Press release

Ukraine’s Recovery Plan 2022. The VERY First Draft

on 10.07.2022

The draft Recovery and Development Plan[1], pegged currently at an estimated €750 billion, was presented on July 5th at the International Ukraine Recovery Conference in Lugano, Switzerland.

Kyiv was quick to emphasize that the plan was devised under its leadership and that it “was recognized as the main framework document that sets the direction of the recovery process.”[2] Numerous countries, unions, international financial organizations, think tanks and consulting companies are likely to put forward their own further proposals over the coming months – these inputs will enrich the discussion and improve the overall quality of the end product.

But, first of all, credit to where it is due. The Recovery and Development Plan, developed expeditiously over a mere six weeks, came together through a rather inclusive process. According to Prime Minister Denys Shmyhal, “more than 3,000 experts, officials, and parliamentarians” were included in deliberations and numerous policy reforms and directions were evaluated. The onus now rests on ensuring that non-government voices are truly heard and counted as the roadmap enters its next stages.

It is notable that representatives from over 40 countries, alongside multilateral organizations such as the European Investment Bank and the Organization for Economic Cooperation and Development (OECD), signed on to the Lugano Declaration. Directed at providing political, financial and technical support to Ukraine, Shmyhal added that "heads of state and government, ministers and high-ranking representatives pledged to support Ukraine on its path to recovery — from the beginning to long-term recovery”.

The Lugano Principles that will guide reconstruction encompass the following priorities (the description of the principles, as laid out on the government website, is generally laconic):

  1. Partnership (Kyiv is more elaborate here, specifying that it aspires here to “lead the recovery process and implement it in partnership with its international partners”)
  2. Reform focus
  3. Transparency, accountability and rule of law
  4. Democratic participation
  5. Multi-stakeholder engagement
  6. Gender equality and inclusion
  7. Sustainability.

These commendable principles were developed in collaboration with Ukraine’s civil society leaders – they have also been lauded by the international community.

The plan, nevertheless, presently reads as a rough wish list generated by different national government bodies. My participation in government in 2014 indeed informs my views of the process. Yet though the first drafts of the 2014 plans (developed by the Economy and Trade Ministry) that landed on my desk were particularly chaotic and lacked internal coherence, the 2022 Recovery and Development Plan appears to boast at least two robust components: digitisation and EU integration.

It would, undoubtedly, be prudent if liberalisation and anti-corruption programs were incorporated as additional focal areas in future drafts of the roadmap. A step in this direction would cohere with the third Lugano Principle emphasizing transparency, accountability and the rule of law. The agreement, notably, asserts that “the recovery process has to be transparent and accountable to the people of Ukraine. The rule of law must be systematically strengthened and corruption eradicated. All funding for recovery needs to be fair and transparent.” The task will fall, in part, to Ukrainian civil society to ensure that this principle is embodied within breakthrough projects.

The Ukrainian prime minister’s proposal to implement the principles, ideas and slogans of the plan through a set of Breakthrough Projects affirms that its ideals are not merely rhetoric. Pragmatic measures encompass, among other items, the ideation process, project canvases, PERT and GANTT charts, workload graphs, risk analysis and mitigation, meticulous budgetary review, monitoring and disciplined implementation. Lessons heeded from developing and implementing similar projects in South-East Asia suggest that even the most capable governments focused solely on one truly breakthrough project over six months periods. How can Ukraine, consequently, strengthen its capacity to develop and execute breakthrough projects in 24 directions, as envisioned by the prime minister? The considerable incorporation and involvement of local governments and municipalities could provide one path forward.

The Recovery and Development Plan, to this end, must strengthen the local/municipality aspect of the rebuilding programme. The fact that the Lugano Conference featured a number of influential Ukrainian mayors points to a promising start - government and civil society alike appear categorically committed to a decentralisation strategy. Ukraine will, in fact, require a range of well-organised, community-based, bottom-up and galvanizing recovery projects to ensure a true national recovery.

The tenuous situation on the battlefield will dictate that the first priority remain weaponry and government budgetary support.[3] The European Union urgently needs to unblock a 1.5 billion-euro the European Investment Bank's loan for Ukraine, while Germany needs to unblock a larger EU’s package of nearly 9 billion euros.[4]

Meanwhile, the national government, municipalities and civil society, in partnership with the international community, have time to significantly improve the plan in accordance with the Lugano Principles. The enormous size and the scope of the recovery ahead require nothing less.

[1] https://recovery.gov.ua/en

[2] https://www.kmu.gov.ua/en/news/denys-shmyhal-u-deklaratsii-konferentsii-v-luhano-hlavy-derzhav-i-uriadiv-zoboviazalysia-pidtrymuvaty-ukrainu-na-ii-shliakhu-do-vidnovlennia

[3] https://www.globsec.org/publications/making-it-the-distance-to-victory-ukraines-war-and-post-war-needs/

[4] EU Bureaucracy Seen Blocking 1.5 Billion-Euro Loan to Ukraine, Bloomberg, 7 July 2022, https://www.bloomberg.com/news/articles/2022-07-07/eu-bureaucracy-seen-blocking-1-5-billion-euro-loan-to-ukraine?sref=oiil7Miy