A heavily damaged building in Sievierodonetsk, Lugansk, July 1. Photo: Reuters

It will cost 750-770 billion USD to rebuild Ukraine, according to a Ukrainian government report delivered at the Ukraine Recovery Conference in Lugano, Switzerland, on Monday. This huge number is many times the size of most economies in the world. But it’s not the sole challenge facing Ukraine's reconstruction.

Big challenges

In his opening conference remarks, Ukraine's Prime Minister Denys Shmyhal said the financial cost of rebuilding his country would amount to at least 750 billion USD. In an address televised to the conference, President Volodymyr Zelensky said the reconstruction of Ukraine is a "common task" of the democratic world.

That much money will require generous contributions from rich countries, who themselves are struggling with high inflation and raw material price hikes, so nothing is guaranteed.

The reconstruction of Ukraine must take into account repatriation and stabilization of life for more than 10 million Ukrainians who fled their homes. Not to mention the fact that as the war goes on, more Ukrainians will be displaced and more infrastructure will be destroyed. Simon Pidoux, the Swiss ambassador in charge of the conference, said it is too early to try to estimate all the needs. He said “The effort will last for years if not decades.”

Countries join a meeting on the reconstruction of Ukraine in Lugano, Switzerland, July 5. Photo: AFP

Solutions and prospects

A notable result of the Ukraine Recovery Conference was the Lugano Declaration, in which 40 countries and international organizations like the European Investment Bank and the Organization for Economic Co-operation and Development (OECD) pledged political, financial, and technical assistance to Ukraine’s reconstruction. But no specific amounts were pledged.

Western politicians are calling for the confiscation of assets of the Russian government and oligarchs abroad to finance the reconstruction of Ukraine. Since Moscow launched a special military operation in Ukraine on February 24, Western countries have frozen 300 billion USD of the Central Bank of Russia’s foreign assets and confiscated yachts and real estate of Russian tycoons. The US House of Representatives has passed a bill to sell some of the confiscated properties and the Biden Administration plans to use the frozen assets of the Central Bank Russia to help Ukraine. That idea is endorsed by the EU High Representative for Foreign Affairs and Security Policy Josep Borrell.

But there is some opposition within the West. At the conference, Swiss President Ignazio Cassis warned of negative consequences if frozen Russian assets are transferred to Ukraine. He said "the right of ownership, the right of property is a fundamental right, a human right," adding that those rights can be violated only if a proper legal base is created.

Many others agree that all solutions and actions must be based on international law. For any reconstruction plan to be viable, the most important task now for all stakeholders and the international community is to promote negotiations, intensify diplomatic efforts to end the conflict as soon as possible, and restore the peace and stability needed in Ukraine.