Ukraine wants Russia to pay most of its $750bn ‘Marshall Plan’ 

Ignazio Cassis (left) and Denys Shmyhal (right) during URC, held 4-5 July in Lugano. (Credit: A. Elci)

Reconstruction was at the heart of the Ukraine recovery conference, held 4-5 July in Lugano, Switzerland. Our Ukrainian correspondent, Liudmyla Makei writes on Ukraine’s plan to use confiscated assets from Russia and Russian oligarchs to finance Ukraine’s recovery.

At the Ukraine Recovery Conference in Lugano, Ukraine outlined its $750bn national plan to rebuild its crippled infrastructure and revive its post-war economy.

On Monday 4 July, prime minister Denys Shmyhal presented his “Marshall Plan for Ukraine”, demanding that a big part of the investments should come from the “assets confiscated from Russia and Russian oligarchs” and that Moscow needs to “bear responsibility.”

His presentation marked the first public announcement of the 10-year restoration plan in which Ukrainian authorities aim to implement 850 projects and grow the country’s national GDP annually by seven per cent.

Ukraine is also hoping for grants and credits from its international partners. Funds from the private sector would need to be used along with the off-budget finances from corporations, and funds from the state budget of Ukraine.

The head of the office of the president of Ukraine, Andriy Yermak, stated that the sooner a mechanism for Russian money in the recovery is enforced, the smaller the financial burden on Ukraine’s partners will be.

The idea of using frozen Russian assets to fund the recovery won the endorsement of some countries, including the UK, but was met with resistance by others. Swiss president, Ignazio Cassis, said the proposals would set “a dangerous precedent” and that protection of property rights was fundamental in a liberal democracy.

‘Our values cannot be ruined’

President Volodymyr Zelenskyy was not present at the opening ceremony for the conference in Lugano. He remains in Kyiv but recorded a video address for the event participants, noting that rebuilding Ukraine is a task for “the entire civilised society”.

“We’re offering our own national recovery plan, which can become the basis for implementing every initiative and idea, as well as for using the money allocated to the reconstruction in a fully rational way that is in Ukraine’s interests,” Zelenskyy stated.

“Rebuilding Ukraine will be the biggest investment possible into the maintenance of global peace. We can prove that the democratic world is stronger, Europe is more powerful, and our values cannot be ruined.”

The president also made a slight dig at the Ukrainian officials who are outside of the country.

“I haven’t seen them in all these months of the [all-out] war. I would really like to invite them [here] because we are reconstructing Ukraine… I wanted to remind them that,” he said.

Not everybody was able to attend the conference in Lugano. For example, the mayor of Chernihiv in the north of Ukraine, Vladyslav Atroshenko, was stopped from crossing the Ukrainian border twice.

“Without any grounds, I was denied a business trip to Switzerland where a recovery conference is taking place for Ukraine and the Chernihiv region specifically,” Atroshenko wrote on Facebook.

The Ukrainian government also had to considerably shorten its list of attendants.

However, despite these hurdles, the pundits are optimistic about the potential of rebuilding Ukraine using common funds. Not only does this concern the financial resources, but also the transformation of the Ukrainian state and the preferences for Europe and the rest of the world.

Maxim Gardus, an expert with the Reforms delivery office of the cabinet of ministers of Ukraine, noted that Ukraine attracts investors with its geographical location.

“Suez Canal showed how everything can be inconvenient,” Gardus said. “many production facilities can be relocated to Ukraine, it has all the conditions for that”. He also added that the country is full of rare earth metals, and provides a good alternative to south-east Asian countries.

But reconstruction is not just about the industry, it’s about technology too as the vice prime minister of Ukraine and minister of digital transformation, Mykhailo Fedorov underlined. He presented Digital4Freedom at the conference, an international initiative for a speedy reconstruction and development of Ukraine through innovation and digitalisation. The minister asked companies such as Microsoft, Rakuten, Apple, Amazon, Google, IBM, Palantir, Mastercard, and Visa to offer a digital lend-lease to Ukraine.

‘We need to search for investors’

The experts always reiterate that any plans to rebuild Ukraine must be concrete. Some may ask: “Is it not too early to speak about reconstruction when the war is ongoing?”

Maksym Yakovlev, heads the department of international relations as well as the School of Policy Analysis in one of Ukraine’s top universities – National University of Kyiv-Mohyla Academy says that it’s not. “As was stated in Lugano several times, the post-war reconstruction process will be better and more effective if you think about and do the things that are already possible now”.

“Planning to rebuild Ukraine and bringing those plans into action in key directions is an important and topical subject. Not least because we already need to search for investors and potential executors of specific tasks and projects.”

In her address to delegates at the conference, Ursula von der Leyen, said the European mission has a “special responsibility” to help in the reconstruction of Ukraine and a “strategic interest.”

A statement from the head of the European commission about Ukraine needing “brave reforms” was more than just the quote of the day. It was also a quintessence of future transformations. These include the judicial reform and anti-corruption fight – some of the most important parts of Ukraine’s “homework” as a candidate state for the European Union.