In the middle of war, Ukrainian finance minister is already thinking about reconstruction

posted on 05/13/2022 14:52

  (credit: AFP)


(credit: AFP)

Although the war continues to tear Ukraine apart, its finance minister says he sees the “first signs” of economic recovery and points to the country’s reconstruction, in an interview with AFP.

“The war continues, but there is no escalation like in the first two months” of the Russian invasion launched on February 24, minister Sergiy Marchenko said in his national flag-decorated cabinet in Kiev’s historic district.

“It continues, but not at the pace we’ve seen before,” adds the 41-year-old minister who, like many Ukrainian officials, has since the beginning of the war changed his suit to a more relaxed style and wears a hooded sweatshirt.

The prospects are currently disastrous for the country, which was already one of the poorest in Europe before the invasion and saw millions of citizens fleeing abroad, mainly women and children.

While the International Monetary Fund (IMF) predicts a collapse of 35% of Ukrainian GDP this year, Marchenko expects a drop of 45-50% and estimates the damage done to the economy so far at “about 600 billion dollars”.

Revenues from customs tariffs fell by 70% and tax revenues between “25 and 30%”, exports and imports halved and inflation exceeded 16% in April, he lists.

But after the capture of Kiev was considered, Russian troops withdrew from the outskirts of the capital and the north, which paved the way for the return of part of the inhabitants and the reopening of business.

“Consumer demand is increasing, connections are being resumed” in Kiev and its region, celebrates Marchenko, for whom the return of embassies to the capital “is a signal for citizens to return” and “restart their economic activities”.

“Means of Survival”

On the other hand, many companies have moved their activities to the west of the country – relatively spared from the war – while fighting continues in the east and south and Russian attacks continue across the country.

Ukraine does not plan any default or restructuring of the external debt, but “we need 5 billion dollars a month to cover our budget deficit”, explains the minister, whose priority task currently is to guarantee the permanent flow of international financial aid.

“We ask for high financial support, but the price is also high. For us it is a means of survival”, says Marchenko.

“Ukraine is currently an outpost of the struggle for democracy. We cannot lose this war and we need weapons, funds and sanctions” against Russia, he adds.

Funds are needed to fight, but also to rebuild this war-torn country.

Ukrainian President Volodymyr Zelensky called on the international community to draw up a new “Marshall plan” for his country, referring to the US economic aid program for the reconstruction of Europe after World War II (1939-1945).

“We have to direct Russian assets [apreendidos] abroad to rebuild Ukraine”, stressed the minister.

“When the occupier enters Ukrainian territory, he steals. He doesn’t just destroy infrastructure and businesses and kill people: he steals grain and mineral resources,” he accuses.

In his opinion, “critical” infrastructure is the most damaged and should be the first to be rebuilt.

“The main task is to allow people to return to the liberated territories and resume normal life with electricity, water and gas and other infrastructure such as roads and bridges”, concludes Marchenko.

About Abhishek Pratap

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