“How can we restart economic activities in Ukraine?” Yuriy Gorodnichenko, a Ukrainian-American economist at the University of California, Berkeley, has a plan when he poses this rhetorical question at Humboldt University on Monday evening. He is the lead author of A Blueprint for the Reconstruction of Ukraine.
It describes the “extent of destruction and refugee crisis” caused by the Russian attack and sieges that is “comparable to the effects of World War II.” In accordance with this historical catastrophe, the scenario of a new edition of the Marshall Plan for war-torn Europe in the years 1948 to 1952, adapted to the needs of Ukraine, is designed.
Gorodnichenko and five international colleagues published the “Draft for the Reconstruction of Ukraine” in April as a recommendation from the London Center for Economic Policy Research (CEPR) – the first edition of the new “Rapid Response Economics” of the renowned British research institute and global network .
The professor, who was connected via video, explained to the panel and the audience in the Faculty of Economics at the HU: “In phase 0, the production potential is secured, phase 1 is about humanitarian aid, in phase 2 to rebuild the critical infrastructure and in phase 3 to rebuild the economy – better than before.”
Away from the outdated structures of large-scale industry, which is still “Soviet” in parts, towards decentralized production from agriculture to IT. Distribution and import/export on alternative routes instead of via the major and currently blocked ports. On the one hand, this would reduce vulnerability – to the Russian aggressor – and on the other hand it would open up the opportunity to use green energy, for example.
Gorodnichenko speaks from the economist’s perspective. But he also does not forget the educational institutions with the pupils, teachers and students as part of the “productive capacity” that is absolutely worthy of protection.
When asked about the cost of rebuilding Ukraine, Gorodnichenko replies emotionally: “The ongoing war is driving the costs higher and higher. In view of the countless dead, war wounded and psychologically traumatized, it is even more difficult to put a figure on them.”
At the beginning of April, after six weeks of the Russian war of aggression, the CEPR blueprint concluded that 200 to 500 billion euros were to be estimated. Now this preliminary estimate has to be corrected to EUR 1 trillion, said Gorodnichenko.
There is no doubt about the historical dimensions of the reconstruction. Yuriy Gorodnichenko not only highlights the Marshall Plan, for which the USA gave two percent of its gross domestic product at the time (today that would be 450 billion US dollars), as a “success story”. Despite strategic mistakes, this also applies to German reunification, which will cost a total of two trillion euros.
And also for the EU integration of Poland with European investments of 160 billion euros in the first 15 years of membership – “a kind of Marshall Plan for Poland”, as the CEPR paper says.
Gorodnichenko cites the international programs for the reconstruction of Afghanistan and Iraq as negative examples, which were characterized by “unrealistic timetables, a lack of overview, corruption, a lack of security” or by “rivalries between the agencies, a lack of involvement of local forces and a lack of capacity to absorb the aid”. be.
For Afghanistan, it is also true that the international efforts there with the troop withdrawal and the return of the Taliban regime must be regarded as ultimately a failure.
According to the CEPR report, the situation in Ukraine is very different, and this was also emphasized by Yuriy Gorodnichenko and the panellists at the Humboldt University. The country has developed into a stable democracy, and its political system functions even in times of war.
“It will remain so after the war,” assures Alexander Rodnyansky, economics professor in Cambridge and adviser to the Ukrainian president. When asked several times about the problem of corruption, he refers to “great progress” such as the creation of special law enforcement agencies and a national agency for corruption prevention. “We are on the European level on this topic today.”
Gorodnichenko is also courting trust. In contrast to the Marshall Plan, an EU initiative is required for Ukraine: In order to raise and distribute the money – mostly as donations and not as loans to prevent a debt crisis – an “independent, EU-authorized Reconstruction Agency” to be established.
It is essential that Ukraine “owns” its reconstruction program. At the same time, binding milestones and close monitoring of the program should be agreed with the EU, according to Gorodnichenko.
In this way, reconstruction would also become a program for rapprochement with the EU. Monika Schnitzer, Professor for Comparative Economic Research at the LMU Munich, Economics and currently a guest at the HU, advocated better management of expectations towards Ukraine: Accession will come “not in two and not in five years”, but on the way then, according to Schnitzer, “there will be many opportunities and programs for Ukraine”.
