Rebuilding Ukraine with Russian Cash?

Rebuilding Ukraine with Russian Cash? By Roger Boyes.

There is no doubting the huge, devastating damage being inflicted on Ukraine by the Russians. The World Bank estimates that the cost of the destruction was dollars 411 billion for the first year of war, from February to February. Since then raids on Kyiv and the destruction of the Nova Kakhovka dam have pushed up the total. Ukraine will be taking into the conference a list of 75,000 smashed residential buildings, more than 2,500 schools, 500 hospitals, about 100 energy infrastructure facilities and 120 churches.

It should be clear that Russia as the aggressor state must be held not only politically and morally accountable for this systematic, pulverising attack on a European neighbour, but that ultimately some of its frozen assets (dollars 397 billion at the last count) will be made available for the rebuilding of Ukraine.



To reach this goal there would have to be a peace settlement with Russia that can hold better than the Versailles treaty that bound Germany after the First World War. …

So this weighs down the London conference, leaving the disposal of Russian assets as seemingly too complex, too prejudicial of an eventual peace settlement. The Ukrainians, of course, have no such inhibitions. They have confiscated 13 aluminium-related plants in Ukraine from the Russian oligarch Oleg Deripaska. And the Ukrainian holdings of Putin’s ice hockey team-mate Arkady Rotenberg, including a shopping centre in Kyiv, have been confiscated too. Twenty lawsuits have been filed and dollars 1 billion has been raised. The assets are seized under martial law, from people who already had assets frozen under sanctions.



Other countries have less legal freedom to convert frozen Russian assets into direct contributions to Ukraine’s rebuilding programme but Kyiv argues they should be doing more. Two oligarchs, Alisher Usmanov, founder of Metalloinvest, and Mikhail Fridman, co-founder of Alfa Bank, were sanctioned by Britain in March 2022. Both have, among other British property, mansions in Hampstead, north London. Both transferred right of ownership of some of their properties to offshore companies or family trusts before the sanctions order was passed. Kyiv says it must be possible to prove they are beneficial owners and to take action.

Britain’s broader role should be to build a coalition for the seizure of sanctioned Russian state and private entities. “You built a coalition to supply tanks,” says Olena Halushka of Antac, a Kyiv anti-corruption NGO. “Now you can do something similar by building support in the G7 for the confiscation of Russian assets.” …

The key is to get the tracked-down assets, including Russian central bank funds, into one pot, administered perhaps by the World Bank. The interest accrued could be taxed by national authorities and that revenue sent to approved Ukrainian reconstruction projects. The Kremlin will say this is an act of piracy. I see it more as essential creative thinking to save the economic fabric of a country that is being ripped apart by a serial violator of international law.

I’ll be surprised if this happens. Getting the aggressors to pay for damage, on top of the loss of their armed force and the humiliation, seems too much. But still, as a disincentive for military adventurers, it would be outstanding.

By the way, whoever paid for all the damage inflicted on Iraq in 2003? As I recall, that wasn’t a defensive war, and the weapons of mass destruction proved about as elusive as Ukrainian fascists.

If Ukraine does manage to evict the Russians, then there is no gain and only a lot of pain for Russia. That will usher in a more peaceful period in history. If an invader can be defeated with the aid of missiles given to the defender, then the reward for invading a neighbor is meager or negative. Everyone else benefits, because we can all spend less on armaments. Even the US State Dept gets this one right!