Ukraine’s reconstruction effort faces uncertainty amid corruption, geopolitical tensions

An Pyeong-eok  

The author is a professor of international relations at Daegu University.

“Because of my friendship with Putin, I thought ending the war would be very easy. Unfortunately, friendship meant nothing.”

That was how U.S. President Donald Trump described his encounter with Ukrainian President Volodymyr Zelensky in New York on Sept. 23. Trump, who had boasted he could end the war within a day if elected and had pressed Zelensky repeatedly for a cease-fire since taking office, appeared to reverse course. Soon after, he wrote on Truth Social that with the European Union’s support, Ukraine could sustain its fight and reclaim lost territory.

What Trump left unsaid was that Ukraine’s ability to retake occupied regions depends heavily on continued large-scale U.S. arms support. Instead, he shifted responsibility to the EU. Trump’s admission underscored the difficulty of ending a conflict that has dragged on for three years and seven months. While a cease-fire remains uncertain, European businesses are quietly preparing for the economic opportunities of reconstruction. The EU is linking recovery plans to Ukraine’s membership bid, combining aid with reforms.

The Ukrainian government, along with the World Bank and the European Commission, issued the first official reconstruction estimate in late August 2022, six months into the war. They projected $349 billion in costs from Feb. 24 to June 1 of that year, including $97 billion in direct damages and the rest in indirect losses spread over a decade — an amount equal to 1.74 times Ukraine’s nominal GDP in 2021.

As the war persisted and Russian attacks destroyed power plants and transportation infrastructure, the figure ballooned. The fourth joint assessment, covering through Dec. 31 last year, put reconstruction needs at $524 billion, or 2.8 times GDP. A fifth report, expected in the first half of next year, will likely raise the total further.

Housing, transport and energy are the hardest-hit sectors. About 13 percent of homes have been destroyed or damaged, leaving roughly 2.5 million households in difficulty. Russia’s strikes on infrastructure aimed to cripple Ukraine’s capacity to sustain the war. Rebuilding homes is projected to cost $83.7 billion, transport $77.5 billion and energy $67.8 billion.

The Financial Times recently reported that more than 100 European companies see opportunities in Ukraine’s eventual recovery. These range from construction and materials to engineering, design, energy and insurance. With a cease-fire nowhere in sight and Moscow showing little interest in negotiations, firms close to Ukraine geographically have nonetheless been actively involved since the war began.

Behind the scenes, they are positioning for reconstruction projects. Former Danish Prime Minister Anders Fogh Rasmussen, who also served as NATO secretary-general, has advised the Ukrainian president since 2016. His consultancy, Rasmussen Global, has provided free guidance to Kyiv since the outbreak of the war, helping coordinate NATO arms deliveries and European reconstruction aid. Many companies seeking entry into Ukraine’s market have used his group as an intermediary.

Roughly one-third of recovery costs could be borne by private companies, while the remainder would require additional European and American support. The Group of Seven established a donor coordination platform in late 2022, holding more than nine steering committee meetings to expand and synchronize assistance. Korea joined the platform early last year, raising the prospect of domestic companies forming consortia with European partners.

Yet, the United States has also sought to secure its own interests. In April, Washington and Kyiv agreed to create the Ukraine Reconstruction Investment Fund, often referred to as a minerals accord. This would allow U.S. companies to develop Ukraine’s vast reserves of rare earths and other natural resources. Ukraine’s deposits are estimated at around $15 trillion — roughly half the size of the U.S. economy — making them a major prize.

Having secured economic benefits through resource development, Washington is likely to push Europe to shoulder more of the direct reconstruction burden. Meanwhile, Ukraine formally opened EU accession talks in June last year. No country at war had ever begun negotiations before. Kyiv submitted its application just four days after Russia’s invasion, on Feb. 28, 2022, and the EU fast-tracked talks in a show of political support.

Still, Ukraine faces a long road to membership. Upholding the rule of law and functioning market institutions are core requirements. Before the war, Transparency International ranked Ukraine as one of Europe’s most corrupt states, second only to Russia.

Domestic discontent has become visible. Beginning July 22, hundreds of thousands protested in Kyiv, Odesa and other major cities for more than three days. They opposed a new law that placed independent anticorruption bodies under the prosecutor general’s office. The agencies had been investigating figures close to Zelensky, and their loss of independence was widely seen as an attempt to shield allies. It was the first large-scale protest under martial law.

The United States refrained from criticizing Zelensky. The EU, however, warned that accession talks could be suspended unless the agencies’ independence was restored. Under pressure, Zelensky backed down. The episode showed how Brussels is tying reform to aid and membership prospects.

The Slovenian philosopher Slavoj Zizek once described Ukraine before the war as an “economic colony” of the West, where multinational corporations reaped major benefits from agriculture and natural resources. Russia, he argued, was trying to subjugate the country by force as another kind of colony. Ukraine’s reconstruction must avoid repeating this pattern, ensuring recovery is not just another avenue for exploitation.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.