Reconstructing Ukraine

Creating a Freer, More Prosperous, and Secure Future

by Howard J. Shatz, Gabrielle Tarini, Charles P. Ries, James Dobbins

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The post-war reconstruction effort in Ukraine might be the largest post-war rebuilding effort in modern history. Both the United States and Europe have begun to plan for Ukraine's success. The authors of this report examine previous post-war and post–natural disaster reform and reconstruction efforts to draw lessons and inform policymakers. They also discuss security arrangements, which will be essential for the success of reconstruction.

While reconstruction in Iraq and Afghanistan was more recent, Ukraine is fundamentally different. Instead, more-relevant lessons can be drawn from the truly transformative reform and reconstruction efforts in Western Europe following World War II, Central and Eastern Europe following the Cold War, and the Western Balkans following the wars in the former Yugoslavia. In all of these cases, the United States provided seed money and security, and the Europeans provided the bulk of the funding and advanced the process of European integration.

Key Findings

Ukraine's reconstruction and recovery should be a U.S.-Europe partnership

Reconstruction will be most successful if Ukraine sets the priorities, the United States leads on security assistance, and the European Union (EU) leads on reform and economic assistance, especially in light of Ukraine's potential EU accession. But both the United States and European countries will need to be involved with each.

Successful reconstruction will require strong linkages for international trade and investment, as well as a welcoming environment for international business.

To pay for reform and reconstruction, foreign government aid is needed; governments can fund higher-risk needs with conditionalities to ensure that Ukraine remains on the right track. But just as or more important, private financing and Ukraine's own resources are needed as well. Russia's international reserves — now frozen in the West — also could be an important source of funding.

Ukraine reconstruction will need a strong, trusted inspector general to safeguard the integrity of assistance, especially because of Ukraine's record of corruption since gaining independence in 1991.

Security is essential for Ukraine's reconstruction; without security, reconstruction will falter

Durable security arrangements supported by the West will help Ukraine deter and defend against future Russian attacks and will be critical if business and investments are to flow.

The North Atlantic Treaty Organization (NATO) provided security for European reconstruction after World War II and the Cold War and deployed more than 100,000 peacekeepers to the Western Balkans after the break-up of Yugoslavia, enabling recovery.

Arrangements for Ukraine's security could take a variety of forms and might require new models beyond NATO membership.

While stronger measures of deterrence might make renewed fighting less likely, they could also raise Russia's threat perceptions, leading Moscow to take desperate measures.

Recommendations

U.S. policymakers need to carefully examine alternatives, both old and new, for Ukrainian security, and should engage with allies on this crucial and sensitive issue.

The administration and Congress should approve a modern version of the laws that enabled U.S. activities in Central and Eastern Europe and the former Soviet Union after the Cold War — the Support for East European Democracy Act and the Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act. This should include appointing an empowered coordinator to deal with Europe, international financial institutions, and Ukraine itself.

The entire future course of Ukraine reconstruction will benefit from the development and implementation of a bipartisan effort to explain and build support among the American people for a longer-term U.S. policy in Ukraine.

Table of Contents

Chapter One

Introduction

Chapter Two

Historical Perspectives on Reconstruction

Chapter Three

Lessons from Post–Natural Disaster Reconstruction Efforts

Chapter Four

Planning for Institutional Reform Beyond Infrastructure Repair

Chapter Five

Financing

Chapter Six

Organizing the Effort

Chapter Seven

Securing a Rebuilt Ukraine

Chapter Eight

A Freer, More Prosperous, and Secure Future for Ukraine and Its Partners

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