In July 2022, in Lugano, Switzerland, Ukraine presented to potential donors a ten-year reconstruction plan for $750 billion. Then in October, in Berlin, it was about urgent needs and a smaller amount. “Ukraine cannot manage it alone.

The European Union cannot manage it alone either. It can only be achieved by the entire global community, which is now lending its support to Ukraine,” stressed German Chancellor Olaf Scholz.

At the conference President Volodymyr Zelensky announced the creation of a $17 billion Fast Recovery Plan. Ukraine’s budget deficit is running at $38 billion and the plan would cover $17 billion. The purpose of the Fast Recovery Plan is to pay for the urgent reconstruction of the most critical facilities, such as transport, energy infrastructure, schools, and hospitals.

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At the international expert conference on reconstruction, EU Commission President Ursula von der Leyen assured Ukraine of long-term assistance: “One should be careful about making historical comparisons, but this amounts to no less than the creation of a new Marshall Plan for the 21st century. It is a task that will take generations and must begin now.”

A plan for the Recovery of Ukraine should become a new plan for the 21st century and a challenge that generations will work on. We are talking about decades, and not merely reconstruction to pre-war levels. We are talking about a new leap for Ukraine – in terms of a Green Deal, modernization, digitalization, modern solutions and European standards.

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The original Marshall Plan did not just rebuild countries, it stopped the spread of communism in Europe and started the process of integration – the EU. Expectations for the new Marshall Plan for our country should be nothing less. After all, the result of restoration and reform in Ukraine should be membership in the EU.

EU experts say it is likely that a high-profile American or Briton will be appointed as coordinator between the G7 and Ukraine. Perhaps the former UK Prime Minister Boris Johnson? In this way, between the EU platform and an American/British coordinator, a global coalition aimed at the restoration of Ukraine can be achieved.

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The coordinator will engage experts from the European Commission and create a position of inspector general with broad powers to oversee the funding flows and opportunities to investigate corruption allegations.

At the initial stage of the platform, a transparent system of accountability for ongoing reconstruction is being developed to prevent corruption. In the future, the entire recovery process is expected to come under the control of the European Commission.

After all, Ukraine’s integration into the EU should go hand in hand with reconstruction and the implementation of reforms. Donor countries must maintain control over their funds for the reconstruction of Ukraine. This is necessary to ensure transparency and accountability.

The Fast Recovery Plan is crucial. Only in the territory of the five de-occupied regions (Zhytomyr, Kyiv, Chernihiv, Sumy and Kharkiv), 54,523 objects were damaged or destroyed as a result of Russian actions. Only 5% were restored at the expense of the government.

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The format would entail regular meetings of the G7, foreign partners, and representatives of international financial organizations, including the World Bank, the International Monetary Fund, and the European Bank for Reconstruction and Development.

The aim is to coordinate aid, determine priorities, sources, and finance mechanisms, while seeking investments and taking into account the introduction of war risk insurance. The Multilateral Investment Guarantee Agency has already allocated $30 million to Ukraine for the implementation of the pilot project on investment insurance.

A month ago, the president’s office announced the creation of the Fund for the Recovery of Ukraine as the main financial instrument. Among the main risks related to the activities of the Recovery Fund are the following:

  • Political dependence. Despite the establishment of a supervisory board with 75 percent of donor representatives, key issues are decided by the Cabinet of Ministers;
  • Lack of coordination function;
  • The possibility of informal influence on local self-government bodies, which are deprived of the right to independently submit projects for financing;
  • Lack of transparent and public procedures for determining contractors;
  • Non-systematic point solutions without defining the key issues of restoration, for example, selection of projects for financing, approval and implementation of the reconstruction plan.

The Fast Recovery Plan announced by Zelensky is more understandable to donors, noted Werner Heuer, head of the European Investment Bank. “Schools, hospitals, energy, transport – this is a bankable story.” However, none of the international donors confirmed their willingness to finance this plan, and the money is not available as yet. Should we count on the confiscated assets of the Russian Federation? Not in the near future, because they need to not only be frozen, but also confiscated, and this is a very complicated legal procedure.

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However, concentration on the tasks of the ongoing reconstruction of Ukraine will be on the agenda of both the government and donors for a year or two, even after the end of the war. Everyone wants to be a part of the Marshall Plan, because it is about development, but that is only the third stage. Ukraine is currently in the first stage – life during war under martial law.

Even after the end of the war, the government and economy will need time to adjust to a peaceful format. The third international event for Ukraine – after Lugano and Berlin – will be the recovery conference, which will take place in 2023 in London. By that time, it is expected that reconstruction mechanisms will already be worked out and will operate in practice in Ukraine. We need to not only win the war, but start reforming and rebuilding the country.

The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post.

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