The cost of Ukraine’s reconstruction after the country’s devastation by Russian forces will be colossal. Ukrainian officials have estimated it at a potential $600 billion, with some saying that is a modest figure and set to increase as the war drags on.
International financial institutions have stressed the need for something like a Marshall Plan for Ukraine, involving billions in grant money from allied countries. But faced with the prospect of years of debt put on their own citizens to rebuild a country that isn’t theirs, some governments are reluctant to sign on.
The solution? Russian money, says Ukrainian Foreign Minister Dmytro Kuleba.
“I don’t think that American, German or any other taxpayers in the world should have to pay for what Russia did. There is an alternative way to recover Ukraine, (that) is to make Russia pay for it,” Kuleba told CNBC’s Hadley Gamble during a panel session at the World Economic Forum in Davos, Switzerland.
The idea has already been floated by several countries, and in late April, Canada announced it was creating legislation that will enable it to redistribute seized Russian assets to compensation and rebuilding efforts for Ukraine.
That would make Canada the first G-7 industrialized country to allow such seizures, and it is encouraging allies to follow suit.
“Seizure and transfer,” Kuleba said on Wednesday. “This is why European Commission has recently come up with certain initiatives on how to create a legal framework for that — Canada passed a piece of law that allows not only the seizure of assets but also the transfer of those assets to projects associated with the recovery of Ukraine. Make Russia pay for it!” he emphasized.
German Finance Minister Christian Lindner said in mid-May that the measure remains a possibility, but that no joint decision has yet been made among G-7 members. Earlier this week, Lithuania, Latvia, Estonia and Slovakia announced their intention to call on the European Union to fund Ukraine’s rebuilding with frozen Russian assets.
“Why everyone is trying to be merciful with Russia?” Kuleba said. “Why some countries or leaders or politicians are concerned that we should not go too far in putting pressure on Russia? Putin betrayed even those who tried to help him by launching a large-scale aggression against a sovereign country, the aggression that will go into textbooks as the most apparent example of an aggression of one country against another. Make Russia pay for it.”
The World Bank estimates Ukraine’s economy will be cut in half by the end of 2022. Crucial ports and export lanes are being blocked by Russia, which risks sparking a global food crisis as Ukraine is a major source of agricultural produce for much of the developing world.
Kuleba’s comments came as Russian forces pound Ukraine’s eastern Donbas with heavy artillery, which has destroyed almost the entire region.
Ukraine’s President Volodymyr Zelenskyy has said the situation in the Donbas in eastern Ukraine is “very difficult” with Russian forces concentrating their fire and manpower on assaulting the region and seizing key cities there.