“Ukraine’s losses will amount to trillions of dollars” —  economist on the consequences of the war

The losses of Ukraine as a result of the full-scale invasion by the Russian Federation already exceed $700 billion, according to the government’s data. The amount has increased due to the constant Russian attacks on infrastructure objects. The European Commission estimates the losses at 600 billion euros.

Last year in September, Ukraine’s losses were 1.6 times higher than the GDP in 2021. According to the data from the Ministry of Economy, the decline in GDP reached 30.4% by the end of last year. At the beginning of the full-scale invasion, a decline of 40-50% in GDP was predicted.

All photos provided by Gazeta.ua

“After the end of hostilities, the amount of losses for Ukraine will not be in the billions, but in trillions of dollars. Every day, infrastructure, industry, and the economy suffer significant damage. The scale of the damage can be estimated only after the end of the war. Currently, the most important thing is to document the destruction on a daily basis. Meanwhile, we have a significant decrease in income and a decline in GDP,” economist Borys Kushniruk said.

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Since the beginning of the full-scale invasion, the housing stock, educational, cultural, religious, and sports institutions have suffered the greatest destruction. As of December 2022, the total amount of direct documented losses reached $137.8 billion, according to a report by the Kyiv School of Economics. Experts estimated the destruction of the housing stock at $54 billion. Overall, Russian troops damaged or destroyed 149.3 thousand residential buildings. Russia continues to destroy Ukrainian educational institutions. More than 3,000 have been damaged, with losses totaling $8.6 billion. Ukraine lost an additional $2.2 billion due to attacks on cultural, sports, and religious institutions.

Ukraine needs to seek compensation from Russia for the full value of the enterprise, including lost profits

Infrastructure losses amounted to $35.6 billion and industrial losses to $13 billion.

“The metallurgical enterprises in the eastern part of the country, in particular Azovstal, suffered the most. In international courts, compensation for the full value of the enterprise, including lost profits, should be sought from Russia. At least $10-15 billion can be expected. It is unlikely that the metallurgical plants will be rebuilt in the same form as they were before February 2022. At the same time, part of the processing industry will have to be created from scratch. For this, it is necessary to ensure conditions under which foreign investments will come to Ukraine,” said economist Borys Kushniruk.

Russian military destroyed or seized at least 64 large and medium-sized enterprises, 84,300 pieces of agricultural machinery, 31 boarding schools, and 44 social centers. Also, almost 3,000 shops, 593 pharmacies, 195,000 cars, 14,400 public transport vehicles, 330 hospitals, and 595 state and local government buildings were seized or destroyed.

Now Ukrainians consume significantly more electricity than before

“Despite rocket attacks, Ukrainians have electricity, water, and heat because our energy system is extremely extensive. During the Soviet Union era, Ukraine was essentially a key industrial base, with a large number of enterprises located there. Accordingly, an energy supply system was developed for them, which is difficult to destroy. Undoubtedly, the support of Europe plays a significant role in maintaining the energy system for sustaining life. At the same time, there is a human factor. Our specialists are directly restoring the destroyed infrastructure. However, after the war, the efficiency of Ukraine’s energy supply model will be a question to consider. First of all, it is necessary to understand that now Ukrainians consume significantly more electricity than before. Everyone has an electric kettle, oven, microwave, boiler, iron, hairdryer, and television. Therefore, during the construction of new housing, it is necessary to take into account much higher electricity consumption — not less than 7 kilowatts per unit. During Soviet times, about 2 kilowatts were allocated per apartment,” explained Borys Kushniruk.

See also: Decades and billions of dollars. When will Ukrainian fields and cities be cleared of Russian mines?

Most of the funds come from the United States, EU countries, Canada, and the United Kingdom

From the first days of the war, Ukraine has been receiving financial and military assistance from international donors. The largest amount of funding comes from the United States, EU countries, Canada, and the United Kingdom. According to the government’s data, the total amount of international assistance has already exceeded $23 billion. $4.8 billion was provided by the European Union, and $8.5 billion came from the United States.

“Currently, the government is managing to maintain the situation thanks to international aid. We simply would not have been able to withstand it without the military and financial assistance of our Western partners. We should talk not only about the destruction of enterprises, infrastructure, and lost income. We should not forget about human losses. Ukraine must demand compensation from the aggressor country for the losses inflicted on state property and the property of legal and physical persons. It is also necessary to pay for the lost human lives. International law knows how to assess property losses. However, it does not know how to determine the value of a person’s life. But this must be done. Otherwise, there will be more madmen who will solve new wars,” says Borys Kushniruk.

Western countries are proposing to develop a program for rebuilding Ukraine similar to the Marshall Plan, which the United States introduced after World War II to help European countries.

The West is interested in Russia’s defeat

“We don’t need to use the term ‘Marshall Plan’. It is associated with the United States. We need to talk about the ‘G7+’ plan. This refers to the seven largest economies in the world, plus other economies. Both European countries and European business will play a significant role in the recovery of post-war Ukraine. The West is interested in the defeat of the Russian Federation. After the war, the West will also demand compensation for losses associated with aid to Ukraine. In addition, European companies will not rebuild post-war Ukraine at their own expense. It will be done with the money that Russia will pay. Sanctions will help with this mechanism. They will remain in effect until the country that started the war compensates for all losses,” emphasized Borys Kushniruk.

Originally posted on Gazeta.ua. Translated and edited by the UaPosition – Ukrainian news and analytics website

See also: “You wanted it yourself.” What are the victims of violence by Russian military afraid of and what do they remain silent about?


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