Colin Ross, general director of the Gleeds office in Kyiv, looks at the huge reconstruction task ahead – and considers who is going to pick up the bill
In the midst of Russia’s sustained attack on Ukraine, part of the conversation has turned to the revival of the country. Ukraine will not be rebuilt as quickly as it was destroyed, so planning should start now.
Who, what, why, when and how are the core questions at the heart of any strategic plan – and the same applies here. Who is going to fund the rebuilding? What might the plan look like? When will it start? How will the re-build benefit local communities? The many important questions start here…
Who is going to manage the money?
The costs associated with rebuilding Ukraine are difficult to accurately estimate, especially while the war continues. What is clear is that the total will be measured in hundreds of billions of dollars, with the Kyiv School of Economics noting that with every passing week Ukraine suffers about $4.5bn worth of damage to civilian infrastructure.
Ukraine’s central hub for collecting funding and donations is UNITED24, launched by President Zelenskyy, with funds from countries, organisations and individuals all over the world being transferred to the National Bank of Ukraine and allocated to the various ministries associated with (i) defence and demining, (ii) medical aid and (iii) rebuilding the country.
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By early June some $51,330,630 had been raised, however only $268,149 has been allocated for rebuilding. It is not unexpected at this stage to see most funds allocated to either defence/demining or medical aid but, as UNITED24, notes “…funds collected in the account of the ministry of infrastructure are insufficient to restore even a single damaged site; therefore, they have not been spent yet”. In other words, there still isn’t any money for infrastructure and construction in this fund.
There has been much talk of a new Marshall plan for Ukraine, and the US Senate has already passed a resolution for a $40bn aid package
How about letting one country manage the money side? Many of you will know of the 1948 Marshall plan, officially known as the European Recovery Programme (ERP), an established initiative, founded by the US, with one country taking responsibility for providing and managing the funds. There has been much talk of a new Marshall plan for Ukraine, and the US Senate has already passed a resolution for a $40bn aid package.
Britain, in addition to supplying significant volumes of military equipment and over £1bn of economic aid, has committed to assist in the rebuilding but has not, at least publicly, put a value to any rebuilding aid. The European Union has pledged about £7.6bn, in the form of loans, and has committed to setting up a “Rebuilding Ukraine” international platform that will allow countries to donate towards a reconstruction plan.
Financial institutions such as the EBRD, World Bank and IMF are all likely to commit, either through loans or donations. Funds may also be made available from assets and funds seized following the sanctions imposed since the invasion, or through reparations, although these are likely to be available only after lengthy legal proceedings.
Collaboration is the way to go
These intricacies and complications mean it is unlikely that one country or financial institution will be able to fund the rebuilding, so a collaborative approach will be necessary. Ukraine has been a recipient of much international aid since its independence; unfortunately on many occasions there has either been an overlap with different organisations funding similar projects while other needy causes receive little or no funding.
Currently there does not appear to be a joined-up approach to the rebuilding, and this is necessary to ensure that money is allocated – and spent – appropriately.
A structured and realistic approach
It is essential that the rebuilding of Ukraine is undertaken in a structured manner, with an acceptance that everything will not be repaired immediately. There needs to be careful coordination to maximise the benefits of the rebuilding.
This is where the economists, in a similar manner to the 1948 Marshall plan, need to be heavily involved. A Blueprint for the Reconstruction of Ukraine | Centre for Economic Policy Research (cepr.org) is one such document. While all may not agree entirely with this, the phasing approach mentioned here is definitely relevant.
Chance to start anew and think green
Westerners who have not travelled extensively in eastern Europe or the former Soviet Union, are probably amazed by the juxtaposition of beautiful golden domed churches that are common in Ukraine and the old monolithic apartment blocks. While the former are eye-catching and provide wonderful places for worship, the latter are often an environmentally unfriendly eye-sore.
In rebuilding these residences, as well as other public buildings, there is an opportunity to construct them in a way that addresses modern requirements associated with energy savings and low carbon. Furthermore, there is an opportunity to incorporate smart technology and digital ways of working within the new cities and buildings.
In collaboration with local communities
There has been much reported of countries and organisations wanting to help redesign and rebuild specific towns, cities or individual elements of the infrastructure (education, for example). While this is admirable, it can bring issues.
International architects can undoubtedly provide assistance, but it is probably best that they work in conjunction with local designers, and most importantly in consultation with those that are going to live there. “Think global, act local” has long been our mantra at Gleeds for a reason!
If you build an authentic connection with the local community and do things alongside them, you build with far more success and sustainability. We are currently restoring Peru’s key infrastructure in the aftermath of the devastating El Nino storm in 2017. A vital element to this work is embedding skills and creating sustainable practices for local teams to continue restoring Peru long after we have gone.
We are building 74 new schools, 51,000 hectares of reforestation, terracing and revegetation, 20 new flood defences and creating 9,000 jobs.
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Finally, concerns regarding corruption should be addressed. While there have been numerous initiatives implemented to address historic issues, concerns are still voiced that corruption has not been fully eradicated.
The EU plan for rebuilding Ukraine envisages the reconstruction plan to be “drawn up and implemented by Ukraine, with administrative capacity support and technical assistance by the EU”. And here is the difference between Ukraine’s UNITED24 and any new Marshall plan, whether it is managed by the US, UK, EU or AN Other, it is very likely that any funds provided for rebuilding Ukraine will not be managed by Ukraine to reduce the risk of corrupt practices.
While doing this will result in funds being spent on western experts ensuring that the money is spent appropriately, it is hoped that these costs will be significantly lower than those that could “disappear” due to corruption.
Colin Ross is general director of Gleeds Ukraine. After initially staying in Kyiv following the Russian invasion he is currently working in the UK. Or, as he puts it, “I work remotely but am 100% working for Ukraine”. He hopes to return to Kyiv soon.
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