Evaluation of Ukraine’s National Recovery Draft Plan

Tetiana Bogdan, Richard Grieveson and Michael Landesmann

No 61, wiiw Policy Notes from The Vienna Institute for International Economic Studies, wiiw

Abstract: Russia’s invasion of Ukraine has caused human suffering, the destruction of infrastructure and environmental damage on a huge scale. The Ukrainian government has already started to prepare for reconstruction, and presented its National Recovery Plan in July 2022. The plan has many strengths, including a focus on institutional upgrading, reducing the power of oligarchs, accelerating EU integration and convergence with EU standards, and a correct identification of the most pressing short-term measures to support the economy. However, we also identify several shortcomings and areas for improvement. The plan overestimates the cost of reconstruction we estimate Ukraine’s external financial needs for post-war reconstruction at USD 410bn (without security needs) – somewhat lower than the government’s projection of USD 500bn. We also think that the government overestimates the economy’s post-war growth potential. Adjustments need to be made both to the distribution of post-war financing across sectors and to the plans related to industrial policy and the financial sector. The aspiration to lower the tax burden is unlikely to be compatible with post-war demands on the state budget related to reconstruction. In addition, the proposed decentralised approach is unlikely to yield the best results in most areas, reconstruction should be guided at the national level. Attention should also be given to the areas of overlap, the lack of coordination between different elements of the reconstruction plan, and, in some cases, the incorrect prioritisation of tasks.

Keywords: Ukraine economic recovery plan; Ukraine economic reconstruction; Ukraine-EU integration; Ukraine financing needs; Ukraine-Russia war; Reconstruction in the Balkan states (search for similar items in EconPapers)
JEL-codes: F35 H56 P52 (search for similar items in EconPapers)
Pages: 31 pages including 2 Tables and 1 Box
Date: 2022-11
New Economics Papers: this item is included in nep-cis
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