A World Bank report has estimated that it will cost Ukraine at least US$411 billion over the next ten years to recover and rebuild from the Russian invasion, which would be 2.6 times the country’s Gross Domestic Product by 2022.
The report released Wednesday assures that the estimates “should be considered as minimums, as the needs will continue to increase as long as the war continues,” which assumes that, over time, the estimated value will increase.
Produced jointly by the Ukrainian government, the World Bank, the European Commission, and the United Nations, this valuation marked a significant increase from the US$349 billion estimated in a report released by the Bank in September, which is in addition to US$180 billion already sent to date.
The scale of this assistance is unprecedented.
The last time another country had been helped this much in a war was during World War II when President Harry Truman approved the “Marshall Plan,” which earmarked US$13 billion over four years (eventually extended to 10) to send money to Europe so it could rebuild.
In 2023 dollars, the Marshall Plan cost an equivalent of US$173 billion, much less than what NATO spent to help Ukraine in just one year of the war.
Then, US fiscal assistance was more targeted and less hesitant than the European response due to the lesser degree of exposure of its energy system to Russian supplies.
The bulk of the disbursements to Ukraine occurred in the first four months of the war and became relevant between November and December last year, under the idea that Russia was about to be defeated.
According to the World Bank, Russia’s invasion has undone 15 years of economic progress in Ukraine, reducing its domestic product by 29% and pushing 1.7 million Ukrainians into poverty.
The report details some economic and human costs of the Russian-initiated war of aggression, including nearly 2 million damaged homes, more than one in five damaged public health institutions, 650 damaged or stolen ambulances, and at least 9,655 confirmed civilians killed, including 461 children.
The report estimates US$135 billion in direct damage to buildings and infrastructure so far, not counting the broader economic consequences of the conflict, now more than a year old.
Emergency personnel work at the site where a Russian attack in Dnipro severely damaged a residential building (Photo internet reproduction)
The report estimates that, of the US$411 billion, Kyiv will require US$14 billion for critical and priority reconstruction and recovery investments in 2023 alone.
Ukraine’s reconstruction “will take several years,” World Bank Vice President for Europe and Central Asia Anna Bjerde said Wednesday, praising Ukraine’s resilience and determination for addressing urgent recovery and reconstruction needs.
Despite Russia’s attack, Ukraine continues to maintain essential public services, including keeping schools and hospitals open, paying teachers and civil servants salaries, and paying pensions, the World Bank said in February.
The report said it was essential to maintain Ukraine’s government, private business sector, and recovery efforts.
If Ukraine postpones reconstruction, it risks the country “settling into a situation of low or no growth and facing enormous social challenges once the war ends,” the bank remarked.
“Supporting these critical services remains a priority, and Ukraine needs around US$3-4 billion per month to sustain them,” Bjerde wrote.
“Continued support for Ukraine is an investment in the country and the global economy. Development partners’ support for public investment must be complemented by significant private investment to increase the financing available for reconstruction,” the vice president noted.
However, Bjerde also stated that the damage could have been even worse if not for the defense of the Ukrainian forces, which have successfully sustained most of the destruction in the frontline regions of Donetsk, Kharkiv, Luhansk, and Kherson.
On Tuesday, the International Monetary Fund claimed it reached a staff-level agreement with Ukraine for a four-year financing package worth about US$15.6 billion.
Ukraine’s energy sector has seen the greatest increase in damage recently due to Russia’s targeted attacks on the power grid and other energy centers over the winter to freeze the Ukrainian population and leadership in Kyiv into submission.
In this regard, the total damage to the energy sector is now five times greater than last summer, the World Bank said.
“Energy infrastructure, housing, critical infrastructure, economy, and humanitarian demining are our five priorities for this year,” Ukrainian Prime Minister Denys Shmyhal said in a statement on Wednesday.
Shmyhal also warned that “the amount of damage and recovery needs currently do not include data on the loss of infrastructure, housing and businesses in the occupied territories”; and noted that Ukrainian authorities would begin restoration work in these territories when they are liberated.
With information from Derecha Diario