May 12, 2022 - World

Ukraine calls for reconstruction plan as war hits stalemate

Data: KSE; Chart: Baidi Wang/Axios

The cost of direct damage to civilian and military infrastructure in Ukraine since the war began totals more than $94 billion, according to an analysis of public sources by the Kyiv School of Economics (KSE).

Why it matters: The sheer scale of destruction is sometimes overshadowed by the media and government's intense focus on territorial gains and human atrocities. The tally is another index of the challenge Ukraine will face to rebound — whenever the shooting stops.

  • Entire cities and towns are virtually uninhabitable.
  • U.S., European and Ukrainian officials have highlighted the need to begin assembling a "Marshall Plan for Ukraine" now, even as the war drags on into a stalemate with no clear end in sight.
  • "The reconstruction of Ukraine must now become the same historical example for our time and for the future as the restoration of European countries after World War II," Ukrainian President Volodymyr Zelensky said during a donors' conference in Warsaw last week.

By the numbers: Direct and indirect losses to Ukraine's economy are estimated to range from $564 billion to $600 billion, according to KSE economists whose analysis was supported by Ukraine's Ministry of Economy.

  • That figure, which is not exhaustive and will grow as the war continues, factors in GDP decline, labor shocks, the suspension of investments and other metrics.
  • The cities that have suffered the most devastating direct losses to housing stock are Mariupol ($9.9 billion), Kharkiv ($7.1 billion) and Chernihiv ($4.2 billion), according to the analysis.
  • Russia's attacks have taken a massive toll on civilian infrastructure: The analysis indicates at least 992 educational institutions, 508 health care facilities, 102 religious buildings, 27 oil depots and 12 civilian airports have been damaged or seized by Russian forces.

The big picture: The G7 has provided or pledged more than $24 billion in financial support for Ukraine since the war began — so far, a drop in the bucket of the $600 billion or so the European Commission estimates Ukraine will need for reconstruction.

  • The EU and international institutions like the World Bank are expected to play a major role in financing the massive recovery effort.
  • Zelensky has called on foreign partners to "take patronage" over specific regions or industries ravaged by the war.
  • He called the recovery plan "an investment in the stability of the whole of Central and Eastern Europe" that will strengthen post-war Ukraine's ties with the "free world."

Between the lines: The Biden administration and European capitals are considering using frozen Russian government or oligarch assets to help fund the recovery.

  • Legal hurdles may pose a challenge to that effort.
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