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  • IER took part in the discussion "Bolstering Ukraines Wartime Economy and Planning for Recovery: The Ukrainian Perspective".

    15.04.2022

    Yesterday, April 14, the IER took part in the discussion "Bolstering Ukraine’s Wartime Economy and Planning for Recovery: The Ukrainian Perspective". During the discussion, experts of the Institute, from the CES and DiXi Group discussed the economic prospects of Ukraine and the consequences of the war for our and foreign economies.

    Igor Burakovsky about the consequences of the Russian war for European and world economies:

    • Aggression against Ukraine has deeply impacted the European and world economy by slowing down post-COVID economic recovery, speeding up inflationary pressures (growth of food and energy prices), turmoil in financial and commodities markets, and ecological crises.
    • Ukrainian economic resilience is a key pre-requisite of European and world economic resilience. That's why helping Ukraine to curb Russian aggression and ensure Ukraine's post-war economic recovery are in the interests of the world community. 
    • Aggression against Ukraine has brought about a series of crises - humanitarian (refugee) crisis, ecological crises, increasing poverty in the low-income countries - net importers of food and energy.
    • War reduces opportunities for financing development (achieving SDGs) with all obvious consequences as it leads to redistribution of available resources.   

    Oleksandra Betliy on the economic losses of Ukraine and the need for international assistance to our country:

    • Russia’s attack on Ukraine has caused huge losses:
    • damaged civilian and military infrastructure accounts for about at least USD 270 billion;
    • destruction of more than 7,000 residential buildings, 400 educational and 100 medical institutions, networks (heating and electricity), infrastructure facilities; 
    • drop of real GDP in 2022 will be between 30-45% and will slowly recover in the next years. 
    • The costs of recovery will be too high for Ukraine to handle. International assistance for reconstruction is required from other countries and international financial institutions. The IMF has already created a special account and a new mechanism - Resilience and Sustainability Trust (RST). In addition, there is an idea of creating a joint fund that will finance countries of the world.
    • Several criteria for financing that Ukraine really needs:
    • grants - Ukraine would really urge countries to make as many grants as possible, this would help to sustain debt sustainability;
    • loans - if countries lend Ukraine money, this should be on concessional terms: longer maturities with small interest, and possibly with a grace period (10 years);
    • clear and fast procedures with as little bureaucracy as possible.
    • G7 countries might provide us with part of their SDRs received in 2021 to fight with Covid-19 impact.
    • Reparations paid by Russia or revenues from frozen Russian assets should be an important source for financing recovery but this would require time as courts are lengthy. 
    • Fast accession of Ukraine to the EU is a path to structural and investment funds, which is very significant for our country.
    • The aid to Ukraine is the aid to the world, as Ukraine provides food for many vulnerable countries.

     

    Component 56-5

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