The reconstruction of Ukraine, an opportunity for European entrepreneurs
Following Russia's aggression on February 24, 2022, Ukraine has been faced with the challenge of defending its borders, improving its administrative systems and rebuilding its damaged infrastructure.
The mass destruction caused by the confrontation between the Russian and Ukrainian armies poses a huge hurdle in a country devastated by war. Rebuilding a modern Ukraine along Western lines is now viewed not only as a challenge but also as an opportunity for Ukrainians. The investments needed to achieve this goal cover all sectors of the economy, of which the most important are: construction, energy, road infrastructure, food, IT, pharmaceuticals, and automotive.
Given the scale of the destruction in Ukraine, countries including the United States, the United Kingdom, Poland, Germany, France, Romania and Lithuania have expressed their willingness to help rebuild Ukraine’s infrastructure.
Special initiatives are being created for entrepreneurs wishing to invest in Ukraine. For example, Polish state-controlled entities such as the Polish Investment and Trade Agency, the Industrial Development Agency and the Export Credit Agency are running support programs for Polish companies planning to invest in Ukraine. In addition, international non-governmental organizations are announcing tenders to cover the needs of the Ukrainian market.
Solidarity with Ukraine was further strengthened by the organization of two major international conferences. The first one took place in Lugano (Switzerland) on July 4 - 5, 2022 and was attended by nearly 1,000 delegates from around 40 different countries and international organizations. Participants established the need to create a reconstruction plan for Ukraine along the lines of the US "Marshall Plan" of the mid-20th century. Furthermore, the Ukrainian government preliminarily revealed the countries that would be taking on the reconstruction of the different areas of Ukraine, indicating, among others, that Germany would rebuild Chernihiv, the United States and Turkey would rebuild Kharkiv, while Poland and Italy would rebuild Donetsk. In addition, the conference established seven principles to ensure the rebuilding of Ukraine as a modern and fully democratic state: partnership; reform focus; transparency, accountability and rule of law; democratic participation; multi-stakeholder engagement; gender equality and inclusion, and sustainability.
The second conference, held in Berlin (Germany) on October 25, 2022, was attended by several ministers, prime ministers of Western European countries and high-ranking officials from international organizations, who agreed on the need to launch an international platform for the reconstruction of Ukraine as soon as possible.
The destruction or partial damage includes more than 150,000 buildings and apartment blocks, over 2,000 educational institutions, more than 25,000 kilometers of roads and around 7,000 railroad lines, as well as dozens of district heating plants, several nuclear power plants and hundreds of thousands of cars.
It is estimated that the monthly deficit in Ukraine's budget due to ongoing defense operations is around EUR 4 billion and this amount will only increase over time. It is also worth remembering that the total official value of aid supplied to Ukraine as of the end of November 2022 was estimated at around EUR 100 billion.
In light of the above, it is estimated that the reconstruction of all sectors of the Ukraine economy could amount to more than EUR 750 billion in the long term.
The reconstruction of war-torn Ukraine could be a great opportunity for all kinds of businesses in all sectors of the economy. Despite the ongoing conflict, the Ukrainian market continues to operate and once the war is over, it will be in need of all kinds of products and services.