Rebuilding Ukraine: Finding the Right Partners and the Right Plan

As world leaders gather at the Ukraine Recovery Conference, taking place in London on 21-22 June 2022, Dr Melanie Garson and Daniel Sleat offer their reflections on what should be on the agenda for the Ukraine recovery conference.

This week London will host the latest international conference on the reconstruction of Ukraine. Key figures such as Ukraine’s First Lady Olena Zelenska, European Commission President Ursula von der Leyen and US Secretary of State Antony Blinken will emphasise the critical need for the international community to provide Ukraine with the right support to rebuild. A significant part of these discussions will centre on finance, with the World Bank citing an estimated rebuilding figure of $411 billion, and also on Ukraine’s strategy for reconstruction. We are likely to hear pledges of support from the international community, plans from the private sector to engage and more information on the Ukrainian government’s own proposals for implementation and coordination. However, significant barriers to reconstruction exist; these must be stated honestly to ensure that the right final plan emerges. Given the unprecedented scale of the challenge Ukraine faces, this plan will require significant input and involvement from the international community.

First and foremost among the barriers that must be addressed is the fact that Ukraine is engaged in an existential phase of the war, with its offensive getting underway more fully over the last week. The core prerequisite for rebuilding at scale is peace and stability – an end to the war. Yet no definitive end looks imminent. Ukraine has begun its offensive but is making comparatively slow progress on the ground against entrenched Russian defensive positions. This fighting will get more difficult as Ukraine advances towards Russia’s fortified defensive positions, located around 10 to 15 kilometres behind the current front line. While the aim, of course, is for Ukraine to retake its territory in full, current signals point to the need, in the end, for negotiations. French President Emmanuel Macron commented last week that he foresaw the offensive lasting weeks, even months, and that he wanted Ukraine “to be as victorious as possible so that we can then start a period of negotiations in good conditions”. Without a clear end to the war, any measures to rebuild will be sticking plasters. If the conflict enters a stalemate, private-sector investment won’t flow. So reaching an end to the war is the foundation needed for a long-term plan to rebuild Ukraine.

The second key factor that must be addressed is the scale of the challenge. Damage to the extent seen in Ukraine has not taken place on the continent of Europe since the second world war. After that conflict, as US think-tank the RAND Corporation has noted, it took Germany and the UK around 20 to 30 years to fully rebuild. Ukraine’s economic output contracted by 30 per cent last year and significant support has been required to keep the economy functioning. Unemployment and poverty levels are both at around 20 per cent. Immediate priorities for Ukraine remain energy supply, as well as the provision of food and water.

With the need to end the war and come to terms with the scale of the rebuilding required factored in, discussion then turns to what a reconstruction plan might look like.

The right plan will require significant finance, the involvement of the private sector underpinned by government leadership and the right support for Ukraine as it undertakes reconstruction. These three elements, however, will depend on, and need to be driven by, the right strategy.

In terms of finance, a number of figures have been discussed, most notably the World Bank figure of $411 billion. The precise level of financial support Ukraine will require depends on when and how the war ends. If the conflict continues on its current trajectory, it’s possible that this figure of $411 billion will come to look conservative and it may look more like $500 billion. Discussions of how these financial requirements will be met will likely centre in particular on the roles of the European Union (EU) and the United States alongside the international donor community. Funding peace, and particularly galvanising the political support to fund it, is notoriously difficult – much harder often than garnering support to fund war. The dividends and impacts of post-conflict reconstruction are difficult to measure in the short term and do not align with typical political cycles, often reducing their political salience. Further, the link between long-term economic resilience and military security is often misunderstood. In the long run, domestic audiences benefit from a well-implemented reconstruction process.

With this in mind, the reconstruction plan will require an approach that distributes the cost across multiple players to ensure it is resilient to political shifts. This won’t be possible without the private sector playing a very significant role. This will likely be a key focus of the conference. As mentioned, the core requirement for attracting the private sector is a sustainable end to the conflict. The business environment in Ukraine will matter of course, but companies will need confidence in the operating environment and in the country’s plan. Involving the private sector in the reconstruction plan will also require bold leadership from donor governments equally committed to building economic as well as military resilience in post-conflict Ukraine. The cost of reconstruction, even at the $500 billion mark, is still only equivalent to 1 per cent of the GDP of the Organisation for Economic Co-operation and Development; over 10 years that is only 0.1 per cent. Reframing the value of reconstruction and depoliticising support for it will enable the commensurate confidence commitments from the private sector.

This brings us to the absolutely central element of rebuilding Ukraine: the right plan. Ukraine has major challenges to navigate as it rebuilds, as well as many offers of support. In the background is the prospect of EU accession talks opening later this year. All this means Ukraine must have the right strategy for its future: a clear plan for how it can rebuild as a 21st-century state, how it will deliver domestic reforms for transparency and stability in concrete terms and how it will position itself internationally to attract support. This strategy will need to carefully align the various offers of support with Ukraine’s actual needs and ensure international partners are complementing one another rather than competing. To develop this strategy, Ukraine will need the right support from international partners versed in best practice for navigating the demands of effective post-conflict reconstruction: prioritisation, donor management, delivery and international positioning.

An economically strong and democratic Ukraine that can act as a model for other nations all starts with the right plan; hopefully we will begin to see the emergence of one in London this week.

Dr Melanie Garson is an Associate Professor (Teaching) in International Conflict Resolution & International Security and Acting Director, Geopolitics at the Tony Blair Institute for Global Change.

Daniel Sleat is Senior Policy Adviser, Europe and Global Trends at the Tony Blair Institute for Global Change.

This blog first appeared on the Tony Blair Institute for Global Change website, and is reposted with permission.

Photo by Robert Anasch on Unsplash

Note: The views expressed in this post are those of the author and not of the UCL European Institute, nor of UCL.

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