Reconstruction of Ukraine: future plans for a shattered country – Wikipedia

“How can we resume economic activities in Ukraine?” Yuri Gorodnichenko, a Ukrainian-American economist at the University of California, Berkeley, has a plan when he asks this rhetorical question at Humboldt University Monday night. He is the lead author of the book “Scheme for the Reconstruction of Ukraine”.

He describes the “extent of devastation and the refugee crisis” caused by the Russian offensive and blockade that “can be compared to the effects of World War II.” In accordance with this historical catastrophe, the scenario of a new version of the Marshall Plan for war-torn Europe in the years 1948 to 1952 was designed, adapted to the needs of Ukraine.

Gorodnichenko and five of his international colleagues published the “Ukraine Reconstruction Draft” in April as a recommendation from the London Center for Economic Policy Research (CEPR) – the first edition of a new “rapid response economics” by the renowned British think tank and global network.

Far from outdated “Soviet” structures

The professor, who was connected via video, explained to the committee and the audience at the Heliopolis University Faculty of Economics: “In phase 0, production capabilities are secured, the first phase is related to humanitarian aid, in the second phase is to rebuild the critical phase infrastructure and in phase 3 is to rebuild the economy. Better than before.”

Yuri Gorodnichenko, Professor of Economics at the University of California, Berkeley.Photo: University of California, Los Angeles / Berkeley

away from the old structures of large-scale industry, which is still “Soviet” in parts, towards decentralized production from agriculture to information technology. Distribution and import/export on alternative routes instead of the main and currently besieged ports. On the one hand, this will reduce the vulnerability – of the Russian aggressor – and on the other hand, it will open the opportunity to use green energy, for example.

Gorodnichenko speaks from an economist’s perspective. But he also does not forget about educational institutions with pupils, teachers and students as part of the “productive capacity” that is absolutely worthy of protection.

“Continuous war pushes costs higher and higher”

When asked about the cost of rebuilding Ukraine, Gorodnichenko responded emotionally: “The ongoing war is pushing the costs higher and higher. Given the countless numbers of dead, wounded and traumatized people, it is even more difficult to figure them out.”

At the beginning of April, six weeks after the Russian war of aggression, the CEPR scheme concluded that an estimate of 200-500 billion euros was to be made. Gorodnichenko said that now this initial estimate should be corrected to €1 trillion.

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There is no doubt about the historical dimensions of the reconstruction. Yuri Gorodnichenko not only highlighted the Marshall Plan, for the sake of which the United States gave 2% of its GDP at that time (today 450 billion US dollars), as a “success story”. Despite the strategic errors, this also applies to German reunification, which will cost a total of two trillion euros.

And also for Poland’s EU integration with €160 billion European investment in its first 15 years of membership – “a kind of Marshall Plan for Poland,” says the CEPR paper.

Marshall Plan Model, Negative Example for Afghanistan

Gorodnichenko cites international programs for the reconstruction of Afghanistan and Iraq as negative examples characterized by “unrealistic timetables, lack of public perception, corruption, insecurity” or “interagency competition, lack of participation by local authorities and inability to absorb aid.”

Devastation like World War II: An aerial view of the village of Previlia in Donbass from June 14, 2022.Photo: Aris Messinis / AFP

For Afghanistan, it is also true that international efforts there with the withdrawal of troops and the return of the Taliban regime must ultimately be considered a failure.

According to the CEPR report, the situation in Ukraine is completely different, which was also emphasized by Yuriy Gorodnichenko and members of the discussion group at Humboldt University. The country has developed into a stable democracy, and its political system functions even in times of war.

[Alle aktuellen Nachrichten zum russischen Angriff auf die Ukraine bekommen Sie mit der Tagesspiegel-App live auf ihr Handy. Hier für Apple- und Android-Geräte herunterladen.]

Alexander Rodniansky, a professor of economics at Cambridge and an adviser to the Ukrainian president, asserts that the situation will remain so after the war. When asked several times about the problem of corruption, he cited “significant progress” such as the creation of special law enforcement agencies and a national anti-corruption agency. “We are at the European level in this matter today.”

Gorodnichenko is also courting confidence. In contrast to the Marshall Plan, an EU initiative is required for Ukraine: in order to raise and distribute funds – mostly in the form of donations and not as loans to prevent the debt crisis – an “independent and EU-authorized reconstruction agency” must be created.

It is essential that Ukraine “own” its own reconstruction programme. At the same time, binding parameters and close monitoring of the program must be agreed with the European Union, according to Gorodnichenko.

In this way, the reconstruction will also become a program of rapprochement with the European Union. Monika Schnitzer, Professor of Comparative Economic Research at LMU in Munich, Economics and currently guest at Heliopolis University, campaigned for better management of expectations towards Ukraine: accession will come “not in two years and not in five years”, but on the way thereafter. Schnitzer, “There will be many opportunities and programs for Ukraine.”

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