Ukraine’s Recovery and Reconstruction: What Am I Missing?
Ukraine’s recovery talks highlight stalled EU accession clarity, uncertain US commitment, and the absence of a credible plan to manage massive post‑war funding.
Kyiv Post
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I attended Chatham House’s European Bank for Reconstruction and Development-sponsored conference this week, titled “From Destruction to Recovery: Building Ukraine’s Future Prosperity.” Unusually, it was not conducted under Chatham House rules so it is freely attributable.
All this is again in preparation for the latest Ukraine Recovery Conference (URC) this year to be held in Poland. These are the now – unfortunately (given the long duration of the war) – the annual get-together of the Ukraine support community to figure out how, once the war ends, we support Ukraine’s recovery and reconstruction.
Telling here was the comment from the Polish URC head this year who noted that he is not even sure if the US will participate. It’s not as though the US is really even providing much financial support for Ukraine these days. More, the US is now a free rider on all the defense tech innovation that the Ukrainians are learning in the battlefield – and if the war in Iran is anything to go by, the US seems to have learned zilch from the war in Ukraine when it comes to the changing nature of warfare, and drones in particular.
It was eye-opening though to hear UA Army Secretary Dan Driscoll testifying in Congress this week about the remarkable capabilities of the Ukrainian tech and drone community. I seem to remember Driscoll being a hawk in terms of pairing back US support for Ukraine – he seems to have changed his tune after visiting Kyiv.
French President Emmanuel Macron and German Chancellor Friedrich Merz condemned Russia’s record drone and missile assault against Ukraine on Thursday, saying it undermined peace efforts and raised doubts about Moscow’s willingness to negotiate while civilians remained under attack.
A couple of questions I broached though at the Chatham House gig, and to which I did not receive very satisfactory answers:
First, does Ukraine need a date for EU accession, as an anchor for reform, and is the EU any closer to giving one?
Second, are we any closer to figuring out an institutional structure for post-war economic/financial support for Ukraine, and can the same institutional settings which have helped EU accession states thru the process?
Admittedly, both were asked rhetorically – I know the answers, and have known them for the duration of the war, if not before on the EU accession front.
On the first, I have covered the region for some 40 years, through the Communist/Soviet era, the collapse of those regimes, then the whole EU accession process for the likes of Poland, Hungary, et al. And my strong conviction therein is that countries enacted reforms as clear dates for accession were set and roadmaps for reform and accession were laid out. I always use the Copenhagen Treaty of 1994 which set the target of EU accession a decade on for the first wave of new EU members from the former Communist bloc.
I’m not sure EU leaders actually thought these countries were going to make the cut when they set the target back in 1994. But given a date, these countries bust a gut to ensure accession. They ticked off all the reforms that needed to be done. But they only did it because there was a clear accession date. They assumed or trusted that if they undertook the difficult reforms, that they would be rewarded with EU membership.
My take for Ukraine is that a serious, credible target date should be set for accession, perhaps with transitional arrangements for difficult areas, such as agriculture But, there also needs to be options to delay if matters are not being adequately addressed. I know there has been talk of 2027 as an EU entry date, but that is just not credible with the war on-going. I would suggest 2030 as something which is realistic and achievable.
The reconstruction conundrum
It is interesting that the Chatham House gig again focused on the need for the private sector to do a lot of the heavy lifting in Ukraine’s recovery and reconstruction – albeit private sector participants were again in relatively short supply.
Typically at URC like events it’s the public sector preaching to the private sector. But what I think the private sector will need is two things.
Firstly, it needs security, which is pretty obvious. I know there has been a lot of focus on risk mitigation tools, insurance and reinsurance, which can help in war torn economies, but these really only help at the margin. For Ukraine to really flourish and fly, the country needs to be secure with a full end to the war, and I would use NATO membership or State of Israel style security assurances (you get the full range of conventional NATO kit to be able to defend yourself);
Secondly, I think businesses will need a clear EU accession date – something which is realistic to assure them that they are investing in a country which will have full access to the single market, and all the longer term institutional and financial anchors that that provides. We have seen how the convergence trade works in Emerging Europe with realistic accession dates and then delivery on the accession process.
On the second issue, there are still blank faces, which is remarkable 4.5 years into the war, and all these recovery and reconstruction conferences. Imagine the war will end, eventually, but there will still likely be tens of billions of euros on the table from donors, perhaps hundreds of billions, to support Ukraine’s recovery and reconstruction. I don’t think there is any well thought out plan in terms of what institutional structure there should be to manage that money and the process. It’s a recipe for corruption, disappointment and failure in my mind.
Over the past 4.5 years, I have suggested various structures, including a sovereign wealth style entity (AURA), jointing owned by the EU, allies and Ukraine, and eventually becoming fully Ukrainian-owned. But I am just staggered that despite all these recovery conferences, and focus on the private sector (easy to talk about it, hard to deliver) nothing seems to have been achieved in terms of understanding how to really manage this process.
Reprinted from the author’s @tashecon blog. See the originalhere.
The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post.
