“We don’t just want to rebuild roads, bridges or water mains,” Denys_Shmyhal explains in a guest essay for The Economist. “We plan to build a completely new economy”
BEFORE RUSSIA’S invasion, Ukraine’s economy had been expected to experience an upswing this year. In 2021 the country’s GDP amounted to $200bn, the highest in its history, in spite of Russia’s occupation of Crimea and parts of the east of the country. Citizens’ incomes had also been growing. In short, Ukraine was changing and rapidly becoming a prosperous and democratic European country.
The invasion is also important because of the broader economic shock to the world economy. Last year Ukraine was the second-largest grain supplier to the European Union, accounting for 14% of the EU’s grain imports. It was also the world’s largest exporter of sunflower oil, with a share of some 47% of global supply. So Russia’s aggression threatens to spark a global food-supply crisis. It could also affect many other industries, such as the tech world.
The restoration of the country’s infrastructure is the obvious place to start. We estimate that total damage in this area may already be more than $100bn. In addition, tens of thousands of Ukrainians have lost their homes, which will need rebuilding. This construction must take place according to modern European standards.
According to World Bank data our military expenditure in 2020 was more than 4% of GDP. This number will grow significantly. Our government plans to increase state investment in the military-industrial complex and provide private defence companies special help in order to boost arms production both for the Ukrainian military and for export abroad.
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