After the widespread destruction Russia's invasion has brought, rebuilding Ukraine's economy and infrastructure is essential. Image: REUTERS/Umit Bektas
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- Over 30% of Ukraine's infrastructure has been damaged since Russia invaded the country in February 2022.
- 7.8 million people have fled the country — we must begin work now to bring them back and rebuild Ukraine's critical infrastructure and wider economy.
- But the reconstruction of Ukraine, if done right, will deliver Europe a trustworthy, reliable and prosperous partner, with abundant natural and renewable resources and a future-ready population.
Ukraine has been severely damaged by Russian aggression. Over 30% of infrastructure has been damaged and entire cities destroyed. 7.8 million people fled the country, and roughly the same number of children have been seriously affected by the unavailability of schools, hospitals and energy.
While Ukrainians are heroically defending their freedom and values, it is crucial to create a vision of a new successful state with a growing economy, sustainable energy and inclusive infrastructure.
Inclusivity is particularly important. Thousands of Ukrainians have already received long-lasting injuries as a result of Russian attacks on residential areas — many of them will need to continue their life and work with disabilities.
We have a moral obligation to nurture hope for these people and to help them stay strong as they go through the hell of war. Doing so will also encourage Ukrainian refugees to return to their homeland.
Resilience is key in Ukraine's future economy
In order to survive, Ukraine’s economy needs to grow resilience in the short-, medium- and long-term. In the short-term, including during the war, Ukraine needs to attract investment to restore critical infrastructure, decentralised energy and increase interconnectivity with the EU to supply food, fuels and commodities.
In the long run, Ukraine has the potential to transform into a new, technological and green economy — making this happen is critical to the country’s recovery from the Russian aggression, and the peoples’ recovery from the trauma of war.
Having abundant natural resources, Ukraine can support the green transition of Europe and bolster the continent’s energy security. In particular, the country can supply solar, wind and hydroelectric energy, as well as hydrogen green steel and batteries, while also producing safe and high-quality agricultural products that would strengthen Europe’s food security.
It is imperative to ensure that the Ukrainian economy remains competitive. This means reducing its carbon footprint and cutting pollution while nurturing its energy independence. It also means rebuilding the required production facilities with energy-science technologies, developing clean transport and ensuring the availability of charging infrastructure. We also need to responsibly utilise natural resource potential and provide Europe with the commodities required for the green transition — including lithium, cobalt, titanium and more, all of which Ukraine has at its disposal. Finally, it is crucial to integrate European food, energy and industrial value chains in the new green economy.
The right financial tools for Ukraine's recovery
Special financial tools should be developed and implemented to restore Ukraine. These tools must be designed to achieve the goal of accumulated international aid — to develop a fast, technological, green and inclusive economy. This economy must create workplaces and incentives for refugees to come back and build a resilient state on the global front line between democracy and autocracy.
Green development banks, financial institutions, special funds, green bonds, public-private partnership, model cities and industrial parks must be designed to channel reconstruction funds in the right direction. It is vital to create financial infrastructure inside Ukraine, to give second life to stock and commodities exchange, update banking and financial regulations to fit the UN’s Sustainable Development Goals and create effective risk management and supervision for reconstruction finance.
An industrial and technological nation
Ukraine must increase the economic complexity of production in key industries and integrate it into EU value chains as a part of its wider European integration. This means a shift from raw material extraction and export to more technologically advanced, added value production, such as electronics, vehicles and machinery — all with a focus on lower carbon emissions.
One example could be green industrial parks. If located in the right places, around the capital Kyiv — in order to leverage IT skills — these parks have the potential to scale economic growth and create an incentive for refugees to return. Decentralised and economically independent regions are also key to regional development, which is critically important in times of turbulence.
A European and Ukrainian future free from ‘fossil fuel dictatorship’
Ukraine can offer Europe and the world leading gas infrastructure and storage, and a hydrogen hub facility. Decarbonisation must be a central idea of Ukrainian reconstruction to build a future-proof, green economy. Russia’s invasion of Ukraine already appears to be accelerating the global shift to green energy, but in the short term it is proving to have serious consequences for energy prices and market structures.
Investments in renewables and hydrogen are crucial for energy security. Ukraine could help Europe to rid itself of unreliable and politically-charged Russian fossil fuels, by transforming itself into a green energy, hydrogen-ready, production and storage hub. Rapid technological development is making renewables more affordable and widespread. Green finance is hugely important to establish the financial foundations of a sustainable economy — this is particularly important for Ukraine’s many young and ambitious entrepreneurs, who have historically struggled to raise project finance.
How is the World Economic Forum supporting refugees?
We in Ukraine and people around the world are all experiencing difficult times: constant nuclear threats, energy blackmail, food crises everywhere, broken supply chains and other social and economic challenges.
Ukrainians are fighting, and sadly many are making the ultimate sacrifice, for democratic values at the fault line between good and evil. The outcome of the war — which increasingly points unequivocally toward a hard-won Ukrainian victory — will be a turning point for global democracy.
But we must live up to the sacrifice that so many Ukrainians and their families have made since February 24th, 2022.
We must ensure that Ukraine becomes a flourishing example of the good of democracy, peace and development. To do that, it is essential that Ukraine’s reconstruction is inclusive, green and technology-driven.
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The views expressed in this article are those of the author alone and not the World Economic Forum.
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