lUkraine has been resisting Russian aggression for more than two hundred and twenty days. This war is causing destruction and a death toll that Europe has not seen since World War II, and the effects of the war are being felt everywhere – from Ukrainian families who have lost their dearest loved ones to African countries at risk of famine. It seems increasingly likely that we are heading for a protracted conflict. Victory, therefore, depends not only on the courage and motivation of the armies, but also on the solidity of the belligerents’ economies and the ability of each of them to support the war effort and mobilize the most resources. Can Ukraine be victorious on this front?
The war has destroyed countless lives, families and homes. Millions of people have fled the country and millions more have been displaced in Ukraine. More than 7% of the houses were destroyed. In August, much of the territory (the equivalent of a quarter of French territory) was under Russian occupation. The damage to the economy is enormous. By the most plausible estimate, the current unemployment rate is 35% and GDP is expected to shrink by 30-50% by 2022.
But the economic shock has been felt very unevenly: Eastern Ukraine’s economy has been largely destroyed (some of the largest steel mills were in Mariupol), while the west has remained relatively unaffected. For example, new housing construction has only resumed in 2% of the sites in the Kharkiv region, while the percentage is 81% in the Lviv region. The Russian missiles have destroyed all the major oil refineries, but the information technology sector remains solid: the number of jobs to be filled there is almost the same as before the war! The Russian maritime blockade, on the other hand, has devastated export sectors – metal production, for example, is expected to fall by 50% by 2022. As a result of this drying up of the balance of payments, Ukrainian refugees abroad have about 2 billion dollars (2.02 billion euros) in April. , twice as much as the billion dollars they send to Ukraine every month.
Spirit of ingenuity
Despite the enormous pressure in the early days of the war, the banks and payment systems continued to function. Other signs indicate that the economy is slowly recovering from the initial shock. For example, after a near-total collapse in March 2022, the number of train tickets sold is “only” 20% lower than before the war. The “grain deal”, which will allow Ukraine to ship agricultural products from Odessa and other ports, is also a step in the right direction, although the flow is still too low.
You still have 71.51% of this article to read. The following is for subscribers only.