Physical damage to Ukraine’s buildings and infrastructure from Russia’s invasion has reached about US$60 billion and is to rise further as the war continues, World Bank President David Malpass said on Thursday.
Malpass told a World Bank conference on Ukraine’s financial-assistance needs that the early estimate of “narrow” damage valuation does not include Ukraine’s growing economic costs from the war.
“Of course the war is still ongoing, so those costs are rising,” Malpass said.
Photo: Bloomberg
Ukrainian President Volodymyr Zelenskiy, in an online address to the conference, outlined far bigger costs and financing needs. He told participants in interpreted remarks that Ukraine needs US$7 billion per month to make up for economic losses caused by Russia’s invasion of his country.
“We will need hundreds of billions of dollars to rebuild all this later,” he said.
The global community needed to exclude Russia immediately from international financial institutions, including the World Bank and the International Monetary Fund, Zelenskiy said, adding that all countries “must immediately be prepared to break up all relations with Russia.”
The conference occurred on the sidelines of the IMF and World Bank spring meetings, and included finance officials from a number of countries, including US Secretary of the Treasury Janet Yellen, who earlier said the US would double its direct non-military aid pledge to US$1 billion.
Zelenskiy called for countries that have imposed sanctions and freezes on Russian assets to use that money to help rebuild Ukraine after the war and to pay for losses suffered by other countries.
Russia should shoulder some of Ukraine’s rebuilding costs, Yellen said at a news conference.
“It’s clear that the rebuilding costs, ultimately, in Ukraine are going to be enormous,” Yellen said. Looking “to Russia one way or another to help provide some of what’s necessary for Ukraine to build is something I think we ought to be pursuing.”
Using seized Russian central bank reserves in the US to rebuild Ukraine would be a “significant step” that would need discussions and agreement with international partners, she said, adding that the step should not be taken lightly before thinking through the consequences.
Ukrainian Prime Minister Denys Shmyhal, who attended the conference in person, said Ukraine’s GDP could decline by 30 percent to 50 percent, with direct and indirect losses totaling US$560 billion so far. That is more than three times the size of Ukraine’s economy, at US$155.5 billion in 2020, according to World Bank data.
“If we do not stop this war together, the losses will increase dramatically,” Shmyhal said, adding that Ukraine would need a rebuilding plan similar to the Marshall Plan that helped to rebuild Europe after World War II.
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