What Will It Take To Rebuild Ukraine?

Ukraine’s reconstruction and recovery costs are the focus of a new report released jointly with the government by the World Bank, the United Nations, and The European Union. The assessment focuses on humanitarian and economic needs, as well as what it will take to rebuild once Russia’s war on Ukraine is over. Updated estimates now exceed $400 billion and there is much debate over how to support reconstruction in Ukraine that is truly transformative and ensures a clear break from the past. Ukraine has overcome numerous challenges and struggles since gaining independence after the collapse of the Soviet Union in 1991. There is no doubt that Ukraine, which is known for its resilient people and tech innovation, will do so again.

Given the size of the task at hand, it is obvious that recovery efforts will need to be an inclusive multi-stakeholder process involving all parts of society, in addition to the international community.  A unified vision, strong coordination, and adaptation to the realities on the ground will be necessary to launch reconstruction that is truly transformative and advances the values a free Ukraine. This will include reinventing the country’s economy and governance to carry it forward.

History and hard data show that the most successful transformations include strong private sector involvement to restore stability and livelihoods.

Ukraine’s large network of small and medium-size enterprises (SMEs) is embracing this challenge now. SMEs are already a driving force behind the country’s current war efforts, providing vital services and leadership in close coordination with all levels of government. For example: networks of business associations managed to start up logistics hubs for humanitarian aid and other goods in nine locations across the country. Business leaders have also begun initiating reforms and business agendas that they insist cannot wait, including anti-corruption efforts to minimize war-time fraud and keep critical supply chains moving.

The Center for International Private Enterprise (CIPE) employs 40 years of experience to carry out ”rapid response” actions and programs to strengthen economic conditions and democratic governance in countries ravaged by conflict or disasters. Just a few example locations include Bosnia and Herzegovina, Colombia, Kosovo, Sudan, Yemen, Iraq and Afghanistan. Ukraine and other countries in crisis can benefit from these experiences, both the good and the bad, to guide their own recovery. A top theme: History and hard data show that the most successful transformations include strong private sector involvement to restore stability and livelihoods.

Ukraine has many strengths that can be leveraged, in addition to a sophisticated private sector: an active civil society, a talented people, an open procurement system and a beneficial-ownership register. Most of these assets and systems remain functioning and viable, despite the destruction and suffering wrought by Russia’s most recent military onslaught. SMEs are filling gaps in every possible way, in cooperation with the government, while also advocating for reforms that will speed business operations and put Ukraine on a path to modernization.

In the coming weeks and months, CIPE and partners are introducing a series of reports and policy papers to inform decision-makers and potential donors about key topics, as well as the increasingly important role of Ukraine’s private sector in recovery, reform, and rebuilding. We are also working with prominent think tanks in the region, providing expertise and briefs to peer organizations and government officials from the United States and European Union countries. Newly released resources: reports on the impact of oligarchs and Russia’s pre-war corrosive capital investments on Ukraine’s economy.

Published Date: March 30, 2023