We have no doubt that the war with Russia will end with Ukraine’s victory. But when the war is over, the big question will be who will pay for its consequences? Who will pay for the reconstruction of Ukraine? Today an international Ukraine recovery conference begins in London. This is how we see it.
There is not a snowball’s chance in hell that Putin’s Russia will pay Ukraine reparations for the destruction. According to the World Bank, $411bn (£320bn) is needed to rebuild Ukraine. That far exceeds our country’s GDP in 2022, and that isn’t the final amount. Russia has already killed or injured over 22,000 Ukrainian civilians, destroyed and damaged 1,500 hospitals, hit 10% of our education infrastructure and 50% of our energy infrastructure; 2.4 million people have had their homes damaged or completely destroyed. Because of the Russian army’s actions, about 30% of Ukraine’s territory may be contaminated with mines and shells. That is an area roughly the size of Great Britain. The scale of destruction is unlike anything Europe has seen since the second world war.
For the first time in history, we have the chance to put into effect the principle of just retribution, whereby the aggressor finances the reconstruction of what has been destroyed. We must seize this opportunity and create a new beacon of hope for Ukraine and for other states that could potentially become victims of aggression. After the large-scale Russian invasion, more than $300bn in foreign exchange reserves held by the Russian central bank were frozen in the west. Searches for and seizures of Russians’ private assets continue. The international taskforce dealing with the seizure of assets of sanctioned individuals and companies had found $58bn in Russian funds by March this year. Detecting and blocking is only half the battle. Russia’s assets should work for Ukraine. Under no circumstances should they be allowed to return to the Russian Federation. This would mean the defeat of the free world and maximum injustice to Ukraine: Russia will use these resources for new wars and our country will be in ruins.
Russia’s money should become a major source of recovery. It should not be funded by Ukrainians, partner state taxpayers or international financial organisations. Russia must pay. That would be logical, fair and just. In November 2022, the general assembly of the UN adopted a historic resolution on the creation of an international mechanism to ensure Ukraine is compensated for its losses. The first practical step was taken at the summit of Council of Europe member states in Reykjavík, where a register of damage was launched. A digital record of the destruction caused by Russian aggression is the first element of the international compensation mechanism. In this way, we will carefully record and verify all losses in order to hold Russia accountable.
There are four more important steps ahead. First, an international commission to determine the amount of compensation to be paid to victims on the basis of the data in the register must be established. Second, partner states must amend their legislation to allow the diversion of “frozen” Russian assets to Ukraine. Third, a compensation fund in which the money will be collected must be set up. Finally, the practical implementation of confiscations and payments for reconstruction will be needed. We are aware that we are pioneers. So far, no one has done anything similar. We understand the fears of our partners, but Russia’s criminal actions are so unprecedented that fundamentally new, courageous decisions are needed. These decisions will be important not only for Ukraine, but for the whole world.
We propose to create a universal system whereby the internationally recognised aggressor and perpetrator of war pays for its crimes. This will be a fully legitimate mechanism based on the relevant international agreement. Today the ball is in our partners’ and allies’ court. It depends on them how quickly we move from an idea to its implementation. We call on our partners, especially from the US, the UK, the EU and Canada, to show leadership and take practical steps to seize relevant assets for the reconstruction of Ukraine. On Monday, the UK government unveiled new legislation that would maintain the imposition of sanctions on Russia until and unless Putin pays adequate compensation to Ukraine. In that way, frozen Russian assets can be donated to Ukrainian reconstruction. That is a start.
And Ukraine is leading by example. At the start of a full-scale war, we took decisive steps to seize Russian assets. So far, the assets of some 6,800 individuals and legal entities linked in one way or another to the aggressor state have been frozen, with some of them already confiscated. Every Russian state dollar found and confiscated relieves the budgets of partner states. Instead, it increases our ability to rebuild the economy and infrastructure on the principle of “build back better”. The seizure of Russian assets is in the national interest of states seeking lasting peace and global prosperity in a world in which autocratic regimes are afraid to attack their neighbours. For they will know that they will be forced to pay for everything.