Budapest Forum 2023 - Ukraine After the War – the Reconstruction of Ukraine

Speakers

• András Földes, journalist, video journalist, HVG
• Tomáš Kopečný, Governmental Envoy for the Reconstruction of Ukraine, Czech Republic (online)
• Irina Kravchenko, Deputy Head of Ukraine, EBRD (online)
• Ostap Sereda, Visiting Professor, Central European University; Director, Invisible University for Ukraine

   Moderator: Dorka Takácsy, Research Fellow, Centre for Euro-Atlantic Integration and Democracy

Main takeaways

• András Földes differentiates between three stages of damage done to Ukraine:
  • areas and settlements that suffered sporadic destruction, but otherwise still functioning and livable;
  • areas and settlements that suffered partial destruction, where whole neighborhoods or significant parts are destroyed, with surrounding areas remaining livable; and
  • total destruction, when a whole area or town is wiped off the map and made inhabitable, like in the case of Bakhmut.
  • An additional case is when key infrastructure – electricity, telecommunication, water, bridges etc. – are damaged, as these should be prioritized during reconstruction.
• He saw first-hand that the Ukrainian society is highly resilient and committed to rebuilding their country, which is crucial as authorities can rely on civilians and volunteers for additional help. Most of the refugees are determined to return to the country, as soon as the fighting is subsided.
• Tomáš Kopečný argued that the political will is there among European capitals to use frozen Russian funds, and they are working on finding the proper legal instruments to make this happen.
• In the case of the European Union, currently, only the revenues from assets can be used for reparation, not the concrete assets like yachts, real estate and financial assets, as these are protected under current law.
• In the case of private assets – not owned directly by the Russian state – should be tied directly to those private entities and oligarchs who are connected to war crimes and atrocities.
• The Czech Governmental Envoy also emphasized the Czech Republic’s deep involvement in Ukraine’s reconstruction from both the moral and economic standpoint. The economic involvement does not start with reconstruction, as from the 500,000 Ukrainian refugees in the country, 120,000 are now officially working, boosting the Czech economy and eliminating unemployment. Mr. Kopečný hopes these people will have great experiences, and when they return to Ukraine, these connections will be valuable between the countries.
• NGOs, of course, play a crucial role in alleviating the immediate humanitarian problems; however, businesses need to be involved from the start to make our efforts sustainable. This is well understood on not just the local and European but global level in order to achieve increased resilience in the short term, and a fast recovery in the long-term.
• For the Czech Republic, the economic involvement does not start with reconstruction, as from the 500,000 Ukrainian refugees in the country, 120,000 are now officially working, boosting the Czech economy and eliminating unemployment.
• Irina Kravchenko noted that although reconstruction and recovery can properly take place after the end of the war, the European Bank for Reconstruction and Development and other institutions are working with the Ukrainian government, banks and private businesses to facilitate and expedite this process.
• Besides repairing damaged infrastructure and restoration of capacity, donors are looking to implement better solutions, including green energy, thus modernization and restoration happen simultaneously.
• The task is enormous as the World Bank estimated in February 2023 that over $135 billion in direct damages had been caused already, while there is an urgent need for $14 billion by the end of this year, according to Ms Kravchenko.
• Businesses try to move to safer areas and improve their technology to enter the export market in many cases, despite the extra costs of retaining physical assets and human capital.
• Other than financial aid, EBRD is also cooperating on policy reforms in the justice system, corporate governance, and many other areas. These reforms are crucial to fasten Ukraine’s European integration.
• Professor Ostap Sereda, Director of Invisible University for Ukraine project, explained the results of a recent opinion poll in Ukraine, that showed distrust towards state authorities, as most respondents wanted locally elected leaders to set the reconstruction priorities and have the financial control exerted by international organizations such as EBRD.
• Ukrainian people have traditionally low trust in political institutions over the board, including even NGOs, as they are sometimes associated with elitism.
• Despite this traditionally low trust, 75-90% of respondents see Ukraine’s future as promising, while 50% admittedly see their household’s economic situation worsen over the last two years.
• According to Professor Sereda, one often overlooked aspect of the reconstruction effort is modernization and higher education.
• The issue of brain drain is serious, as according to the Ukrainian Academy of Sciences, about 10% of scholars had to leave the country due to war conditions.
• Ukraine has 5 million internal refugees (IDPs) who will need public institutions and infrastructure if they need to stay long-term in safer, Western parts of Ukraine.
• The country will need 300,000 immigrants every year to sustain the labor force after the war and ease the demographic challenges the country will face.

Recommendations

• Western countries should use frozen Russian assets to rebuild Ukraine, but only within the framework of the legal systems.
• Stay well informed about the real situation in Ukraine and avoid fake news.
• It is important not to forget about the human aspects, as we plan the reconstruction of Ukraine.
• The recovery of Ukraine should not feel like charity but an investment into the future of Ukraine, and Europe.
• Convincing foreign investors that Ukraine is worth their investment despite the risks needs close cooperation from the insurgency industry.
• Ukrainian and European academia should be renewed, modernizing and decentralizing expertise on European Studies, while seeing it as a reciprocal, brain-exchange process, instead of a brain drain.
• Ukraine should plan to counter anti-immigrant sentiment if it aims to attract foreign workers after the war.