The Risks and Rewards of Planning for Ukraine’s Recovery Amid Ongoing War

Assessing damage and recovery needs during an ongoing conflict is a complex endeavor. Critical geographic areas with war-related destruction are difficult to access. Remote assessment methodologies, although improved in recent years, still leave much to the imagination. Communication with local counterparts is challenging, as is accounting for the compounding impacts of continuing violence on livelihoods, on displaced and marginalized populations, and on access to public services.

In comparatively short-duration conflicts such as Kosovo (1998-1999), Georgia (1991-1993), and Bosnia (1992-1995), post-conflict assessments produce durable agendas that orient domestic and international commitments addressing the aftermath of war. In long-duration conflicts such as Syria (2011-), Yemen (2014-), and now in Ukraine (2014-), interim damage- and needs estimates have a short shelf life, and the lines between ongoing relief, short-term fixes to critical infrastructure, reconstruction, and peacebuilding often blur as violence continues.

Continuing delays in recovery planning and commitments in Ukraine are illustrative of how decisions over what to do, how to do it, and the sequence of investments during unrelenting hostilities can fragment the international response and the coherence of host government leadership on near-term recovery. The climate of uncertainty in Ukraine aside, there are several near-term steps that will lay the groundwork for recovery assistance, reassure donors that remain apprehensive over recovery investments, and add momentum toward an eventual settlement to the conflict.

The Long War in Ukraine

The fact that Ukraine is now a long-duration conflict is often overlooked. The full-scale invasion of Ukraine in February 2022 is a continuation of instability and insecurity that began in March 2014 with the annexation of Crimea and fighting between Ukrainian forces and Russian-backed forces in the eastern oblasts of Donetsk and Luhansk. In the years that followed, disruptions of industry, transportation, and small- and medium-sized enterprises led to widespread job losses. Forced displacement and conscription created significant labor-market distortions. More than 14,300 people were killed as a result of war-related violence, with an estimated 1.41 million persons remaining internally displaced prior to February 2022.

The definitive interim damage and needs assessment of that pre-2022 period, conducted jointly in 2015 by the World Bank, the United Nations, and the European Union, estimated total recovery needs for infrastructure and social services at $1.56 billion. An additional $135.5 million was required for economic recovery, with an added $126.8 million assessed for social resilience, peacebuilding, and community security. These figures have now been eclipsed by the impacts of a new, more intense phase of the war beginning in February 2022.

Between February and June 2022, an additional 10,403 non-combatants were killed or wounded – a number the U.N. warns is incomplete and excludes totals from the country’s most besieged areas. More than 9.9 million residents of Ukraine have left the country, the overwhelming majority of them women and children – this of a total population of 44 million. The number of registered internally displaced persons (IDPs), including those displaced since 2014, has now reached 7.1 million.

The humanitarian situation is deteriorating rapidly along with access to critical services such as clean water, food, sanitation, and electricity, with 17.7 million people requiring humanitarian assistance. The World Bank predicts that the country’s economy will shrink by 45 percent and as many as 52 percent of citizens will live in poverty by the end of the year, up from 18 percent in 2021. A joint August 2022 World Bank, Government of Ukraine, and European Commission Rapid Damage and Needs Assessment (RDNA) puts aggregate losses in the country as of June 1, 2022, at more than $252 billion, with estimated reconstruction and recovery needs at $348.5 billion.

Table: Estimated Damage, Losses, and Needs by Sector as of June 2022 (US$ billion)

Source: Government of Ukraine, World Bank, and European Union, Ukraine Rapid Damage and Needs Assessment (August 2022)

“Damage,” “losses,” and “needs” are distinct categories in assessments of the impact of wars. Using the housing sector by way of example, “damage” refers to the estimated value at the time of destruction. “Losses” refers to the estimated value of household goods and rental income that are lost with the destruction of housing stock, for example. Staying in the same sector, “needs” refers to the cost of demolition and debris removal and reconstruction expenses, as well as measures to establish interim subsidies, repair and rental arrangements, means to adjudicate property and damage claims and provide winterization assistance, and to develop a housing recovery, reconstruction, and funding mechanism.

Measuring the Toll of War

While the Rapid Damage and Needs Assessment (RDNA) referenced above is but one more interim stocktaking exercise with the consequent shortcomings of assessments during active conflict, the effort did benefit from past experience. The RDNA reflects a growing recognition of the importance of leadership and engagement by a host government and local civic counterparts. Where this was absent (and difficult to accomplish) in Libya, Myanmar, Syria, and Yemen, subsequent obstacles made the implementation of a post-assessment roadmap more difficult. Where such engagement was present, as in Georgia (2008), Pakistan (2010), and Ukraine in 2014, local authorities and civil society actors helped to define priorities, endorse assessment results, and partnered in the recovery process. Host government cooperation is particularly helpful in controlling institutional competition over resources, in reducing bureaucratic inertia, in directing resources to common priorities, and in dedicating long-term expertise to reconstruction efforts. There is reason to believe this will be the case in Ukraine in the future, especially in the follow-up to the Ukraine Recovery Conference in Lugano, Switzerland, in July, where the preliminary findings of the RDNA were compiled and introduced by the Ukrainian government as part of its National Recovery and Development Plan.

The Ukraine RDNA also benefitted from years of discussion and refinements over which areas to include in such assessments. In addition to traditional measures of vanished economic potential and damage to a country’s essential infrastructure, the Ukraine RDNA and recent assessment in other countries includes measures of the debilitating psychological consequences of violence on former combatants and civilians, the legacy of explosive remnants of war, and the sacrifices associated with deferred education, healthcare, and livelihoods. Estimates of environmental impact and damage to cultural and “identity” infrastructure are also incorporated.

Often overlooked, however, and not included in the Ukraine RDNA or Kyiv’s roadmap introduced in Lugano, is a recognition of the need for peacebuilding and social cohesion initiatives, as well as estimated costs associated with developing and implementing a reform agenda for improved governance and accountability during recovery and reconstruction. Social cohesion indicators in Ukraine before February 2022 demonstrated a pronounced east-west split in the country and strikingly low figures for government legitimacy at all levels and in all oblasts.

Moreover, a July 2022 poll found that 84 percent of Ukrainians opposed any territorial concessions to end the war, including 77 percent in Ukraine’s east and 82 percent in the south, the two areas where most of the fighting now occurs. If an agreement ending the conflict entails an unpopular compromise or if reports of widespread corruption and oligarchical excess arise as recovery proceeds, the need to shore up the social contract will take on outsized importance. In a nation previously known for political volatility, politics will return.

Recovery Under Fire? 

In the meantime, there is the problem of what to do with the figures that emerge from such interim assessments of damage, loss, and needs and from Kyiv’s recently released recovery roadmap. The Lugano conference revealed a number of telling and common dilemmas inherent in planning recovery during ongoing conflict.

First, the conference resulted in agreement on seven “guiding principles” and the establishment of a political framework for further discussion, not an action plan for near-term disbursements and recovery initiatives, despite Kyiv’s insistence that recovery must begin now. Donors remain cautious about committing to anything beyond supporting Ukraine’s immediate survival needs and early recovery while the outcome of the war remains uncertain and the risk of further escalation remains high.

Second, no common vision emerged on when to invest in recovery, where to start, or how to invest responsibly. Instead, attendees pledged to continue discussion at an EU-sponsored reconstruction conference in October and in next year’s Ukraine Recovery Conference to be hosted in the U.K. In the meantime, updated damage and needs figures will be required at least every six months, as will efforts to further define and implement Lugano principles such as multi-stakeholder engagement, coordination of effort, gender equality, civic inclusion, and a focus on governance and accountability reforms.

Third, the conference exposed the discord that exists over how and whether to use the hundreds of billions of dollars in frozen Russian assets for Ukraine’s recovery and reconstruction needs. The Swiss expressed concern over due process and the precedent that such a move would set for international finance and the political economies of western nations. Kyiv and EU Commission President Ursula von der Leyen disagreed, with von der Leyen moving forward with legal preparations to justify the forfeiture of Russian assets.

Separately, the United States is weighing use of its International Emergency Economic Powers Act (IEEPA), tariffs, or funneling payments for Russian oil into escrow accounts. In total, the value of Russian Central Bank assets and property seized from sanctioned individuals is estimated between $330 billion and $400 billion. These are resources that could assuage the concerns of donors over the risks and magnitude of commitments required from their own treasuries. Yet, the challenges to converting such assets into recovery funding are substantial, and it will likely take years to navigate such a process, particularly the disposition of Central Bank funds. The threat of losing part if not all of the frozen Central Bank assets in question, however, may prove to be a powerful factor in any eventual negotiations with Moscow.

No Time Like the Present

There are several steps that can be taken now to expedite much needed recovery assistance to Ukraine. These are steps that will create a foundation for recovery and post-war reconstruction, engage the Ukrainian government in the recovery process, reassure donors that are apprehensive about recovery engagements amid ongoing hostilities, and contribute momentum to an eventual settlement process.

First, the Ukrainian government’s capacity to collect and process damage and needs assessment data requires strengthening. Ukraine is an outlier among states in conflict in that it retains an ability to assemble data and technical assessments of ongoing damage and needs – to a point. Technical expertise is required to help Ukraine Prime Minster Denys Shmyhal’s Platform for Ukraine’s Recovery develop the ability to track damage and needs on an ongoing basis, using the recent RDNA as a baseline. This Platform, an inter-ministerial technical working group producing recovery plans and implementation guidance, requires minor investments to attract expertise and enhance the Platform’s collection methodologies as well as its prioritization and reporting capabilities. A strengthened Platform will create a valuable public good for use in future recovery work. Twinning agreements with the World Bank and the EU as well as secondments of personnel from bilateral donor agencies will provide reassurance on the integrity of the Platform’s products and methods. Ukraine will benefit from the technological transfer and available expertise, while owning the planning process and managing internal competition among its ministries and regions.

Second, the Ukrainian government’s own capabilities to coordinate the recovery response should be reinforced. Coordination is especially difficult during conflicts where mixed humanitarian and recovery operations are underway. Early rebuilding efforts in Bosnia before the end of that war in 1995 were troubled by poorly aligned housing rehabilitation policies and disagreements over the conditionality of assistance. Failures in Sierra Leone, Liberia, Afghanistan, and Iraq illustrate the continuing challenge of duplication, waste, and poor sequencing of aid during and after conflicts subside. Coordination efforts in Ukraine are presently divided among humanitarian actors (loosely organized under the U.N.); NGOs and bi-lateral actors interested in short-term stabilization assistance (organized under a new German-managed coordination platform); and larger, reconstruction-minded bilaterals and multilaterals contributing to the World Bank’s Ukraine Relief, Recovery, and Reconstruction Trust Fund (URTF) and a planned EU-Ukraine Gateway Trust Fund. This partitioned arrangement, propelled by the structural biases of the assistance community, makes it difficult to apply a “triple nexus” approach of coordinated humanitarian, development, and peacebuilding assistance that Ukraine needs at this stage of the conflict.

One way to address this fragmentation is to assist Shmyhal’s Platform to not only collect damage and needs data (as described above) but to also track the commitments and activities of assistance providers and implementers and to develop prioritized, evidence-based recommendations for timely recovery activities. There is a precedent for this. Since 2019, Ukraine’s Ministry for the Reintegration of Temporarily Occupied Territories (MRTOT) has maintained an online data portal of assistance providers that are active in eastern Ukraine along with needs analyses, project lists, geographic location data, and recommendations for engagement. Significant technical assistance will be required to expand this portal as a foundation for country-wide coordination.

Third, Ukraine’s recovery and EU accession should be connected so that Kyiv’s EU aspirations can be an effective catalyst for progress on reform and recovery priorities. This will require mutual agreement between the EU and Ukraine on a reform agenda and the subsequent linking of disbursements to key reform benchmarks. Transparent procurement measures must also be established ahead of significant disbursements. Such procurement mechanisms can be developed now, enhancing Ukraine’s own online “Pro Zorro” procurement platform with options such as fixed-price contracts (with clear deadlines, specifications, and outcomes), framework agreements using pre-vetted vendors, and protections for whistleblowers. Such measures will help to reassure donors and citizens over corruption concerns.

Fourth, despite disagreements over whether and how to use frozen Russian Central Bank assets to rebuild Ukraine, an effort by the EU to prepare the groundwork for the use of these resources should continue. Several countries have deep concerns over the precedent that using such assets would set for the banking industry and the future of the U.S. dollar as a reserve currency. EU Commissioner von der Leyen counters that the comparatively easier path of liquidating assets seized from private Russian citizens should be expedited to increase pressure on the Kremlin while also pursuing the more complicated task of determining a way to rebuild Ukraine with frozen Central Bank funds. It is a sound approach. The realistic prospect of directing a portion, if not all of these assets to Ukraine’s recovery will grow in significance as sanctions continue to erode Russia’s economy.

Fifth, it will be important – and difficult – to maintain the remarkable social cohesion that Ukraine has shown since Feb. 24. Signs have already surfaced that solidarity is in danger of fraying as a result of Russia’s “soft annexation” of areas under its control – and that was even ahead of planned moves toward formal annexation. Whether by design or coincidence, these moves are reanimating pre-war tensions and paranoia over the political and cultural alignments of citizens in eastern and southern Ukraine. In several areas under Russian control, Ukrainian government personnel have been replaced with pro-Russian officials. Russian Federation flags appear over administrative offices. School curricula are being revised, marriage certificates are being issued under the authority of the Russian Federation, and Russian passports are being distributed to residents. In Melitopol and Kherson, the Russian ruble has replaced Ukrainian currency. Local and regional media broadcast pro-Kremlin content, and newly arrived Russian authorities are offering food packages and concessional rates for Russian mobile operator plans.

A protracted conflict along a hardened line of division, increasing hardship as winter approaches, and a torrential flow of disinformation may reduce social cohesion in the country to its pre-war lows, when Kyiv politicians and war veterans talked of “walling off” the seditious “separatist territories” in the east while calling Ukraine’s President Volodymyr Zelenskyy “traitorous” for negotiating with the pro-Russian “peoples’ republics” of the region.

If these divisions resurface, settlement talks, recovery engagements, and consensus-building will become much more complex and politically unpredictable both inside and outside of Ukraine. Any “othering” of segments of the Ukrainian population should be avoided. Efforts to moderate references to citizens in the east and south, outreach via news and entertainment programming, continued administrative and social support, and a commitment to a “one Ukraine” narrative though civic activity and the pronouncements of government and foreign officials is crucial.

These near-term steps are only the beginning of commitments required to support Ukraine’s recovery. Done well, assessments of the country’s damage and needs during conflict will be essential to understanding the impact of the war — and to highlighting the urgent necessity of putting in place a foundation for effective assistance delivery. For Ukraine’s sake, there is no time like the present to overcome delay and hesitation in helping Kyiv reclaim its future.

(A report elaborating further on this article has subsequently been published by the Lauterpacht Centre for International Law at the University of Cambridge. It is available here.)

IMAGE: Volunteers clear the rubble of a house destroyed as a result of the shelling in the city of Chernihiv on August 20, 2022, amid Russia’s invasion of Ukraine. Russia’s withdrawal from Chernihiv in April, after a month-long assault, left behind a devastated city that will require massive foreign aid, and many years of work, to restore. (Photo by SERGEI CHUZAVKOV/AFP via Getty Images)