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Ukraine maps US$750B postwar recovery plan

More than 40 nations and international organizations signed onto a roadmap for Ukraine's recovery with longterm financial, political and technical support.

Ukraine's President Volodymyr Zelenskyy on a tour of the Mykolaiv and Odesa regions
Ukraine's President Volodymyr Zelenskyy on a tour of the Mykolaiv and Odesa regions (AN/President of Ukraine)

BERN, Switzerland (AN) — More than 40 nations and international organizations signed onto a roadmap for Ukraine's recovery that aims to provide the war-torn nation with longterm financial, political and technical support.

The Lugano Declaration emerged on Tuesday at the end of a two-day Ukraine Recovery Conference hosted by the governments of Switzerland and Ukraine in the Swiss southern city of Lugano, close to Italy.  A follow-up conference in 2023 to be hosted by Britain already is in the works.

Diplomats committed their nations and organizations to carrying out a recovery plan from 2023 through 2035 that Ukraine's Prime Minister Denys Shmyhal says will cost US$750 billion and could be largely paid for using the "confiscated assets of Russia and Russian oligarchs."

Included in the declaration are seven "Lugano Principles" for reconstruction: partnership, focus on reform, transparency, participation, multi-stakeholder engagement, equality and sustainability.

"What we have achieved over the last two days lays the groundwork that will, in the long term, allow for more than just the reconstruction of a battered country's infrastructure and the restoration of its people's livelihoods," said Swiss President Ignazio Cassis, who hails from Switzerland's Italian-speaking region.

"Our work prepares for the time after the war, even as the war is still raging. This should give the people in Ukraine hope and the certainty that they are not alone. Because Ukraine's sustainable recovery requires revival, resilience, and renewed institutions fit for the future," he said.

Cassis hosted Shmyhal, British Foreign Secretary Liz Truss and European Commission President Ursula von der Leyen along with representatives of the International Monetary Fund, Organization for Economic Cooperation and Development, United Nations, World Bank and European Investment Bank. The heads of the three U.N. agencies for global development, health and refugees also attended.

U.N. Secretary-General António Guterres told the conference in a video message that the world body is "committed" to supporting Ukraine's government and advancing its recovery and redevelopment. "This is a long road — but it must start now," he said. "This is our common obligation. Together, let us stand with and support the people of Ukraine through these dark days — and build anew."

The United Nations, hundreds of other organizations and Ukraine are reaching almost 9 million people with life-saving aid, said Guterres, and their aim is to help millions more in the coming months while also reducing the threat of unexploded ordnance, landmines, and cluster munitions and preparing the groundwork for the reconstruction and repair of critical infrastructure.

"Russia’s war in Ukraine has taken thousands of lives and forcibly displaced millions of people. Millions of Ukrainians have lost their livelihoods – and 90% are at risk of falling into poverty," he said. "The damage and devastation to homes, schools, hospitals, and other critical infrastructure will take years to rebuild."

A three-stage plan

Shmyhal's presence at the Swiss-hosted conference and a video message from Ukraine's President Volodymyr Zelenskyy on Monday provided the focal points for hundreds of diplomats from the dozens of nations, international organizations and financial institutions seeking to rebuild Ukraine once it repels Russia's military onslaught.

Zelenskyy, speaking by video link from Ukraine's capital Kyiv, told the conference that the planned reconstruction effort — like the fight to vanquish Russian forces more than four months into a devastating war — should be viewed as a shared struggle and a top priority for democracies the world over.

Shmyhal, on a rare trip outside his nation's borders, said the direct damage to Ukraine's infrastructure caused by Russian attacks exceeds US$100 billion, based on an electronic map used to record all the damage caused by the war that citizens help to document.

But the price tag for the entire three-stage recovery process that the Ukrainian government plans will likely cost three-quarters of a trillion dollars and Ukraine's leaders "believe that the key source of recovery should be the confiscated assets of Russia and Russian oligarchs" estimated at US$300-500 billion, he said. “The Russian authorities unleash this bloody war. They caused this massive destruction and they should be held accountable for it."

The first stage of the plan, Shmyhal said, would focus on rebuilding basic needs such as clean drinking water supplies and bridges, followed by a second "fast recovery" stage to put up new homes, medical facilities and schools and a third stage looking at long-term needs that would help create a 21st economy powered by digital infrastructure and clean energy.

In Swiss banks alone wealthy Russians have stashed between 150-200 billion Swiss francs (US$155-210 billion), according to the Swiss Bankers Association's estimates. The money reflects Switzerland's status for more than three decades as "a magnet for Russian billionaires close to Vladimir Putin," says Swiss research and advocacy group Public Eye. "The war in Ukraine has called all of this into question. After rolling out the red carpet for them, Bern decided to apply the same sanctions as the European Union, launching a hunt for Russian assets."

Though it is not part of the European Union, Switzerland made a rare departure from its longstanding policy of neutrality and mostly joined the 27-nation bloc's sanctions against Russia. Switzerland has blocked 7.5 billion Swiss francs (US$8 billion) in Russian assets so far, according to Swiss economic officials. Globally, a consortium of news organizations tracked US$17.5 billion in assets held outside Russia linked to some of the country’s oligarchs and top officials.

An 'almost impossible' scenario

At the conference, Cassis drove home the impact of the largest armed conflict in Europe since World War II.

"What binds all of us in this room together is the desire — in this time of horror, wanton destruction and grief — to provide the people of Ukraine with the prospect of a return to a life of self-determination, peace and a bright future. That road is long, but it is never too early to prepare for the time when the weapons fall silent," said Cassis.

"Until recently, the prospect of war on this scale on European soil against a sovereign country, against fundamental civil liberties and against humanity seemed almost impossible," he said. "Our attention was focused on other pressing matters facing the international community and the planet. But Russia’s act of aggression against Ukraine has forced us to unite and face up to this war with all the determination that we can muster, and to commit ourselves to supporting the sorely tried Ukrainian people on the long road to sustainable recovery."

Truss said Ukraine’s recovery from Russia’s war of aggression will be "a symbol of the power of freedom and democracy over autocracy" and will show Russia's President Vladimir Putin that his attempts to destroy Ukraine have only produced a stronger, more prosperous and more united nation. "This needs to be a new Marshall Plan for Ukraine," she said, "and it needs to be driven by Ukraine itself."

With the European Union approving Ukraine’s request to become a formal candidate for joining the 27-nation bloc through an accelerated path towards membership, von der Leyen emphasized that Ukraine can prevail and rebuild with Europe's support.

"We all know the scale of destruction is staggering. And costs are rising with each day of this senseless war. This is also true for social costs. Victims, veterans, women, children, they are coming back from exile, that is good – but Ukraine will have to care for them. Ukraine will have to restore business confidence and attract more capital from abroad. Ukraine will have to improve living standards for its citizens," she said.

"And Ukraine will advance on its path towards the European Union. The challenges are huge, without any question — but they are not insurmountable," said von der Leyen. "The Kremlin's goal is the military, political and economic destruction of Ukraine. They want to undermine Ukraine's very existence as a state. We cannot and we will never let that happen."

As Russia targets residential buildings with tanks and artillery and shells entire city blocks, Zelenskyy said, it has turned more than 12 million Ukrainians into refugees and destroyed 2,102 educational facilities in Ukraine, including kindergartens, primary schools and universities — and likewise obliterated 799 hospitals and other medical facilities between late February and the end of June.

"Russia's war against Ukraine is not just an attempt to seize our land and destroy our state institutions, break our independence. This is a much broader confrontation," said Zelenskyy.

"The anti-democratic and anti-European system built in Russia is trying to prove that it is supposedly stronger than all of us: Ukraine, Europe and the democratic world," he said. "It is trying to prove that Europe is allegedly weak and allegedly unable to defend its values. Such a worldview motive can be traced in all the actions of the Russian state, both in relation to Ukraine and in relation to all of you."

For many, lives are lost or shattered, dreams are gone, he said, and it will be very difficult for many people to ever again have a feeling of being able to return to a real home.

"With this aggression, Russia wants to prove that it supposedly has not just territory under its control, but life as such, and that it can supposedly decide for everyone whether they will have life at all," Zelenskyy said.

"Therefore, this war is not just ours, not just a local one somewhere in the east of Europe. No," he said. "This is Russia's attack on everything that is of value to you and me. Therefore, the reconstruction of Ukraine is not a local project, not a project of one nation, but a joint task of the entire democratic world, of all countries, certainly all countries that can say about themselves: we are civilized."