On July 4-5, the URC2022 conference on the restoration of Ukraine was held in the city of Lugano. Representatives of more than 40 states, the European Investment Bank, and the Organization for Economic Cooperation and Development attended the event. The media reported the figure of $750 billion allocated for these needs, but what exactly the size of the funds be, how they will be distributed, and how civil society will control it, OPORA’s analysts discussed with invited experts during the traditional Friday discussion “War Speeches” on July 8.
According to OPORA’s analyst Anatolii Bondarchuk, Ukraine’s public positions were related to the issues of its post-war reconstruction. Also, Ukrainian politicians continued to insist that our state should receive more weapons because it had already demonstrated the effective use of Western weapons earlier.
"We are talking, for example, about HIMARS systems that were delivered to Ukraine in such a small quantity in order to, let's say, test them in practice, and then, accordingly, supply more. And we saw many reports that many military warehouses were destroyed behind enemy lines. We're not sure if all of this was done by the HIMARS systems, but I think some of these warehouses were definitely hit by them. Therefore, this is the position, and indeed we support it in every possible way,” Anatolii Bondarchuk said.\
According to him, russia continues to promote its traditional narrative that Ukraine is allegedly to blame for the global food crisis. In addition, the topic of Finland and Sweden joining NATO was actively discussed in russia.
"russia is trying to supposedly level some loss for itself. They say, for example, that placing NATO bases in Finland and Sweden will not protect these countries. They do not specify what they mean, what will not be protected from—whether this is a public statement just to talk about or whether it can be considered as some kind of threat towards the future NATO countries, which have already been invited to join. Certain issues must be settled, formal procedures, and then these countries should become full NATO members," Anatolii Bondarchuk said.
According to the analyst, Ukrainian authorities asked to strengthen the economic pressure on russia in order to stop its military machine.
Instead, russia continues its manipulative narrative that the Western weapons transferred to Ukraine are supposedly already “walking” somewhere in the Middle East.
"They are trying to discredit us in the eyes of the international community, those countries that supply us with weapons. Allegedly, Ukrainians are bad and resell weapons on the black markets. Once we had a broadcast on this topic, we talked about the fact that russia has several prepared theses, which it periodically promotes on various international platforms. Although russia is not welcome anywhere on these platforms, it still makes an effort," Anatolii Bondarchuk said.
In addition, he notes: traditionally, russia transfers responsibility for the war in Ukraine to Ukraine, the United States, and the collective West. It also actively uses the thesis that Ukraine is allegedly shelling itself.
Ukraine continues to insist that russia will be punished for its crimes, while russia instead tries to indicate that it will not bear responsibility for its actions. The analyst noted putin's public statement, where he said that russia had allegedly not yet begun to seriously fight and, in fact, now russia is just threatening Ukraine.
"They are trying to force Ukraine to sit down at the negotiating table. There was some hint that there is room for negotiations, but every day, relatively speaking, it is becoming less. This way, it seems to me, russia is hinting at the need to sit down at the negotiating table and sign a capitulation. It is clear, it has been said many times before that they want these negotiations to take place on their terms, in fact, they want Ukraine to support whatever they propose. It seems to me that such negotiations will not end well. Many see in putin's words a hint of the use of nuclear weapons, but I think that it is more about the fact that russia is aware of the complexity of the war for itself, the economic, political, and possibly social price that has to be paid. That is why it is trying in every possible way to force Ukraine into the negotiating process, to capitulate. I'm not a military expert, so I don't want to evaluate the fighting, but in general, it seems to me that the way the Armed Forces of Ukraine conduct defense really tires the russians and disrupts certain of their ‘three-day plans to capture Kyiv’. Therefore, they understand that a war of attrition is difficult for them. In the context of such slow but systematic supplies of arms to Ukraine, accordingly, there is also a lend-lease planned for the fall, there are many plans and there may be positive trends for Ukraine. And again, the supply of air defense systems to Ukraine indicates that this list of weapons that was given to Ukraine is constantly expanding—we started, relatively speaking, with helmets, and are now ending with air defense systems," Anatolii Bondarchuk said.
This week, the Prime Minister of Ireland also came to Ukraine. At the meeting, he agreed upon coordination to counter the food crisis, increasing energy cooperation and preparation of the seventh package of sanctions.
Among the important international events, one must also highlight the meeting of the foreign ministers of the G20 countries, which was attended by the head of the russian foreign ministry lavrov, who was boycotted. Instead, the head of the Ministry of Foreign Affairs of Ukraine, Dmytro Kuleba, spoke online (despite Ukraine is not included in the list of G20 countries). He spoke about continuing further pressure on russia, increasing the supply of weapons to Ukraine and the need to unblock food exports from Ukraine.
Andrii Borovyk, executive director of Transparency International Ukraine believes that the answer to russia's accusations about Ukrainian corruption is very simple—russia should leave Ukraine, and with Ukrainian corruption, whether it exists or not, and if so, to what extent, Ukrainians will figure it out themselves.
"There is a question of damages—in my understanding, this is actually the cost of what was destroyed. But when we talk about restoration, rebuilding, reconstruction, and all other things, I am glad that politicians, government officials, and public organizations are talking primarily not about rebuilding what we had, but actually about changing the country. And it's primarily about modernization, it's rethinking of even urbanism in cities,” Andrii Borovyk noted.
He also notes that the current calculations are only approximate because Ukraine continues to live in a crisis when russia is shelling cities and destroying infrastructure every day. More specifics can be seen only with time.
At the conference in Lugano, a plan for the restoration of Ukraine was presented. It is focused on 10 years and will have 3 different stages — urgent needs, medium-term, and long-term. All details can be seen on the website.
"I think this plan will be refined because there is actually a lot of work. The country's reconstruction plan will be a huge mass of information for analysts, even for those who participate in its development. I just saw some country-by-country recovery plans after some kind of natural disaster. I opened it, and there were 500 pages. But this was a natural disaster that affected not the entire country, but only a part of it. We actually have the whole country without exaggeration, each region has certain destruction and each region needs restoration," Andrii Borovyk said.
He also notes that the idea of tying the regions and cities of Ukraine to certain countries for recovery was presented. But there should be a general vision and framework so that there are no fundamentally different formats of public transport management in different cities of Ukraine.
The expert also spoke about the initiative to create a coalition of Ukrainian and international public organizations RISE Ukraine. More than 20 organizations united in order to offer their help to the Government.
"RISE is already such a platform that combines public organizations with state bodies. Our main goal is to help them in the actual implementation of reconstruction and to increase the transparency and accountability of this process. And also to simplify the very process of managing this whole story, because managing $750 billion over 10 years is just a crazy figure. I don't remember the size of the last budget we adopted for the last year, but it is definitely a bigger number. Therefore, within the framework of this initiative, we propose ideas, look for allies in the Government, some of them are already with us, and promote the ideas of transparency and accountability, with the fact that public organizations are ready to take responsibility. As in its time, and this is not a boast, but simply a fact, the "Prozorro" system, in particular, was built on our Transparency database International , and we gave it to the state for free. There were a lot of participants there, just formally, and in fact we had it. The same with "Prozorro.Sales". We are ready to repeat this success. I hope it will be real. Because Mr. President likes to say a lot now that after February 24, the country has changed and the people have all changed. Well, I hope that all people have changed, and government officials will be even more open to cooperation with public organizations. Because now, if we are separated, it is more to the detriment than to the benefit," Andrii Borovyk said.
In his opinion, it is necessary to think about restoration now. After all, if russia had not attacked us, we would not have lost the two most important resources—time and people who could later become government officials and work for the good of the country.
"As far as I remember, the ‘Marshall Plan’ began to be prepared only two years after the end of World War II. We don't want that, do we? We want it to actually happen right away. Because in fact, to be completely honest, the recovery is already starting. Because we have so much damage, and it's just a phase that's a priority right now. And it's also not too far from how we see the country in 10 years, so it's normal to work on it now," Andrii Borovyk said.
In his opinion, the principle of "living here and today" is unlikely to lead Ukraine to any development, so it is worth thinking about the future. If we thought only about the present, we would not have received the status of an EU candidate, because candidacy and further membership in the EU are issues for years to come.
Oleksandr Solontai, director of practical policy programs at the Institute of Political Education, also notes that just in time for the conference in Lugano russia actively launched its propaganda with its usual thesis that money should not be given to Ukraine because it is a corrupted country. However, representatives of Ukraine themselves, in particular, talked about the problem that russian propaganda can work on international partners.
"It is very important that Ukraine itself officially reflects on these issues. This will clearly mean that Ukraine understands this problem at the official level. Well, the second point is that I agree with the thesis that we will figure it out ourselves. I will translate it: Transparency International and other organizations in Ukraine will not allow it to happen any other way. I completely agree with that. Because who tells us about corruption? These people tell us about corruption? Two Swiss people's deputies directly said that even in Switzerland there is corruption, the question is its level. It is true that Ukraine is working to reduce the level of corruption. It is also true that we work slowly. The fact that we need to speed up is also true, we will speed up. We understand now that all international support and all subsequent support for reconstruction and restoration really rests on in the matter of trust in us. And trust in us is a question, including corruption," Oleksandr Solontai said.
In his opinion, there are currently two debatable issues regarding the restoration and reconstruction of Ukraine. First, whether it is timely because the war and hostilities continue. Second, for whose money it will happen. Oleksandr Solontai believes that both questions have a positive connotation since when it comes to future and post-war reconstruction, it becomes clear what to do today, e.g. definitely to win. It also works to ensure that weapons are more actively provided to Ukraine. And as for the money for recovery, then, of course, we are talking about the use of confiscated russian assets, grant partnership programs, and international support. An important component is also the investment of private businesses and multinational companies, which will have the opportunity to come to our market to earn money.
"The issue of reconstruction and restoration is a conversation about interests. That is, in infrastructure projects, in all consumer projects, in our market projects, in all issues of Ukraine's inclusion in the EU, it is a matter of interest. Talking at the level of interest strengthens the coalition a lot. Because russia is attacking and trying to destroy the coalition around supporting Ukraine. And our task is to explain. Therefore, this conference, the very beginning of the conversation about Ukraine is a very positive moment. Well, we really need certain things right now to restore Ukraine in order to win. Well, it will help tomorrow," Oleksandr Solontai said.
In his opinion, Ukraine's main donors for recovery will be private companies, venture funds, independent investors, and transnational companies that will enter Ukraine instead of the oligarchy. Ukraine will change in terms of monopoly conditions, legislation, justice, and civilization. If, for example, a Ukrainian manufacturer successfully does something for both the Ukrainian and the international market, then it is this transnational company. But if the Ukrainian campaign stays on the market only at the expense of monopoly rules and state support, it will not work. For example, it is simply impossible to spend a lot of money from the state budget on road repairs, when there are not enough funds in the budget to cover the needs of the army—so private companies have to build toll roads.
"It seems to me that private capital will be the number one source for Ukraine's recovery. This is normal because it will bring new social relations. The war has already killed a large number of illusions, but it will finally kill paternalism and create an aversion to corruption because we are the taxpayers, we are the economic source. This is how market logic should be. This will very seriously put things in order in people's heads, in the relations between the state and people regarding what will happen next," Oleksandr Solontai said.
In his opinion, Ukraine should be so open to the world that all private companies from around the world should want to come here, despite the risks.
OPORA’s analyst Andrii Savchuk noted that Ukrainian government officials and international partners at the conference in Lugano said, in particular, that the frozen russian assets should be used to rebuild Ukraine and cover about 60% of its needs.
"But everything is not so simple. We have such an example with Iraq and Kuwait. Kuwait asked for $350 billion in reparations and compensations. They were given a little more than $50 billion, but specifically Kuwait got only $40 billion. We understand that probably for this tidbit, we are talking about $300 billion of russian frozen assets, not to mention oligarchs, probably not only Ukrainians will apply, " Andrii Savchuk said.
According to Oleksandr Solontai, it is already possible to help Ukraine significantly, even without giving anything directly—if private international investors implement three expensive projects: high-speed narrow-gauge railway from Warsaw to Kyiv, Uzhhorod-Slovakia international airport, Italy-Ljubljana-Budapest highway, which enters Ukraine. Then Ukraine will be firmly connected with Europe, which will also help both now and in the future.
Andrii Borovyk believes that the issue of frozen russian assets abroad is a complex and long-term story.
"Sanctions are currently being imposed on russian assets abroad, they are being seized. An arrest does not mean that it already belongs to the country where it took place. The only way they can be taken away is through a criminal process. In a criminal trial, there must be a victim, there must be an accused, and usually this is a period of tens of years," Andrii Borovyk.
In addition, each country where russian assets are frozen must develop and adopt appropriate legislation for such procedures.
The expert also emphasizes that with frozen assets, with the allocation of aid from the budget, with the imposition of sanctions, the situation in every country is always difficult. Business always suffers from it, so you have to be understanding and continue to bend your line.
As for who should be relied on in the reconstruction of the country, then, in his opinion, the backbone will be inside the country, in particular business, if given enough opportunities.
"The state should block security risks as much as possible, do the work for investors. But what can we expect in terms of money in the rebuilding? But only for themselves. It is necessary to create conditions for the business in Ukraine in such a way that it does not even think of fleeing abroad. It should be liberalized as much as possible, but again smartly, in order not to lose revenue to the budget, or it is possible to lose revenue to the budget at a certain time, and at other times it should grow," Andrii Borovyk said.
According to Oleksandr Solontai, it is already necessary to work on minimizing corruption risks: do not accumulate funds for recovery in one hand, direct them immediately to the level of the community-region-state, and a significant part of the funds will remain abroad and will be invested in such global infrastructural international projects on the territory of Ukraine without transit to our budgets.
"As of today, the main task of civil society, anti-corruption organizations, all independent voices is to convey the thesis that everything should be in different baskets for different purposes. Then there will be a much higher process of transparency, and everyone will benefit from this—both people in Ukraine and people abroad who invest money in it," Oleksandr Solontai said.
However, according to Andrii Borovyk, money in different baskets will complicate the work of tracking them. What is more important is not where these funds lie, but their effective use, which requires an appropriate management and control tool. In his opinion, an electronic reconstruction management system is necessary so that every person in the world can look at the reconstruction of which object in which region of Ukraine this person's taxes from one or another country went to rebuild.
"Very often you can take money and never say thank you. Therefore, any information about the fact that this was done with the funds of the European Union or a certain country, I think, will only strengthen the interest of Ukrainians in the promotion of Ukraine in the EU and rapprochement with these countries," Andrii Borovyk said.
Analysts of the Civil Network OPORA carefully monitor russia's official position regarding the war it started on the territory of Ukraine. Daily short analytical notes can be found on the new "War Speeches" online tool. The analysts also discuss the weekly results during online streams on Fridays at 15:00. We hope that this tool will help the Ukrainian authorities, its international partners, and other stakeholders in planning steps to counter the occupying state. In addition, all users can read about the reaction of the civilized world leaders to the statements and provocations of the occupying state on a single website. We have already scrolled through all the news for you and analyzed them in the general context.