Ukraine is already looking for investments for post-war reconstruction
2023.01.19 06:23
Ukraine is already looking for investments for post-war reconstruction
By Kristina Sobol
Budrigannews.com – In parallel with its efforts to secure more modern arms from its allies, Ukraine has intensified its efforts to secure financial support for the country’s reconstruction from business leaders in Davos.
The United States and its allies have provided weapons worth tens of billions of dollars to Ukraine since Russia invaded the country last year, but Kiev still needs more.
It also wants to ride a wave of Western public support to make sure that promises for its reconstruction, which some estimate will cost up to $1 trillion and won’t start until the war is over, are more than just words.
However, any talk of rebuilding seems premature.
Coordination has already been complicated, according to analysts, due to the mix of donors—from countries to development and international organizations, private sector players, and the possibility of redistribution of seized Russian assets.
Furthermore, actually progress has been burdensome.
With a clear message from President Volodymyr Zelenskiy, Ukraine, which dominated the World Economic Forum’s (WEF) most recent major meeting in May, has once more sent dozens of executives, legislators, and decision makers: Take a vow now, not later.
“We need to plan for tomorrow. Ukraine’s success as a democratic nation is needed by the entire world. It is the best response for both our friends and foes. Vitali Klitschko, the mayor of Kyiv and a former world heavyweight boxing champion, told Reuters that “it’s our responsibility to make it a successful country.”
Last year, Ukraine gave BlackRock (NYSE:), the largest asset manager in the world, to establish a reconstruction fund.
Odile Françoise Renaud-Basso, the President of the European Bank for Reconstruction and Development (EBRD), stated, “The more we do now, the less we will have to do in reconstruction.”
Despite investing 1.7 billion euros ($1.8 billion) in Ukraine’s energy, transportation, and other infrastructure in 2022, the EBRD estimated that the country’s local economy contracted by nearly a third.
The cost of reconstruction and recovery was estimated at $349 billion (322 billion euros) in a joint report released in September by the government of Ukraine, the European Commission, and the World Bank. This figure is increasing as the war drags on.
Yulia Svyrydenko, Ukraine’s First Vice Prime Minister and Minister of Economic Development and Trade, stated that estimates were now closer to $1 trillion, highlighting the difficult task.
The costs of reconstruction rise with each Russian missile that hits critical infrastructure, and investor appetite decreases, particularly in the private sector.
Zelenskiy sees the large number of people at Davos as more than just a symbolic reminder that Ukraine is still afloat and that Russia’s previous dominance of the event is over.
It’s about building momentum and reassuring people that Ukraine is open for business even during the war.
According to Svyrydenko, Davos presented an opportunity to shift focus from strategy to concrete projects.
“We have to find additional tools on how to facilitate Ukraine business development and foreign investment to come to Ukraine even now,” she stated. “Ukraine has shown resilience in war time and business too.”
A person who was present said that Zelenskiy gave a Zoom presentation on Tuesday to executives and clients of BlackRock in Davos. Larry Fink, CEO of BlackRock, stated in Davos that the private sector could assist, adding that he was seeking a “fair and just return.”
Even though BlackRock may present itself as optimistic, there is always the possibility that the war will last for years or that, when it comes to previous post-reconstruction efforts like Afghanistan, Iraq, or the Balkans, pledges and support will not be realized or that money will be wasted due to incompetence and corruption.
Eurasia Group stated in its outlook for 2023, “Tensions will resurface when the time comes to fund Ukraine’s reconstruction – made much more expensive by Russia’s continued attacks on Ukrainian critical infrastructure – but that won’t happen until the war ends, and the war isn’t ending anytime soon.”
An exhibit at Ukraine House in Davos serves as a reminder of the extent of the damage. As Ukraine approaches its one-year anniversary on Feb. 24, the venue is also where the business elite and its closest supporters gather to evaluate the country’s prospects and reiterate that the country cannot afford to lose the war.
Gabrielius Landsbergis, Lithuania’s Foreign Minister, stated, “What Ukraine is doing is to try to get everybody on the starting line for when they are able to start the rebuilding.”
