Even though the war in Ukraine shows no signs of ending soon, attention is already (and rightly) being paid to what it will take to rebuild Ukraine for the long-term. Recent estimates on the cost of rebuilding the country range from tens of billions of dollars to more than one trillion dollars. Providing immediate and continuing financial support—with appropriate caution and monitoring—and attracting foreign investment are critical to the country’s long-term prospects. Western governments and private capital firms are now engaged in financing and advising that effort. The International Monetary Fund has likewise just announced a major funding package to provide macroeconomic and structural support.
Ukraine’s future economic health is not just a Ukrainian concern. A vibrant, healthy, productive Ukraine will be a more valuable ally and partner for the EU, NATO, and the United States. A weak Ukraine that is unable to recover from the destruction visited upon it by the Russian military will be a vulnerable target for future Russian aggression. Investing in Ukraine’s economic and political future is therefore just as important as investing in its present defenses—hence the large sums foreign countries and international organizations are offering to help prop up the Ukrainian economy.
Where should these funds go? Obvious candidates are repairs to vital infrastructure targeted by the Russians such as the electrical grid, the railroad network, and damaged industrial plants, as well as clearing mines and unexploded ordnance. Even though Ukrainians have shown incredible resilience and bravery in restoring public services while literally under fire from Russian missiles and artillery, much more will be needed to bring these essential functions fully back online, especially as economic activity picks up after the war.
But investment in people is also clearly necessary. Although not usually seen as such, societal wellbeing, often referred to as human security, is an important determinant of national power and political stability that both contributes to and is enhanced by economic growth. Allocating significant portions of foreign assistance to basic needs such as housing, education, and healthcare will do much to help promote Ukraine’s prospects.
This will not be easy. Ukraine’s earnest bid to join the EU, appropriately seen as a key to the country’s future viability, is complicated by the fact that even before the war it lagged behind other European countries in terms of health and mortality, income, and education. Ukraine’s Human Development Index ranks behind every member of the EU and even behind Belarus, closer to Bosnia and Herzegovina, China, and Iran.
As far as human security needs are concerned, restoring or building housing is now vitally important. Ukraine’s housing stock has incurred severe damage as Russia has tried to demoralize the population. One estimate put the monetary damage to residential buildings at $50 billion, or a third more than to transportation infrastructure and five times more than to the energy system. In January, the Ukrainian government estimated that over 2.4 million people were living in damaged or ruined properties.
So it is not surprising that in a recent survey we found that Ukrainians ranked housing as their top priority for recovery, ahead of national security and energy. Further, in an encouraging sign that the country as a whole understands the importance of restoring the housing sector, the focus on housing was shared by residents across Ukraine, even in areas relatively unscathed by the war.
While housing is the top priority, rebuilding or expanding schools and hospitals should be close behind. With our colleague Cynthia J. Buckley, we found that Russian attacks on these facilities dated back to 2014 when Moscow first attempted to seize territory in eastern Ukraine. Such incidents have expanded dramatically since the beginning of full-scale war in February 2022, including attacks on such targets as a maternity hospital in the devastated city of Mariupol and another against a school in the Luhansk region that killed 60 civilians.
There are signs that international donors understand the need to restore and grow Ukraine’s capacity to educate and attend to the health needs of its population. Within the last three months, the European Union agreed to provide $110 million to rebuild damaged schools, while the World Bank announced a new basket of $2.5 million to support government services to the people of Ukraine. Yet, given the damage already incurred, considerably more will be required to make the country whole and ensure it doesn’t overly rely on foreign assistance in the long-term.
Complicating matters further is Ukraine’s longstanding problem with corruption. The country is ranked at about the same level as Algeria, Zambia, and El Salvador. Ukrainian President Volodymyr Zelensky has made the fight against shady dealings at all levels of Ukraine’s government, business sector, and institutions a priority, despite the exigencies of the war against Russia. Calls for monitoring reconstruction funds are therefore warranted, with the understanding that Ukrainians should be the primary decision-makers when it comes to end uses. Indeed, the Ukrainian government has made plain its determination to minimize any misappropriation of funds and is cooperating fully with oversight by European and other donors. The United States, for its part, has mandated a joint oversight program by the inspectors general of the State Department, Defense Department, and Agency for International Development, which report regularly to Congress on the public on how American aid is being spent.
Ukrainian economic links with Europe will be key to its independence, just as much as independence will be key to its economic links to Europe. Recent polling shows that 87 percent of Ukrainians are now in favor of joining the EU—a prospect that became more likely when the country was awarded candidate member status in June 2022. Meanwhile, the EU has been increasingly more proactive in its engagement with Ukraine, and the Ukrainian government has redoubled its efforts to advance its candidacy. But to make Ukraine a European state in human security terms requires rebuilding and enhancing the country’s societal infrastructure. Ukrainians, who in the midst of vicious attacks on their homes and livelihoods have shown stalwart resistance to Russia’s aggression and have redoubled their commitment to freedom and democracy, deserve nothing less.
