The cost of Putin’s invasion: Ukraine will need £335 BILLION to rebuild Russian destruction

Ukraine will need £335 billion to rebuild itself over the next decade after Russia’s devastation, which killed nearly 10,000 civilians and damaged two million homes, the World Bank has revealed in a new report.

The cost of clearing the rubble alone is estimated at £4 billion, according to the report, which provides both an in-depth and detailed look at the toll on Ukraine from Vladimir Putin’s 13-month illegal war.

The numbers make for grim reading: At least 9,655 civilians have died, including 465 children; nearly two million homes damaged; more than one in five public health facilities are damaged; and 650 ambulances damaged or looted.

In total, the World Bank calculated $135bn (£110bn) in direct damage to buildings and infrastructure so far, not counting wider economic damage.

The actual number of Ukrainian civilians killed in the war is likely much higher than the official figure. Because large parts of the country are still occupied by Russian troops, researchers have been unable to gain access to count the full toll.

The damage would be even greater without the strong defense of the Ukrainian armed forces, noted Anna Bjerde, the World Bank’s vice president for Europe and Central Asia. Ukraine is strongly supported by Western arms supplies.

She said the worst damage is confined to the frontline regions of Donetsk, Kharkiv, Luhansk and Kherson – the four regions Putin claimed to have annexed last September, despite not fully controlling any of them.

As it stands, the World Bank said, the Russian invasion has undone 15 years of economic progress in Ukraine, cut Ukraine’s gross domestic product by 29p percent and pushed 1.7 million Ukrainians into poverty.

The assessment was carried out by the Government of Ukraine, the World Bank Group, the European Commission and the United Nations.

The findings are intended to guide planning for funding and implementation of what is an ongoing recovery effort in Ukraine.

The energy sector in Ukraine has suffered the biggest wave of damage recently, following Russia’s targeted attacks on the power grid and other energy hubs during the winter – including Europe’s largest nuclear power plant in Zaporizhzhia.

The total damage to the energy sector is now five times greater than last summer, according to the World Bank.

Pictured: An aerial view of the city of Mariupol, which was virtually razed to the ground by Russian shelling in the early stages of the war

Pictured: An aerial view of the city of Bakhmut, seen last month. The city was the center of the most bloody fighting of the war and was completely destroyed by Russian shells

The release of the report comes after Ukraine and the International Monetary Fund (IMF) agreed on a £12.7bn loan package to support public finances severely strained by the Russian invasion.

Ukraine’s finance ministry said the program “would help mobilize funding from Ukraine’s international partners, maintain macro-financial stability and secure the road to post-war reconstruction after Ukraine’s victory in the war against the aggressor” .

The loan program – which was also designed to garner more support by reassuring allies that Ukraine was pursuing strong economic policies – would run for four years.

The first 12 to 18 months would be aimed at helping Ukraine close its budget deficit and easing pressure to finance spending by printing money at the central bank, the IMF said in a statement.

The rest of the program would be aimed at supporting Ukraine’s bid for European Union membership and post-war reconstruction.

The IMF deal is expected to bring more money to Ukraine as it provides evidence to potential donor governments, including in G7 democracies and the EU, that the government of Ukraine is pursuing sound economic policies.

The deal, which is subject to approval by the IMF’s board of directors, “is expected to help mobilize large-scale concessional financing from Ukraine’s international donors and partners over the life of the program,” said Gavin Gray, the IMF Chief of Mission to Ukraine, in a statement.

The IMF said Ukrainian authorities have shown their commitment to sound economic policies and achieved all agreed goals during a meeting.

The lending program goes beyond previous IMF practices by extending loans to a country at war, under new rules that allow aid under conditions of “extremely high uncertainty.”

Ukraine increased its military spending as the economy contracted by about 30 percent in 2022, which reduced tax revenues. The result was a budget deficit covered by external financing from the US, the EU and other allies.

Ukraine has already started reconstruction in some regions, with before (top, February 2022) and after (bottom, February 2023) photos showing how places in Kiev were hit by Russian attacks in the early stages of the war, which have recovered less than a year since the attacks

The foreign aid has helped the country end its reliance on money printed by the central bank and loaned to the government, an emergency measure deemed necessary early in the war but which could fuel inflation and could destabilize the country’s currency if it lasted longer.

Before the war, Ukraine had made progress in reforming its banking system and making government contracts more transparent. But Ukraine still ranks 122 out of 180 countries on Transparency International’s Corruption Perceptions Index.

The antebellum economy was characterized by political involvement of wealthy individuals known as oligarchs and slow progress in improving the legal system that was considered too open to political influence.

But the IMF said after the preliminary consultations that the government had made “progress in reforms to strengthen governance, anti-corruption and the rule of law, laying the foundations for post-war growth, although the reform agenda in these areas remains significant.”