Ukraine sees rebuild costing $600bn as it seeks global aid

Calling on members of the International Monetary Fund to donate 10% of their reserve assets received from the institution to support the effort.
Image: Sergey Bobok/AFP/Getty Images

Rebuilding Ukraine following Russia’s invasion will cost $600 billion, the nation’s prime minister said, calling on members of the International Monetary Fund to donate 10% of their reserve assets received from the institution to support the effort.

In the short term, Ukraine needs $4 billion to $5 billion per month in funding, Denys Shmyhal said at a ministerial roundtable Thursday organised to support the country at the International Monetary Fund and World Bank spring meetings in Washington. In the longer term, the nation needs a recovery strategy similar to the Marshall Plan for Europe after World War II.

Ukraine has been formulating a plan for recovery that includes incorporation in the European Union, Shmyhal said. He also urged countries to help supply ammunition and weapons to Ukraine and put more sanctions pressure on Russia. Shmyhal said that he’s sent letters to the nation’s partner countries asking them to donate one-tenth of their special drawing rights, known as SDRs, to support Ukraine financially.

“We will fight bravely and wisely to defend our nation and freedom of the European content,”  Shmyhal said. “But to win the war, we need your support.”

The IMF last year allocated a record $650 billion in reserves, called special drawing rights, for its 190 members countries to deal with pandemic fallout. Shmyhal, who has been visiting Washington and meeting with authorities from the US government and international financial institutions, spoke alongside IMF chief Kristalina Georgieva and World Bank President David Malpass.

The Washington-based fund expects Ukraine’s economy to contract 35% in 2022 as a direct result of the invasion.

Addressing the gathering, the World Bank chief said a “priority should be to fill Ukraine’s current financing needs in a way that minimises its future debt burden, so grant contributions will be very important.”

The IMF’s Georgieva also urged an emphasis on grants and “highly concessional financing,” asking countries to work with the fund to provide Ukraine with $15 billion over the next three months to help with vital government services.

© 2022 Bloomberg

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