Destruction and increasing needs for reconstruction. The amounts grow as the war in Ukraine lasts. More than a year after the start of the Russian offensive, international economic institutions continue to support the Ukrainian government.
411 billion dollars: the amount of reconstruction needs
According to an estimate published jointly on Wednesday March 22 by the World Bank (WB), the Ukrainian government, the UN and the European Union (EU), the reconstruction needs now amount to more than 411 billion dollars since the beginning. of the conflict. An unsurprising total up from the previous valuation of $350 billion, made at the end of October 2022.
These 411 billion represent more than twice the Ukrainian GDP in 2021, and even 2.6 times that of 2022, the year during which the national wealth contracted by 30%, according to the International Monetary Fund (IMF).
However, underlined Anna Bjerde, WB Vice-President for Europe and Central Asia, “the destruction did not continue at the same rate as that observed during the first three months of the war”, in particular because that “the heaviest fighting is concentrated in areas that have already suffered significant damage”.
The estimate published Wednesday could still be below reality, recalled the Ukrainian government, insofar as it does not take into account the regions currently under Russian occupation. “We thank the World Bank for its analysis, which will be an important tool for us and our partners in the launch of future recovery projects, which have already begun”, nevertheless commented the Ukrainian Prime Minister, Denys Chmyhal, quoted in a communicated.
15.6 billion dollars: the amount of the IMF aid plan
On Tuesday March 21, the International Monetary Fund (IMF) announced that it had reached an agreement to launch a $15.6 billion aid plan over four years, one of the largest currently underway within of the institution.
The objective of this plan is to “support gradual economic recovery while creating the conditions for long-term growth in a context of post-conflict reconstruction and on the road to accession to the European Union” (EU ), the Fund said.
110 billion dollars: the massive financial support of the Americans
An announcement that US Treasury Secretary Janet Yellen “welcomed”, adding that the United States “will continue to support the government and people of Ukraine as long as necessary” in the face of Russia.
Since the start of the conflict, the United States has provided massive financial support to the government in kyiv, granting it 110 billion dollars, more than half of which concerns material military aid. But several tens of billions of dollars have also been used to maintain the daily functioning of public services.
More than 20 billion: the amount already released by the World Bank
For its part, the World Bank has already released more than 20 billion dollars, in the form of loans or donations, with 18 billion having been disbursed. A significant part of these funds has helped to keep public services afloat and to pay the salaries of civil servants, as well as to provide care for the displaced in the country.
While the fighting continues, all the actors are already anticipating the reconstruction, which the economic institutions want to see start as soon as possible. They also estimate that the immediate needs in this area amount to 14 billion dollars this year, in order to make “critical and priority investments”.
“The international community and Ukraine have paid for many repairs, which were necessary to keep certain sectors, such as health, transport and energy, afloat”, underlined Anna Bjerde, who estimates at “around 500 ” Partially or fully rehabilitated health facilities.
According to the WB study, the needs are concentrated primarily in the transport, housing and energy sectors, which represent approximately 50% of the damage suffered by Ukraine during the first year of the conflict. And the reconstruction will be long: “Our estimate concerns the next ten years”, recalled Anna Bjerde.
As specified the New York Times, according to the World Bank, the destruction caused by war and the loss of livelihoods have plunged more than seven million Ukrainians into poverty, reversing 15 years of development. The share of the population living in poverty rose from 5.5 percent to 24.1 percent in the first year of the war, the WB said.
High inflation disproportionately affects low-income households, according to the WB study. In the Kherson region, prices for food and non-alcoholic beverages rose by 73.5% in December compared with prices a year earlier.