Quite rightly, when it comes to the post-war reconstruction of Ukraine, it is emphasised that such a restoration should take place with the help and support of international financial institutions, leading democracies, public and private funds. Examples of post-war support of countries by the world community are already known. One most often refers to the Marshall Plan, a program for rebuilding the (Western) European economy after World War II.
Today, a model is being sought to help Ukraine, which has suffered and continue to suffer from russian aggression. The implementation of this model should accelerate the recovery and strengthening of the new European country. Ukraine needs to form and implement a new socio-economic structure and infrastructure. At the same time, it is not really about a "simple" reconstruction of regions, cities and villages that have suffered and are experiencing destruction and devastation, but about creating a modern "smart" and safe living environment.
In the context of historical comparisons. The success of the Marshall Plan to rebuild post-war Europe is undeniable. Meanwhile, the complexity of today's conditions and requirements for the reconstruction of Ukraine creates new challenges, the directions of counteraction of which have no precedent yet.
(1). The Marshall Plan was developed and started to be implemented a few years after the end of the war — in an actually peaceful, albeit devastated, Europe. Moreover, this plan turned out to be a significantly adjusted version of the previous Morgenthau Plan, i.e. it took more than two years to find and work out the desired implementation mechanisms.
In contrast, Ukraine cannot wait until the end of the war, which, according to many experts, could last for years. Therefore, the Marshall Plan for Ukraine (MPU), if its idea is understood and implemented, should be developed and implemented by taking into account not only the needs of peaceful building of new Ukraine, but also the tasks of the current military countering the aggressor. Undoubtedly, this significantly expands the MPU content and resource requirements.
The events in Ukraine also highlighted the shameful practice of russian troops — artillery and aviation bombardment of civilian targets (including kindergartens, schools, hospitals), critical infrastructure. The targeted protection of civilian targets and critical infrastructure requires significant additional resources, which are not essential in the absence of high risks of military attacks. However, the high risk of attacks has a significant negative impact on the readiness of "donors" for funding.
(2). Although Europe was severely damaged during World War II and a lot of its buildings and infrastructure were destroyed, it was possible to maintain their post-war reconstruction in a consistent and targeted way. Moreover, the Morgenthau Plan included the prevention of the restoration of the militaristic power of Germany. Thus, the peaceful reconstruction of Western Europe in the post-war years was sufficiently guaranteed by US military capabilities.
For Ukraine, as indicated, the risks of aggressive attacks by russia remain high even for remote (from russia) regions, and therefore the reconstruction strategy should be based not on a peace-based strategy, but on a security-based strategy. An important component of the PMU should be strengthening the civilian environment defense and security structures.
To do this, first of all, a sign of a rebuilt Ukraine will be a network of military bases with the participation of foreign partners (this is currently prohibited by law, but will be easily adjusted) and training centers with foreign instructors. At the same time, the goal will be to "combine" regional centers and important infrastructure facilities (nuclear power plants, airports, railway hubs) with relevant (albeit remote) security and military bases and centers. Secondly, this "combination" will be provided by the formation of a modern communication network (by taking into account the capabilities of secure and satellite Internet, including Starlink).
This combination of civilian and security structures has another significant advantage. Experience in the deployment and operation of military-oriented facilities indicates that the investment attractiveness (for both national and international investors) of the respective regions, even in the presence of external risks, significantly increases, since the risk of aggressor attacks diminishes in areas, which are additionally protected by foreign presence.
(3). The Marshall Plan was also aimed at developing market institutions, which included, on the one hand, promoting labour productivity and creating competitive industries (including the ones based on the strong industrial traditions of Western Europe), and on the other hand, reducing economic isolation, strengthening foreign economic relations, weakening of interstate barriers, which expanded and accelerated trade processes in Western Europe (and became a prerequisite for the formation of the first post-war integration associations).
It should be noted that after the war all countries were (almost equally) weakened, and in some cases even poor, and the reconstruction process had to start from scratch. In the case of Ukraine, it will start the process of reconstruction in the environment of developed and successful emerging countries of Europe.
Today the country already has a well-developed economic integration base — a free trade zone with the EU. The expected approval of Ukraine as a candidate for the EU membership also creates a strong political foundation. This will, on the one hand, gain access to funding, industrial and scientific potential of leading European countries. On the other hand, it will promote the inclusion of Ukrainian producers in value-added chains and networks, which will also expand domestic employment markets, strengthen the new basis of socio-economic integration with EU countries, strengthen the competitiveness of domestic exporters, dispel myths about the "uselessness" of economically strong Ukraine in the European Union.
Finding competitive niches is not easy. However, Ukraine still has an important untapped instrument that may be appropriate — privatisation: expanded and accelerated privatisation with the admission of all potential investors (except the aggressor country and those countries that directly or indirectly supported it) without burdensome additional restrictions. The main goal of privatisation is not to fill budgets, but to strengthen the institution of an effective private owner.
In search of resources. The question of how much it will cost to rebuild a devastated country remains open and debatable, even without taking into account the "cost of human lives." Although it is often hundreds of billions of dollars needed to rebuild housing, businesses, and infrastructure, there is no clarity about the sources of funding. Today it is only clear that potential sources of reconstruction will be:
- specially created accounts in international financial institutions or funds that can be replenished with blocked russian public and private funds, in particular, reserve assets of russia with the IMF,
- funds received as compensation for losses caused by aggression (reparations),
- nationalised assets of russia on the territory of Ukraine,
- seized russian assets in banks and financial institutions of foreign countries.
The largest developed countries and the vast majority of European countries have already proved to be reliable partners of Ukraine, which will continue to assist in the military sphere. They also declared their readiness to join the reconstruction of Ukraine. And already today financial funds are being created, which aim to accumulate financial means for Ukraine (source 1). However, at the same time, it is important to understand that raising the necessary funds quickly will not be an easy task.
So, today the media inform that the blocked funds ($ 300 billion), which were previously foreign exchange reserves of russia, will almost automatically be transferred to Ukraine for reconstruction. However, the "redirection" of conserved reserve resources is a very complex and time-consuming process, does not have such large-scale precedents, and therefore requires significant legal approvals. And even if the formal requirements are all met (which may take several years), the direct redirection of funds may take further months. This is especially complex, when it comes to such significant funds and, moreover, reserve funds. Therefore, no matter how much we want to gain access to significant resources and direct them to the reconstruction of the country as soon as possible, we need to adjust our desires, according to their real availability.
In terms of compensation for losses caused by aggression (reparations) (source 2), their characteristic feature is that, as a rule, they are determined and assigned under the relevant peace treaty. However, today no one can know whether there will ever be a Ukraine-russia peace treaty. And if such an agreement is made, whether it will contain any provisions on reparations. And whether such provisions on reparations will be properly implemented, as it is well known how russia is fulfilling its own (even written) commitments.
As for the nationalised assets of russia on the territory of Ukraine (source 3), one should be aware that there are not many russian assets left in Ukraine, at the expense of which one could hope for significant funds, and thus real reconstruction processes, whilst russian assets seized in other countries look more attractive in terms of value (source 4). However, even if their "Ukrainianness" is proven, they are unlikely to be quickly handed over to Ukraine (as it was in the case of the "Scythian Gold", which has been the subject of additional lawsuits for years).
All the above does not mean, however, that Ukraine will receive only small funds for reconstruction. One just needs to increase one's efforts and get rid of non-grounded illusions and euphoria about a speedy recovery.
In conclusion, it is important to remember that one of the main goals of the Marshall Plan, in addition to restoring economic potential and accelerating the socio-economic development of Western Europe, was also to limit communist ideology (which spread rapidly in the early post-war years).
Ukraine has long been under pressure from the "russian world". Today, for Ukraine, the issue of the "attractiveness" of russia or russian "values" seems to have been removed from the agenda for a long time, if not forever. And there are real grounds to confirm that the successful support of EU countries in the socio-economic recovery of the country, ensuring security guarantees will give Ukraine a positive irreversibility on the path of European growth and development.
