The final outcome of the war in Ukraine is impossible to know, but one result that now seems out of the question is a total Russian victory. The Ukrainian government will not be toppled. Although it might lose control of some of its territory for a time (or even permanently), Ukraine will continue to exist as a sovereign state. Ukrainians are proving remarkably resilient. But merely persisting as a country is not enough; what Ukraine needs is not just survival but revival. As Stanford University’s Larry Diamond has suggested, Russia’s invasion of Ukraine could inadvertently “launch a new wave of democratic progress.” But that won’t happen on its own. The government in Kyiv and its partners should start planning for a postwar reconstruction that would allow Ukraine to become precisely what Russian President Vladimir Putin fears most: a Slavic success story on his border.
The obstacles to Ukraine’s recovery are daunting. Parts of the country have been deliberately bombed to smithereens by Russian artillery. The port city of Mariupol has been encircled for more than 40 days, but its outgunned and undersupplied marines and Azov Battalion refuse to capitulate. As Russian troops retreated from Kyiv, they left behind a denuded landscape and the mutilated bodies of hundreds of civilians in Bucha. More than ten percent of the country’s population of 41 million has fled the country. Another 7.1 million Ukrainians have fled their homes and are internally displaced, waiting out the conflict in safer regions of the country. According to Ukrainian President Volodymyr Zelensky, up to 3,000 Ukrainian soldiers have been killed. Economists estimate that the war has caused $80 billion in damage to Ukraine’s infrastructure alone.
There are plenty of destroyed states that were rebuilt with significant outside assistance: think of Germany after World War II, or Bosnia and Kosovo after conflicts in those places in the 1990s. The same could happen in Ukraine. But it will take more than just outside money to revive Ukraine, which will urgently need to address the three main problems that held it back prior to the war: corruption, poor governance, and broken courts.
FROM CRISIS TO OPPORTUNITY
When he launched the invasion in February, Putin apparently believed that Russian forces would be able to quickly conquer Kyiv and replace Zelensky with a pliant puppet. Instead, Kyiv stands and Zelensky commands the respect of the world not only for his physical courage and bravery but also for his defiant and soaring rhetoric. In six weeks, the Russians have managed to take only one major city, Kherson.
This week Russian forces launched a more targeted assault on eastern Ukraine. If Ukraine can continue to hold its territory and draw down Putin’s army, Russia will eventually run out of capable forces and be forced to make major concessions at the negotiating table. Andriy Zagorodnyuk, Zelensky’s first defense minister, has estimated that Russian ground forces could run out of capable men in the next two to three months. The Russian Federation has 300,000 ground forces and has sent approximately half its force to fight in Ukraine. Putin cannot send more without fully mobilizing—a step that would require instituting a large-scale draft of eligible males. But he has boxed himself in by declaring the situation in Ukraine to be a “special military operation,” not a war, which prevents him by law from conducting a full-scale mobilization. Russian public opinion—while overwhelmingly supportive of the war—is unlikely to assent to a draft when state television is assuring the country that the operation is going well. And even if Putin does initiate a draft, his forces will not immediately be prepared for serious combat.
Although Ukraine will continue to have to fight Russia, heavy combat seems likely to be limited to the Donbas for the next phase. Putin would also clearly like to make another run at Kyiv. While Russian ground troops focus on making gains in the Donbas, Moscow will continue to lob missiles across Ukraine to disrupt the supply lines carrying needed weaponry from the West and to attempt to break the resolve of the Ukrainian people. It is possible the war may drag on for months or even years.
Even as the fighting continues, Ukraine’s Western friends, international financial institutions, and Ukrainians not engaged in combat should start putting reconstruction plans in place as soon as possible. Zelensky is aiming to bolster the economy, including rebuilding transportation networks, and the World Bank recently pledged to create an emergency $1.5 billion aid package and said that it is “ready to help Ukraine with reconstruction when the time comes.” But a giant influx of foreign aid will not, on its own, help democracy flourish in Ukraine. Before the war, the country was hampered by terrible governance, and Ukraine’s promising economy has always underperformed.
Paradoxically, the Russian invasion may well provide an opportunity for the democratic and economic leap forward that Ukraine has never been able to realize. The country became independent only in 1991 and has undergone several major attempts at reform, but it has never experienced a transformative breakthrough. This time could be different. Much depends on Zelensky. A mediocre president who sought to consolidate power before the war and slow roll reforms, he has since morphed into an inspiring leader. For models to guide him in this daunting next phase, he should look west and to history—specifically Germany’s.
BUILD BACK BETTER
Emerging from the ruins of World War II, West Germany experienced the Wirtschaftswunder, or “economic miracle,” that propelled it to the front ranks of global economic powers. The initial stimulus for recovery was provided by the postwar Marshall Plan, which supplied billions in aid to Western Europe even as Stalin forbade the Eastern bloc from accepting it. Whereas East Germany followed the Soviet command-economy model by collectivizing agriculture and nationalizing heavy industry, West Germany followed the opposite course. In the 1950s, Chancellor Konrad Adenauer and his visionary minister of economics, Ludwig Erhard, presided over what soon became an economic powerhouse. A liberalized American trade policy opened up new industrial markets for West Germany, and the introduction of a social-market economy ensured stability at home. This German version of neoliberalism relied on infusions of foreign aid but also the rule of law; investment in public goods, including hospitals, railways, and airports; and an interventionist state that could ensure, among other things, that would-be oligarchs could not distort free markets. The result was that by the end of the 1950s, West Germany had become a byword for prosperity.
Ukraine can follow a similar path—and also avoid some of the pitfalls of the postwar reconstruction of the western Balkans, where youth unemployment remains in the double digits, transnational organized crime is thriving, and local leaders often resist real economic transparency and reform. How can this be done? Kyiv must avoid putting heroic but inexperienced war heroes in charge of the reconstruction process, and the West should be looking for a special envoy with experience managing billions of dollars in assistance from multiple donors to oversee a Marshall Plan for Ukraine—or, as Timothy Garton Ash has suggested, the Zelensky Plan.
Some of the steps needed for Ukraine’s renaissance are obvious: the country has never embraced the rule of law, and its judicial system remains riddled with corruption. After the war, assets will be cheap, and there will plenty of interest from international investors. But without fair courts, none will consider putting resources into Ukraine, and the country’s talented and wealthy diaspora will continue to stay away. Ukraine has tried to reform its courts many times, but each attempt has failed because the corrupt system that benefits from phony justice has fought it successfully. Ukraine needs to show fast progress, and it can easily copy what Kazakhstan did: set up a commercial court based on the principles of English common law and staffed by foreign judges, who are preferable to Ukrainian ones to avoid conflicts of interest and personal relationships with judges. This would be a good first step to reassuring investors and the public that it is safe to invest in Ukraine and that contracts will be enforced.
It will take more than just outside money to revive Ukraine.
Once the fighting stops and people return home, it is time for a census. Ukraine hasn’t had one since 2001, and the government cannot accurately estimate the size of the population. City planning is next to impossible without accurate information. Before Western governments invest billions, mostly earmarked for infrastructure, accounting for Ukraine’s changing population is key.
Low taxes with significant public investment in roads, schools, hospitals, and universities will also go a long way. Zelensky spent most of 2021 rebuilding Ukraine’s roads to buoy his 2024 presidential run. He should restart that initiative but use a more transparent procurement system: no more back-scratching deals that benefit cronies.
One way to entice the most talented members of Ukraine’s diaspora to return and rebuild is to make public service jobs more prestigious. Mikheil Saakashvili pioneered the model in Georgia when he was president, and it worked. Highly educated Georgians returned to Tbilisi to assume roles as ministers and deputy ministers in his reform government and passed a raft of legislation that unleashed economic growth. Ukraine has hundreds of graduates from top universities in the United Kingdom and the United States whom it should aggressively recruit.
Finally, Zelensky should allow experimentation. One of Ukraine’s least sexy but most successful reforms since 2014 was its push to decentralize government. Each region of Ukraine has its own flavor and priorities. The Zelensky Plan must account for and encourage these regional differences. Local municipalities should let business flourish without pressure from local law enforcement and tax or government inspectors.
Having fortified Ukraine militarily, it will soon be time for the West to begin the task of helping Ukraine right itself economically. Now is the time to put plans in place to seize the momentum when the war is over and Ukraine can rebuild. Putin’s worst nightmare—a vibrant Slavic democracy next door—may yet come true.
