How to ensure Ukraine thrives after the war

The war is taking an enormous toll on Ukraine: thousands have been killed, millions displaced, infrastructure has been destroyed and cities are being levelled. It is logical that all attention is focused on the fighting at the moment. However, the resistance and bravery of Ukraine’s armed forces allows us to look ahead to building a free, prosperous country. Defeating Russia will change Ukraine for ever. But the reconstruction will also present challenges that need to be recognised in advance so that we can seize this crucial moment.

The fact of the matter is that, ironically, this war is a result of reforms. Ukraine has become a vibrant democracy; its free economy was integrated with global markets. This was an enormous irritation to the authoritarian Russian regime. It detested our reforms to the army, anti-corruption initiatives, electoral reform and changes in the energy market. Those changes were at times slow and chaotic, not least because of the influence of oligarchs and other vested interests that blocked progress. Often they received funding from Russia. Domestic resistance to reforms (which were seen to be imposed from abroad) managed to slow our integration with the EU, too.

Vladimir Putin launched his invasion before Ukraine’s politics and economy became too strong. What does this tell us about what needs to be done after the war? Further rapid, deep reform will be needed, as will immense sums to rebuild the country. Initially, the financial support should come from international organisations and foreign governments. But over time it should be replaced by private investment. The terms of any peace deal are crucial to all this: the threat of renewed Russian aggression would put off prospective investors.

After the fighting stops, demography will be a major challenge for the Ukrainian authorities. More than 4m people have fled the country, mostly women and children. Some of them will have found jobs and schools for their children and may prefer to stay abroad. After the end of fighting, the men may join them.

To return, our people will have to be convinced that it is worth leaving the safety of the EU to find a better future at home in Ukraine. We should create a repatriation grant scheme to cover relocation, settlement and social security for job-seekers. We must ensure that there are jobs to entice Ukrainians back. New housing and an improved health-care system will also be critical to ensure those returning feel as cared for as they would be in Europe.

We must also ensure that the country’s politics is not poisoned by our triumph over Russia. Victory will understandably create hype, and a sense of pride. This will combine with the feeling that the West betrayed Ukraine by being slow and split in its military support. This powerful resentment could be exploited by political forces that want to free-ride on the reconstruction bonanza. They will be more interested in lining their own pockets than in rebuilding the country. (This attitude was common among the elites even before the war.) And buoyed by the victory, they will be emboldened.

Since the damage done by corruption is seen mostly in the long term, any inadequate government could blame its underperformance on the state of the recovering country. It is unlikely that such an administration will be punished at the ballot box. The political future of even the most sleazy government would be secure—for a while at least. All Ukraine’s previous governments have struggled against corruption.

The magnitude of our financial need will be enormous: replacing damaged infrastructure, re-planning and re-building homes and other structures. We must get rid of mines. Some, including the EU commission, have floated the idea of a “Marshall Plan for Ukraine”. The success of the original plan rested on its generosity but also on the institutional capacity of some of the countries involved with it. Providing cash to Ukraine unconditionally could inadvertently harm reform efforts. We must be clear from the start: any plan’s funding should be contingent upon reforms to secure property rights, the rule of law, balanced taxation, adequate labour codes, suitable regulation and implementation capacity.

There are two sets of reforms that are needed particularly urgently so that funding can flow to Ukraine. First, we must replace the anti-monopoly committee, which is currently ineffective and beholden to political interests. It will prevent reconstruction funds being captured by profiteering elites, as happened in Iraq and Afghanistan. Second, although Ukraine has an award-winning digital procurement system, there are still loopholes which we need to close. A post-war government could seek to bypass it in the name of expediency. That would be foolish. We should instead get to work on a transparent, competitive, fast process. We will need proper governance in the institutions managing the reconstruction funds. They should be run by a mix of reputable international and national investment professionals.

The main goal should be not only to save money, but also to focus the political elite on reforms for which Ukrainians have waited for too long. At a minimum this would provide Ukraine with a chance to recover from the war. It would also help the country move towards EU integration—but this is by no means guaranteed. We also need to move to a parliamentary republic, ensure a better balance of powers, protect our politics from oligarchs and ensure the judiciary is clean and independent.

Such an ambitious programme, supported by substantial financial aid, would allow Ukraine to thrive. This will not happen overnight. But millions of Ukrainians may be happy to live in a country that defeated a powerful historical adversary and one that advances every day. Ukraine could even become a role model for democratic reforms in other countries in the region which are now constrained by Russia, such as Moldova, Georgia, Belarus, Armenia and Kazakhstan. Maybe we will even inspire Russia itself one day.

Oleksandr Danylyuk was Ukraine’s minister of finance between 2016 and 2018. He served as the secretary of the country’s National Security Council in 2019. He is the co-founder and director of the Centre for National Resilience and Development, a Ukrainian think-tank.

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