Reconstruction of Europe after the Second World War began three years after its end. Before that, the viability of the post-war Western European economy was supported by imports from North America and subsidies and loans from the USA and Canada. If the country's economy is not restored after the war, it will need to be constantly subsidized. And the latter is much more expensive as a result. World leaders seem to have learned this lesson well. After all, plans for the reconstruction of Ukraine are already being talked about, despite the fact that hostilities continue.
Who develops this plan?
On April 21, 2022, the President of Ukraine signed an order on the formation of the National Council for the Recovery of Ukraine from the consequences of the war. This is a consultative and advisory body, which was entrusted with the task of developing a recovery plan.
The main principles of the future recovery of Ukraine:
full access to the EU and G7 markets;
getting full membership in the EU;
construction of the economy based on the principles of deregulation and liberalization;
establishment of logistics routes in the western direction;
the transition from the export of raw materials to processing in those industries that provide the largest export revenue;
development of the domestic military-industrial complex;
self-sufficiency in energy will be achieved by increasing the production of own gas and the development of nuclear energy;
climate modernization;
localization of at least 60%;
Right now, the National Council for the Recovery of Ukraine from the Consequences of the War consists exclusively of representatives of the Office of the President and the Government. The war in Ukraine is definitely a disaster. At the same time, it opens a window of opportunities, in particular, the involvement of world experts in various fields in the modernization and restoration of the country.
Milestones
First of all, before rebuilding, Ukraine tries to minimize all kinds of damage from the war. It is about the relocation of businesses from the war zone to safer regions, housing for temporarily displaced persons, and in general, all the measures aimed at keeping people and businesses alive and working — respectively, to keep the economy alive.
The second important stage is the documentation of damages. On the one hand, it is necessary to hold Russia accountable for war crimes in international courts. However, on the other hand, such documentation helps to collect information about all destruction and damage. Then you can categorize them and develop plans for reconstruction. For example, depending on the scale of the devastation, the house may need repair or reconstruction, or it should be demolished and rebuilt from scratch. Right now, The Ministry of Digital Transformation is centrally documenting damages from military aggression through the "Diya" (Ukr. Action) mobile application. Anyone can submit information about the damage caused to Ukraine and its citizens by Russian troops that is extended to the destruction of infrastructure, housing, schools, looting, environmental damage, and much more. It is important that this collected information is then combined into one register, which will be used for reconstruction planning.
In addition, critical infrastructure will need to be restored after hostilities are over. In particular, power grids, roads, railways, gas supply, waterworks, and the Internet. The state will have to rebuild schools and hospitals and provide at least temporary housing for those who have lost it. At this stage, a lot of humanitarian aid will still need to be collected. Partially, this can be also done before the end of the war — to restore the most significant objects in territories liberated from occupation.
In the future, the state and partners will direct efforts to restore the economy as a whole and its stable growth. The main efforts will be focused on creating jobs and permanent sources of income generation. These include programs to support and develop entrepreneurship, a balanced financial policy, and strengthening the energy sector. As part of the post-war recovery, Ukraine will have to rebuild some cities almost from scratch. It is important that this reconstruction does not become a blind reproduction of what was destroyed. Instead, this is an opportunity to apply the latest approaches of urban planning and architecture to make Ukrainian cities more convenient and inclusive for their residents.
Why is Europe's postwar experience important to Ukraine?
Some states, such as Poland, Germany, and the Netherlands, experienced the so-called post-traumatic growth after the wars when they managed not only to overcome existing difficulties but also to surpass pre-war indicators of the quality of life. Their experience of post-war development can help Ukraine restore its infrastructure faster and return to normal life.
It is important to emphasize that the experience of post-war reconstruction in European countries was not always successful. However, it is the analysis of past mistakes that will help Ukrainians to avoid their own, taking into account all possible risks. For example, in Bosnia and Herzegovina, after the end of the Bosnian War (1992–1995), there was no significant economic growth, despite financial and various resource assistance from other countries that sought to help the country integrate into Europe in the future. The lack of a general development strategy, lack of a single center for coordinating reconstruction programs, duplication of efforts of various organizations, inappropriate use of funds, low management potential of authorities, etc., were among the mistakes of that time.
Monitoring and control of financial flows aimed at industrial development are important for a country rebuilding after the war. This helps to avoid the concentration of funds in the hands of one corporation or private entity that will only care about its own profits. Something similar happened in Italy after the end of the Second World War. At that time, a significant share of financial assets was taken over by representatives of big businesses and individual clans, which slowed down the country's economic development.
Ukraine will need to resolve a number of social issues, including financial compensation for the victims. This once again emphasizes the importance of timely documentation and assessment of caused damage. Of course, it will not be possible to do without financial assistance from other countries. So far, one can only guess whether it will be a new "Marshall Plan", soft loans, or reparations from the aggressor country. As for the latter, Ukraine will have a long way to go. The options can be different: from Russia's voluntary agreement to pay reparations to the forced recovery of the frozen assets of the aggressor country through international lawsuits. It should be taken into account that reimbursement processes can last for years. In particular, in cases of reparations payments, due to the foreign assets of Russia and Belarus, each of the countries that will own such resources will have to work out their own legislative scheme to make these payments to Ukraine.
Also, the country's general recovery and development strategy must meet the tasks necessary for EU accession, because, on June 23, 2022, Ukraine finally received this desired EU candidate status. And a number of programs and strategies related to the post-war reconstruction of Ukraine should be coordinated by a single center, the activity of which, in turn, should be monitored by the involvement of international partners and experts.
In order to continue moving into the EU, Ukraine will need to continue the reforms started before the war and harmonize its legislation with European legislation. For example, to introduce a European certification system, to continue large-scale privatization, anti-corruption, and judicial reforms.
To raise the economy and industry
The war dealt a significant blow to the economy of Ukraine. A successful solution for the recovery of the country will be the integration of the Ukrainian economy into the EU economic system. Various European logistics and infrastructure projects can help with this. For example, the inclusion of Ukrainian logistics routes (road, rail, air, and water) in the European logistics networks under the TEN-T program (in July 2022, the European Commission included Ukrainian logistics routes in the indicative maps of the project), reconstruction of existing and opening of new checkpoints on borders with European states, the transition of the railway to the European format track standard, etc.
During the war, the Russian army is targeting Ukrainian enterprises of various profiles and capacities. Fortunately, many businesses managed to evacuate equipment and/or raw materials or finished goods while continuing to operate. However, some were partially or completely forced to stop work: Illich Steel and Iron Works and the Azovstal Iron and Steel Works in Mariupol, the Antonov Aircraft Plant in Kyiv, the Kremenchuk Oil Refinery, and others.
Currently, it is very difficult to estimate the exact damages from the destruction of these enterprises, but this will have consequences not only for Ukraine but also for the world. For example, the Azovstal plant, which became an outpost of the Mariupol defense at the beginning of the full-scale invasion, annually produced millions of tons of cast iron, steel, and rolled metal (some of its types were produced only there). The plant provided more than 12,000 jobs for Mariupol residents. The last time "Azovstal" was completely stopped was in 1941 due to the war against Nazi Germany and resumed work in 1943. In April 2022, it was bombed and practically fully destroyed.
In the context of the post-war recovery of production, it is worth considering the example of Korea. After the end of the Korean War (1950–1953), the country was divided into the Southern and Northern parts. Industry in North Korea was more developed even before the war, but after the end of hostilities, the southern part had to gradually reorient itself to export, and invest in the development of science and technology.
Localization of production can become an important condition for full-fledged post-war development for Ukraine — at least 60% of products must be produced within the country. This point, by the way, is specified in the plan for the recovery of Ukraine after the war, which was approved by the specialized committee of the Verkhovna Rada in May 2022. The plan is designed for 10 years and aims to strengthen European integration and support private initiatives.
Reconstruction is a window for improvement. Not only residential buildings but also cultural and religious buildings, which are architectural monuments, monuments of the nature reserve fund, etc., fall under the sights of the Russian army. However, reconstruction can be a good chance for Ukraine to move away from ineffective or morally outdated practices of both Soviet and modern planning of public space, taking into account the historical legacy and the modern context: real needs of people, landscape features, environmental friendliness, and aesthetics.
To return civilians
The reconstruction of the country is not only about the restoration of physical objects. Ukraine needs qualified and experienced workers, and after the victory, this issue will become even more urgent. Therefore, the government has to do everything to ensure that Ukrainians can have a decent standard of living in their country, and not abroad. The Ukrainian government is considering options for encouraging citizens to return to the Motherland: negotiations are underway with EU countries on the possibility of providing refugees with financial support for a certain period after returning to Ukraine. They are also discussing the provision of additional funding to hire Ukrainians for jobs that will help rebuild the state, as well as the creation of temporary basic income programs for those who will return home. In particular, some of these aspects are already foreseen in the project of the Recovery Plan of Ukraine.
Rehabilitation of those who remained in the country requires special attention: psychological adaptation and involvement of veterans in peaceful social life, rehabilitation of people with disabilities acquired during the war or post-traumatic syndrome, assistance to internally displaced persons, etc.
The reconstruction of Ukraine's infrastructure and the return of its citizens to normal life is a long, difficult, but quite real process. Ukrainians are already united and have strong support from the world community. Studying the existing experiences of the post-war reconstruction of European countries will help to more meaningfully undertake the development of the country. However, it is now important that this recovery takes place in a moderate and transparent manner. Therefore, it is necessary that competent experts be involved in these processes and money be spent efficiently. Then, in the long term, Ukraine will be able to return not only to pre-war indexes but also to improve living standards.