The World Bank estimates that as a result of the Russian invasion, Ukraine’s GDP will fall by 45 percent in 2022. However, this is only a preliminary, and on top of that, a conservative forecast. For the losses could be much higher, as the war is still ongoing. At the same time, there are pledges from many countries to support the reconstruction process. So how will the revival of the Ukrainian economy take place? And how much should Russia pay for the damage caused in Ukraine? This is one of the topics that was discussed at the past Economic Forum in Karpacz.
All participants in the debate agreed on the fact that in the future it will be mainly Russia that will have to bear the costs of the war caused in Ukraine.
- I believe that it is simple. Western countries have frozen Russian reserves in dollars and euros, so this must be enough to start with,” said Pawel Borys, CEO of the Polish Development Fund.
Finance Minister Magdalena Rzeczkowska recalled estimates that $750 billion would be needed to rebuild the Ukrainian economy at this point. - Poland is ready to continue supporting Ukraine, both in the short and long term, Magdalena Rzeczkowska declared.
At the same time, the Finance Minister noted that aid should reach Ukraine faster.
- The European Union pledges a lot, but not too much has been delivered as quickly as needed. So I think it is important to act faster,” Magdalena Rzeczkowska said.
The Polish minister said that long-term plans would need to be drawn up, also specifying sources of reconstruction funding. Oles Dovgyi, a deputy of the Verkhovna Rada of Ukraine, thanked for the assistance so far and pointed out that reconstruction will have to be spread over years. As an example, he cited the fact that the Ukrainian economy only recently returned to pre-invasion levels in 2014:
It took five years to return to the same level. So we had a lesson in how things should be done. And we must not only count on aid, but also act and be open to private investment from abroad,” said Oles Dovgyi.
According to Pavel Boris, a complication is that we are currently facing two types of war simultaneously:
One war is Russia’s military aggression against Ukraine, the other was triggered by Russia last year. This is a hybrid war against all of Europe, which also generates additional costs,” said Pavel Boris.
In his opinion, Russia cannot win either of these wars, subject to the unity of European countries and the provision of alternative energy sources. He noted that the reconstruction of the Ukrainian economy will be ensured by funding from various sources – both international institutions, countries and private donors.I believe that some countries in Europe are doing too little and too slowly, and I think this should change, the PFR president added.
The Ukrainian guests expressed hope that after the war, Ukraine would be part of the security system of the West, not the East. However, this depends not only on Ukraine, but on other countries and how the situation on the frontline develops:The situation is far from over. There are losses and there will be more. It is difficult to determine anything now, because the situation is changing all the time. Just look at price changes in the energy market or building materials. Now it is necessary to focus on measures that are needed at the moment,” said Mariia Repko, deputy director of the Center for Economic Strategy.
Mihnea Claudiu Drumea, advisor to the Romanian Prime Minister for Ukraine, also took part in the discussion. He referred, among other things, to the concerns expressed by representatives of some countries about whether the funds transferred to Ukraine will be adequately spent.
The European Union has experience in implementing various types of financial tools, so it’s not a problem to control the spending of funds for Ukraine’s reconstruction. So I don’t see this as a problem,” Drumea said. – Following the rules and the rule of law will ensure that the funds go to the people who need them. Ukraine deserves to be together with us and provide a better standard of living for its people.
The guests taking part in the discussion also said, among other things, that the war in Ukraine is also being fought for the freedom of all of Europe. Oles Dovgyi announced that this is not all:
You can see that Ukraine is fighting. We have shown that we are strong and we know how to fight – not only for Ukraine, but also for all of Europe. The second thing is that we are not only fighting an ordinary war, but we will fight for every cent, every penny of your investments,” the deputy of the Verkhovna Rada of Ukraine declared.
Dovgyi also presented a package of legal solutions that have been implemented in Ukraine to fight the influence of oligarchs. He declared that any amount of money donated to the embattled country against Russia would be put to good use.
