction and Development (EBRD), told reporters in Brussels recently.
With very little private investment expected, the usual suspects are going to have to carry the load. That means you, me, and the rest of the American taxpayer will have to pony up.
That it will be borrowed money is a near-certainty. And the prospects that other large donors will step forward and give till it hurts are dim. After all, Joe Biden is eager to step up and shoulder the burden. As for the rest of us? Not so much.
Next month, NATO members will guarantee a “forever war” by setting out the requirements for Ukraine to join NATO. Membership in NATO is what Russia ostensibly went to war to prevent. Ironically, at the time of the Russian invasion, there was very little chance that Ukraine would have been invited to join the alliance. Indeed, the reasons for rejecting Ukraine’s application — endemic corruption, unstable politics, and a weak judiciary — remain valid today.
But European politics demand that Ukraine be allowed to join the alliance. And the prospect of Vladimir Putin agreeing to a peace deal of any kind would be virtually off the table.
That means more war — and the certainty that the World Bank’s estimate of $411 billion is terribly outdated. In fact, some estimates of how much more will be necessary are as high as $30 billion a month.
“It’s changing every day, this number,” Finance Minister Sergii Marchenko said in an interview. “Russia launches missile attacks, drone attacks. They are trying to destroy our economy, our way of life.”
“We’ll only know the total cost once the war is finished,” said Nadiya Bigun, a deputy minister of the economy.
Dollars and cents are one thing. But the “human capital” that needs to be invested in Ukraine is equally daunting.
But long-term human capital is the key to recovery, Ukraine’s ambassador to the EU, Vsevolod Chentsov, said this week in Brussels, with investment not just in factories, agriculture and IT but in mental health.
A director of the Danish Red Cross, Peter Klanso, told a conference that there were an estimated 9 million people directly impacted by the war, both soldiers and civilians. He said the poor and the marginalized would be “further marginalized” if their voices were not heard. And those on the recovery leadership planning must find a way of reaching them too.
Ukraine is already receiving $42 billion from other nations this year just for “basic spending” — to keep the lights on, so to speak. And despite the ongoing war, there are some things that donors can give right away. Ukraine has a $14 billion “rapid-needs” reconstruction program. They’re about $6 billion short of that, and filling that gap would give immediate help to Ukrainians who have lost everything in the war.
It’s inevitable that the United States will supply the bulk of reconstruction funds whenever the war ends. It’s the reality of having the biggest piggy bank on the block. But that doesn’t mean that the EU and other European entities are going to skate by without paying their fair share. It’s not encouraging that the EU and other NATO countries have contributed only a fraction of what the U.S. has given.
They should be doing a lot more.
