While all eyes are on the battlefield, without recovery finance and key domestic reforms, Ukrainian resilience is at risk.

The war rages on but Ukraine’s recovery cannot wait

Image — UNHCR’s Philippe Leclerc, Irpin city head Oleksandr Markushyn and UNHCR representative, Karolina Lindholm Billing, at a construction site in Irpin, Ukraine. Photo: Eugen Kotenko/Ukrinform/Future Publishing via Getty Images.

During more than two years of full-scale war against Ukraine, Russia has launched 8,000 missiles and 4,630 drones, targeting densely populated cities, energy-generating facilities, large shopping centres, schools, hospitals, railway stations and high-rise buildings.

Failing to make significant progress on land, Putin’s strategy is to make Ukraine uninhabitable by causing a humanitarian disaster, depriving its enterprises of energy supply and thereby push Kyiv’s leadership to accept a false peace deal.

Recovery price tag

The estimated price tag for rebuilding Ukraine has already reached $486 billion. In 2023 alone Russia caused destruction totalling $75 billion. Most of these funds would reach Ukraine once open military hostilities are over, but Kyiv is already seeking not only military assistance but also micro-financial aid and investments to sustain the resilience of its home front. It is estimated that immediate rebuilding needs for 2024 are $15 billion.

Ukrainian officials and international partners will gather in Berlin on 11-12 June for the Ukraine Recovery Conference (URC) to discuss how best to provide this non-military support. Compared to the 2022 Lugano URC and the 2023 London URC, the focus is shifting from planning a post-war rebuilding and an ambitious Marshall Plan to replenishing Ukraine’s resilience and capacity to win the war.

Restoring energy supply is key to survival

Survival of Ukraine’s energy system will dominate the discussion. Funders must ensure that Kyiv has the financial means and technical solutions to heat homes and provide energy to businesses during the upcoming winter. 80 per cent of Ukraine’s energy generation capability has been destroyed or damaged by Russian missile strikes. But wartime resilience has other key elements that require policy attention and dedicated investment.

Ukrainian civil society wants a greater role

Given civil society’s active involvement in supporting resistance, Chatham House asked Ukrainian non-profit organizations what they see as key priorities for recovery. Over 200 civil society organizations (CSOs) from all over Ukraine responded to our online survey.

One of the main findings is that Ukrainian civil society’s contribution to recovery is growing and organizations want better inclusion by the state and Western donors. Around 80 per cent of respondents report engagement in recovery. They assist internally displaced persons (IDPs), cooperate with government officials in planning post-war recovery and support various vulnerable groups affected by the war.

CSOs want to create a collaborative framework to design and implement innovative solutions to acute societal problems created by the war. Establishing the civil society advisory group at the Multi-agency Donor Coordination Platform (MADCP) could be a first step in the right direction towards such a framework. Discussions about the business advisory group are much more advanced.

Focus on institutions

Ukrainian civil society has a highly reformist agenda. In Kyiv and the regions, organizations name the modernization of institutions as the top priority for recovery – even during the war. Ukraine’s capacity for effective statecraft is key to its success on the battlefield.

A first step towards institutional reform is establishing the rule of law and fighting corruption. When asked to assess the most important elements of Ukraine’s internal resilience that require immediate support, 68 per cent of survey respondents selected fighting corruption that undermines institutions, 56 per cent said strengthening the rule of law, and 47 per cent said the accountability and effectiveness of institutions.

Reforms that help improve the internal generation and allocation of resources could be a game-changer for Ukraine, and key for sustaining the trust of funders and investors. Given how unpredictable external funding is, especially from the US, Ukraine’s key aim should be to stamp out corruption and ensure that public investments into new infrastructure, roads and housing comply with high standards of integrity.

Transparency underpinned by digital tools, such as the new DREAM system, could help and be made compulsory for use on all recovery projects. But accountability ensured via anti-corruption agencies and the court system is equally important. The State Audit Service of Ukraine needs urgent reform. Civil society is particularly keen to ensure civic oversight with over 40 per cent of regional CSOs willing to monitor local reconstruction projects.

The Ukraine Plan that underpins the new EU Facility (a new funding mechanism providing a total of €50 billion over four years) will sustain reform momentum. It outlines measures that should improve public administration and strengthen the fight against corruption. Opening EU accession negotiations would give powerful impetus for completing Ukraine’s institutional reforms.

Veteran community a top priority

Years of Russian aggression have also created new societal challenges. Survey respondents singled out the reintegration of veterans as one of the most acute challenges facing Ukraine. This issue is also key for resilience and social cohesion. The state register currently includes 900,000 veterans and Kyiv may have to support as many as four million after the war.

Failure to enact domestic reforms will fuel feelings of sacrifices being in vain and could undermine unity and resilience inside Ukraine.

Veterans struggle with societal integration and face many health issues, including mental health conditions. This group should be given dedicated attention, especially with regards to integrating them into the labour force, which has been significantly depleted due to war mobilization and refugee outflow.

Read more: Chatam House