Economists in Ukraine have kept a grim tally ever since the Russian army swept across their border in early 2022. Private houses destroyed in the first year of the war: 66,618. Major roadway kilometers torn up by tank treads and high explosives: 8,746.
The economists track how many schools have been turned to rubble (434 in the first year alone) and how many hydroelectric power plants have been damaged or destroyed (all of them). They know how many agricultural bee colonies were wiped out in one year of fighting (86,902).
Their ledger provides some idea of just how massive the reconstruction effort will have to be when the shooting stops. But it’s just the start. Researchers at RAND looked across decades of recovery efforts, from post–World War II Europe to post–Hurricane Katrina New Orleans, to show what it will take to rebuild Ukraine. Their goal was not just to get houses rebuilt and schools reopened, but to ensure a “freer, more prosperous, and secure future” for Ukrainians and the West.
“This might be the largest recovery project in modern history,” said Howard Shatz, a senior economist at RAND who coauthored the report. “It’s not going to be like Iraq or Afghanistan. There’s no insurgency here. The war has unified Ukrainians, not divided them. This is going to be more like what happened in Europe after World War II or the fall of the Berlin Wall.”
Ukraine was the poorest country in Europe even before Russia invaded. Its infrastructure was in such bad shape that President Volodymyr Zelenskyy once said—before the war—that he hoped to be remembered as a leader who built good roads. Its reputation for corruption was legendary. One U.S. government report described the case of a judge caught accepting a $12 million bribe—who still managed to keep her job.
A highway bridge lies in ruins in Bucha, Ukraine, in the aftermath of the Russian invasion, April 4, 2022.
Photo by Ukraine Presidency/Alamy
To rebuild successfully, Ukraine will need to come out of the war on a new trajectory. And the time to start thinking about what that will look like, and how to make it happen, is now.
It’s possible that neither Ukraine nor Russia will win this war outright. When it comes, peace might instead take the form of a cease-fire or an armistice, with both sides seething but exhausted. That’s rough ground on which to rebuild.
Ukraine will need some way to guarantee its security against the threat of another Russian attack and to give investors confidence. Bringing it into NATO is one option—but it’s only one option. The U.S. and other allies could instead continue to supply Ukraine with weapons and training to build up its own defenses. They could also threaten to send in their own forces if Russia crosses the border again.
“NATO doesn’t need Ukraine as a member to deter Russia,” the late James Dobbins, a storied diplomat who held the Distinguished Chair in Diplomacy and Security at RAND, once said. He helped lead the Ukraine project almost up until his death last year. He added: “Nor does Ukraine need to become a NATO member to enjoy material support for its defense.”
The war has caused more than $150 billion in damage, just to physical infrastructure.
A more-secure Ukraine can then turn to the long and costly task of rebuilding. The economists keeping count at the Kyiv School of Economics estimate the war has caused more than $150 billion in damage, just to physical infrastructure. The destruction has been so sweeping and so complete that in some places it’s like a natural disaster hit. So RAND researchers also looked for lessons in previous disaster-recovery efforts.
In Haiti, for example, recovery from a catastrophic 2010 earthquake slowed when few international donors wanted to cover the very necessary, but very unglamorous, work of clearing rubble. Just bringing displaced people home to participate in the recovery can be a challenge: The population of New Orleans still is not what it was when Hurricane Katrina crashed ashore in 2005. Puerto Rico put together a whole-of-society recovery and reconstruction plan after Hurricane Maria in 2017. But local communities, often short on workers, struggled to spend the huge sums of rebuilding money coming in.
“In fact, in the majority of the natural disasters we looked at, those local communities lacked the staff, expertise, and processes to manage such a large reconstruction effort,” said Gabrielle Tarini, an associate policy researcher who coauthored the report. “So while we certainly want to localize the effort in Ukraine as much as possible, we also need to be mindful of the capacity constraints that communities are going to have.”
A school in Mykolaivka, Donetsk Oblast, Ukraine, was destroyed by Russian shelling on September 28, 2022.
Photo by State Emergency Service of Ukraine/Wikimedia Commons
That leads to the next big question: Where will the money come from? Western countries have frozen roughly $300 billion in Russian assets. But it’s not at all clear that seizing those assets and using them for the recovery would be legal under international law. Instead, given the scale of the challenge, many commentators have called for a new Marshall Plan for Ukraine.
The original Marshall Plan provided billions of dollars to help pull Western Europe out of the wreckage of World War II. The aid—and the creation of NATO at the same time—provided the stability that Europe needed to rebuild. But what often gets overlooked is that it was private investment, not international aid, that mainly bankrolled the recovery. And the economic engines of Europe didn’t really start up again until international trade started flowing.
Central Europe after the fall of the Berlin Wall might provide a closer precedent for Ukraine. There, some U.S. aid came in the form of enterprise funds that invested in small and medium-sized companies. Those funds revitalized banks and rebuilt industries to help the countries receiving it, such as Poland and Hungary, eventually join the single market of the European Union.
That is the stated goal of Ukraine, too, and the potential for EU membership should exert a “gravitational pull” on the recovery effort, researchers wrote. “This is not 1947,” said Charles Ries, a former ambassador and principal deputy assistant secretary of state for European Affairs, now an adjunct senior fellow at RAND. “The Ukrainians have their own vision about the economy that they want to create. And the most important economic aspect is that it moves toward eventually joining the European Union.”
The European Union should take the lead—with Ukraine setting the priorities—on managing the economic recovery.
The European Union should take the lead—with Ukraine setting the priorities—on managing the economic recovery. The U.S. should take the lead on questions of security. All major partners should appoint special representatives to coordinate their support and ensure Ukraine’s needs are met, even down to rubble removal. And, with billions of dollars likely to flow into the country, Ukraine should appoint an independent inspector general to ensure the money is well spent and the process is transparent.
The Marshall Plan provides one other key lesson. In the postwar America of the 1940s, the plan was a hard sell. The Truman administration led a massive effort to build bipartisan support. Ukraine’s recovery will take years. It will span presidential administrations. If federal officials want it to succeed, they need to do more to make their case and shore up support for the long haul.
“Ultimately, building a secure, economically prosperous Ukraine that is fully integrated into European institutions will be a capstone achievement,” Ries said, “beneficial on both sides of the Atlantic and a boon for global security and Western democracy.”
Ukraine already has an outline of what it will look like. Its plan looks far beyond the immediate damages tallied by the economists in Kyiv and envisions more than $750 billion in economic support and projects that would raise a new Ukraine from the destruction. It calls for new power plants and modern buildings, labor reskilling programs and rule-of-law reforms, science parks and a manufacturing hub for electric vehicle components.
It calls for thousands of kilometers of new and rebuilt roads, too. But that is no longer President Zelenskyy’s main measure of success. In a 2022 Wall Street Journal op-ed, he promised to make Ukraine “the greatest growth opportunity in Europe since the end of World War II.”
