[REPORT] Financial, performance and organizational issues of reconstruction of Ukraine

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Since the publication of our report on the reconstruction of Ukraine (in the fall of 2022), the country’s situation has changed. The concepts for the reconstruction operating model are becoming increasingly clear. State governments, international organizations and companies are slowly preparing for this major project, so this is the perfect time to follow up on our previous publication. Despite the more and more sophisticated plans, the overarching goal of peace has still not been achieved. The definitive borders of Ukraine are still unknown, as well as the terms of a possible peace treaty or truce. Unfortunately, a war of attrition is underway, where neither one side nor the other wants to give up the fight. Each day of military operations costs Ukraine about $100 million, and its economy is holding on only through international support and dependent on help from Western partners. Partners with strict requirements for the shape and direction post-war Ukraine should take.

In almost all scientific studies, as well as post-conference documents, there is an apparent emphasis on renewable energy sources and increasing their importance in the country’s energy structure. The Ukrainians themselves have nuclear power plants, still a legacy of the Soviet Union, and significant gas deposits. There is a lot of discussion in international relations, as well as reconstruction plans presented by Ukraine, about the use of natural gas in crafting its future. Reluctant to the idea are international institutions, which believe that Ukraine should conform to the European Union’s “Green Deal.” They leave the natural resources they own almost irrelevant.

This report is one of the most synthetic and specific studies addressing the topic of reconstruction in Ukraine. It provides an overview of past activities and proposals from international organizations and research centers. It also includes its own proposals, and points out flaws in existing publications on the issue of Ukraine’s reconstruction.

We also highlight that with the prolonged war in Ukraine, Poland’s chances of playing a significant role in its reconstruction process are diminishing. The spontaneous support of the Polish public raised hopes that major allies would be recognized as part of the reconstruction effort. Rationalism, as well as the stipulations made in Lugano, Switzerland, and later at the London conference, indicated that there would be no preferential sharing of the “cake” among the allied countries, and instead there would be tenders favoring large corporations with sufficient financial and substantive resources. The hope for Polish companies is to build the proper institutional environment to maximize the participation of Polish companies in the reconstruction. In this report, we have identified the activities of NGOs and the government to date, assessing the impact on Poland’s potential role in the reconstruction of Ukraine.

In addition, we have described the problems Ukraine is facing. Ukrainian media are increasingly reporting on the extent of corruption in the army and other sectors of state functioning. Despite the ongoing hostilities, the long-standing problem has not disappeared, and some analysts even say it has intensified. Ukraine’s challenges are not limited to financing aspects, but also to those related to demographics, or the demilitarization of the country. All the problems are described in more detail in the section “Challenges facing Ukraine”.

 

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