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Paying dearly: the unimaginable cost of the war to the economy of Ukraine Israel today

2022-12-20T20:53:11.366Z


The 300 days of the Russian invasion of Ukraine brought an unprecedented disaster to its economy • According to the World Bank, the cost of the country's reconstruction has already reached about 600 billion euros • In Kiev they are talking about a trillion • The US and the European Union are sending huge aid packages, but they still do not come close to the extent of the destruction


Every day of war on the territory of Ukraine takes a toll on human life, and also on the health and well-being of the survivors.

But alongside these there are also economic prices - and they are already almost unimaginable.

"Ukraine's reconstruction after the war will cost between 500 and 600 billion euros," estimated a few days ago the vice president of the World Bank, Anna Beirda.

In an interview with the Austrian newspaper "Di Persa", the senior economist said that in June the amount was estimated at 350 billion, but since then the numbers have taken off - not least because of Russia's systematic damage to the energy infrastructure.

The president of Ukraine, Volodymyr Zelenskiy, punched in an even higher amount: a trillion dollars.

What does this damage consist of?

The Kyiv Economic University estimates the cost of the damaged property at $135.9 billion.

Most of the damage was caused to residences: about 126,000 private houses were damaged or destroyed, along with about 17,000 residential buildings.

About 195,000 private cars were destroyed, as were 14,400 public transport vehicles (see details in the infographic).

The war damaged businesses and factories, shopping malls and educational institutions, hospitals and government buildings, and caused enormous damage to the agricultural sector.

To illustrate, the country lost a quarter of its wheat crop: 5.8 million tons (out of 26.6 million) were harvested in the territories occupied by Russia.

This is a loss of billions of dollars.

The corn harvest decreased by 4.5 million tons, to 27 million.

Ukraine is one of the leading countries in the world in agricultural exports - therefore this is an important income section for its economy.

Every fourth Ukrainian will live below the poverty line

The accumulated damages harm both the purchasing power of the Ukrainians and the state's ability to meet payments.

The World Bank further estimates that by the end of the year, a quarter of Ukraine's residents will live below the poverty line.

Inflation, which stood at 26% at the end of October, is expected to rise to 28% by the end of the year.

Happily, Ukraine is not alone.

According to the Kiel Institute for World Economy, the amount of international obligations reached 113 billion euros (see details in the graph).

However, these amounts are far from being enough, and certainly not close to what was allocated in the West to deal with phenomena such as the economic crisis of 2008 or the corona epidemic.

"Aid to Ukraine is not charity," said a few days ago the Ukrainian Minister of Finance, Serhii Marchenko.

"We are trying to protect freedom and democracy throughout the civilized world."

The Hungarian checkpoint

But even in Europe there are countries that stick sticks in the wheels of financial aid to Ukraine.

One of them is Hungary, which recently refused to approve an 18 billion euro aid package that would have covered almost half of the Ukrainian deficit and allowed it to avoid printing money to pay salaries and benefits.

The reason: a debate between the Orban government, one of the European politicians closest to Putin, and Brussels, which conditioned the aid package to Hungary on meeting the criteria of transparency and proper administration.

Orban, for his part, argued that each country should allocate aid to Kiev separately.

"Certainly we are concerned about the blocking of aid," said Marchenko, "this is not the time to postpone aid. Next time, without Ukraine - Russia will be closer to the borders of the Union."

In the future, Kiev will demand that reparations from Russia be included in any post-war settlement.

Meanwhile, in the capital of Ukraine, they hope that the West will advance procedures to expropriate the Russian assets for the benefit of the reconstruction.

But for now, it seems that the road to settlement is still far away.

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Source: israelhayom

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