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Why Russia must pay for the damage it has done to Ukraine – and how to ensure it does by Timothy Ash and Ian Bond, 19 June 2023 Western taxpayers and Ukraine itself will cover some of the costs of post-war reconstruction, but it is unrealistic to expect the private sector to fund everything else. Russia broke it; Russia must pay for it. Western governments have already poured billions of dollars, euros and pounds into military, humanitarian and financial assistance for Ukraine. They are hoping to pass the baton to the private sector for the next stage, reconstruction, but they are likely to be disappointed. Before they ask their own taxpayers to stump up again, they should put the responsibility where it belongs: on the Russian state. The Ukraine Recovery Conference (URC23) convenes in London on June 21st. An important element of the conference is the ‘Business Compact’, described as giving “leading international businesses a platform to show their support for Ukraine’s recovery”. Companies are invited to sign up with a view to seeking “opportunities, when the time is right, to engage in trade and investment, peer-to-peer expertise sharing, pro bono work and business activities”. Just in case the message is not clear, the website stresses “the URC23 will place emphasis on the role of the private sector – and the reforms required to drive investment – as essential components of Ukraine’s long-term recovery”. The scale of the challenge donors and investors are being asked to face is enormous. Tens of thousands of Ukrainians have been killed, maimed or kidnapped; millions have been internally displaced. Ukraine will have to entice back, and in some cases rehouse, the 8-10 million Ukrainians who migrated abroad to escape the war. And it will have the long-term responsibility of looking after perhaps as many as 1 million demobilised troops. The veterans will be hailed as war heroes, but praise will not solve the complex physical and psychological needs that many will have, or find jobs for the rest. Nor will it pay their pensions. The experience of Croatia after the wars of Yugoslav succession was that the heavy weight of war pensions took decades to resolve – entitlements were generous and imposed a fiscal drag on the economy for many years. The economic cost of the war in terms of lost output and productive potential, and destroyed assets, may already run into the hundreds of billions of dollars – perhaps as much as a trillion – and continues to rise CER INSIGHT: WHY RUSSIA MUST PAY FOR THE DAMAGE IT HAS DONE TO UKRAINE – AND HOW TO ENSURE IT DOES 19 June 2023
INFO@CER.EU | WWW.CER.EU
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