News | Story

President Zelenskyy, one Israel is enough

President Zelenskyy, one Israel is enough

The economic damage caused by Russia’s invasion of Ukraine is enormous. The World Bank predicts that by 2022, the country’s GDP will have shrunk by up to 45 percent. The direct infrastructure damage caused by Russia’s aggression is estimated to be worth $80 billion, according to the Kyiv School of Economics. And the overall cost of rebuilding the country is expected to be much higher – Ukraine’s former central bank governor Valeria Gontareva warns that it is already approaching $600 billion and could exceed one trillion dollars.

Despite the ever-increasing costs of the invasion – not only for Ukraine but also for Russia – Russian President Vladimir Putin appears unwilling to de-escalate the situation. On April 12, Putin declared that peace talks had “come to a halt” and that his “special military operation” in Ukraine would continue until all of its objectives were met. For the first time since withdrawing its troops from the region, Russia launched a new round of missile strikes on Kyiv, Ukraine’s capital, three days later. Attacks in Ukraine’s second city, Kharkiv, have intensified since then, and Russian troops are preparing to launch a new offensive in the Donbas region.

READ:  Taiwan says ASUS will 'evacuate' Russia after Ukraine urges exit

Putin appears hell-bent on razing every Ukrainian city and town that stands in the way of his invasion, seemingly unconcerned not only about civilian lives but also about the country’s economic future, which he claims he is trying to “de-Nazify.” He also appears incapable – or unwilling – to develop or even maintain the economy of whatever territory he manages to wrest from Ukrainian control.

For example, Moscow has made no investments in the Donbas region’s economy since it occupied it eight years ago. The Yenakiyeve steelworks, which was operational when Moscow took control in 2014, has been struggling ever since. Even Putin’s prized possession from the 2014 invasion, annexed Crimea, where he has made billion-dollar investments in recent years, is still struggling financially.

And now, in Russia’s hands, Mariupol is facing an even worse fate.

Even after the start of the 2014 war, the population of the strategic port city has always been pro-Moscow, voting for parties seen as pro-Russian. Despite their displeasure with Ukraine’s gradual disengagement from Russia, Mariupol residents never wished for a Russian military presence in the city – and with good reason.

READ:  The World Bank’s BEE: Old wine in a new bottle

Mariupol is in ruins today, nearly two months after it was shelled indiscriminately and heavily. Ukrainian forces are fighting back from the heart of the Azovstal steelworks, one of Ukraine’s largest, but the city’s future is bleak. Thousands of people have died, and there is almost no infrastructure left to support survivors once the fighting has stopped. Given Moscow’s track record in the occupied Donbas, there’s reason to believe that if it manages to keep Mariupol in the long run, it won’t make any serious efforts to rebuild the city or its steelworks.

For a long time, all Ukrainians living in areas controlled by Ukraine but occupied by Russia will be subjected to the devastating economic consequences of Russia’s aggression. These economic challenges will be exacerbated by the West’s economic war against Russia, which will undoubtedly continue barring a significant change in Russian policy or leadership.

However, the West has the ability to financially punish Russia for its continued aggression while also ensuring that it pays for the harm it causes to Ukraine’s economy.

To accomplish this, Western countries should not only seize Russian assets but also create a ledger for the costs borne by Ukraine as a result of the invasion – both direct and indirect damages. Of course, Moscow will fight back vehemently, as it has in the past. For example, Moscow was able to avoid paying more than $50 billion in compensation to former shareholders of Yukos, the country’s once-dominant oil company, which it nationalized in 2004. However, by banding together and agreeing on a new legal framework, Western governments can ensure that the Ukrainian people, not lawyers, benefit from the seizure of Russian assets.

READ:  Tunisian president sacks dozens of judges as he consolidates rule

Furthermore, to stop the country’s economic bleeding, Ukraine’s foreign debts should be transferred to Russia’s balance sheet. Those debts don’t have to stay on your credit report indefinitely. Making them Moscow’s responsibility – at least for the time being – could incentivize Moscow to make concessions, especially with Moscow on the verge of a messy default despite a low debt-to-GDP ratio.

Even if all of these steps are taken, Ukraine’s recovery will necessitate Western investment and assistance. As a result, Western nations must devise a “Marshall Plan” for Ukraine in addition to making Russia pay for what it has done.

Comment

Your email address will not be published.