A year has passed since Russia invaded Ukraine causing widespread devastation and suffering in the country and rattling the world economy.
It is hard to imagine that a year has passed since Russia invaded Ukraine causing widespread devastation and suffering in the country and rattling the world economy. As a result of the invasion, 8 million more Ukrainians now live in poverty, undoing 15 years of progress. With rising numbers of housing units severely damaged, hospitals and schools destroyed, thousands of Ukrainians are spending these tough winter months amid frequent electricity and heating disruptions. I saw this first hand when I visited Ukraine back in November.
In the face of unthinkable destruction, the government of Ukraine and the country’s citizens have shown remarkable resilience . We all see the extraordinary courage and dedication to freedom from the Ukrainian people. Strong support from donor inflows, much of this having been channelled through the World Bank’s Public Expenditures for Administrative Capacity Endurance (PEACE) Project, has provided the necessary resources for Ukraine’s government to provide essential services to its people and mitigate macroeconomic risks.
Despite a significant drop in revenues, the government has maintained continuity in essential services to its citizens including those outside Ukraine, keeping schools and hospitals open and paying pensions as well as teachers’ and civil servants’ salaries. Supporting these critical services continues to be a priority, and Ukraine needs about $3-4 billion per month to sustain them. Bolstering Ukraine’s social and economic fabric and ensuring that the country maintains a functioning administration remain key priorities for the international community. Funds channelled through the PEACE Project have proven very effective in reaching 12 million Ukrainians with essential social services and support at these difficult times.
A long-time partner of Ukraine, the World Bank acted swiftly as the war broke out, mobilizing more than $18 billion to date. The funding was made possible through the generous contributions of our donor partners, including governments of the United States, UK, EU countries, and Japan. Our early assessment, completed in September 2022, estimated the cost of rebuilding Ukraine to be at $350 billion. An updated assessment reviewing the impact from a full year of war is due ahead of our Spring Meetings in April.
Increased attacks on Ukraine’s vital infrastructure, including roads, power plants and energy distribution networks require urgent repairs. Our assessment of the impact to the energy sector indicates that current damage to energy infrastructure is more than 5 times compared to June 2022.
With decades-long experience of working in countries affected by fragility, conflict and violence, we, at the World Bank, know that limiting human capital losses and strengthening the government of Ukraine’s planning and implementation capacity is critical to the success of relief and repair efforts. It will also facilitate the massive task of rebuilding the country and its economy after the war ends.
The country needs to keep conducting emergency repairs to roads, bridges, hospitals, power plants and energy distribution grids to improve living conditions for its embattled citizens and sustain trade and economic activity. Working with the Government of Ukraine, the World Bank has identified priority projects for immediate action to repair damaged infrastructure and launched the Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF) to channel grants from international donors through rapid transfer mechanisms, with strong oversight in place to ensure that funds are allocated and used effectively.
Without waiting for an end to the war, Ukraine also needs to start preparing for resilient, inclusive reconstruction – an enormous task that will take time and require much international support. With extensive expertise in reconstruction and experience from around the world, the World Bank can provide technical assistance and policy advice to promote reforms, including climate change action, that will help Ukraine chart a sustainable future and fulfil its goal of joining the European Union. The World Bank’s sister organizations, the International Finance Corporation and the Multilateral Insurance Guarantee Agency are also very well placed to support the much-needed participation of the private sector – international and domestic – in the recovery and reconstruction. IFC’s and MIGA’s support to date is already having catalytic impact.
Let’s not forget that support for Ukraine is not just an investment in the country’s future but is also strengthening a fragile global economy. As countries around the world struggled to recover from the COVID-19 pandemic, the war, which is causing unimaginable suffering in Ukraine itself, has also triggered spiking energy prices and food shortages that affect the lives of millions of people beyond the country’s borders.
As the war enters its second year, we all hope that peace will soon return. Rebuilding Ukraine will take years and require our steady, collective assistance. The World Bank will continue to cooperate with the government of Ukraine and help address the country’s short- and long-term needs with contributions from donors and working with partners.
By working together and harnessing the power of cooperation, the international community can amplify the benefits of assistance to Ukraine. Furthermore, helping the government of Ukraine mitigate the impacts of the war and preparing the country for a sustainable and peaceful future will also contribute to the global economic good.
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