The Ukrainian Marshall Plan: Norman Foster, central banks, and Russian yachts 

Image by Алесь Усцінаў. Free to use under a Pexels license.

Since Russia’s invasion of Ukraine on February 24, 2022, the protracted war has displaced 12.5 million people. Many will not be able to come back to their old homes, that now lie in ruin. Across the country, the cities of Kyiv, Mariupol, Kharkiv, Chernihiv, Sumy, Rubizhne, and many others have remained under heavy shelling for more than two months. As a result, much of Ukraine’s vital infrastructure, agricultural equipment, industrial capacity, energy facilities, and family livelihoods lie in ruin. Reports estimate that in some parts of the country, particularly the east, more than 90 percent of homes have been damaged

With the price tag to rebuild the country estimated at more than USD 500 billion, and rising every day, many have called for a Marshall Plan-style recovery program for Ukraine. Important questions remain though, such as: where will the funds come from, how will Ukraine rebuild, and who will do it. Plans have been floated, from using seized Russian assets to relying on international architecture firms like Foster + Partners. Most importantly, without concrete security guarantees, no reconstruction plan can take root. 

Damage done  

The Russian government’s foundational justification for the war, to decapitate Ukraine’s military infrastructure, was discarded as the army turned on residential neighborhoods, schools, and hospitals. This is a tactic the Russian military has relied on in both Chechnya and Syria. In 2016, former leader of the Justice and Development Party (AKP) and then Prime Minister of Turkey Ahmet Davutoğlu said Russia was “behaving like a terrorist organization and forcing civilians to flee,” through bombardments “without any discrimination between civilians and soldiers, or children and the elderly.” 

On March 9, Russian forces bombed a maternity hospital in the city of Mariupol. As of May 14, the World Health Organization Surveillance System for Attacks on Healthcare (SSA) has recorded 197 Russian attacks on medical facilities across the country. Ukraine's Deputy Minister of Health Pavlo Kovtuniuk has noted that, while only a percentage of the nation’s hospitals have been damaged, “facilities are being destroyed exactly in the areas where needs are becoming most acute.” 

On the weekend ahead of Russia’s Victory Day celebration, bombardments leveled a school in the the village of Bilohorivka, near Luhansk, killing 60 people sheltering inside. As of May 13, Omar Abdi, deputy executive director of UNICEF reported that “126 educational institutions have been entirely destroyed and 1,509 more have been damaged.” With hundreds of children already dead, and hundreds of thousands’ education disrupted, the UNICEF has warned of long term threats to Ukraine’s stability. 

The cities of Mariupol, Kharkiv, Chernihiv, Sumy and Rubizhne have lost 35.2 million square meters of their homes. The infrastructure damages alone have been estimated at upward of USD 100 billion. The Kyiv School of Economics has recorded the destruction of “208 factories and enterprises, 508 healthcare institutions, 562 kindergartens, 156 warehouses, 992 educational institutions, 295 bridges and bridge crossings, 102 religious buildings, 83 administrative buildings, 27 oil depots, and 12 civilian airports and [that] have been damaged, destroyed or seized.” 

Ukraine’s Ministry of Economics and the Kyiv School of Economics have estimated economic losses due to the war between USD 564 billion and USD 600 billion (approximately six times the annual budget of New York City). The estimate includes direct damages as well as indirect damages: “GDP decline, investment cessation, outflow of labor, additional defense and social support costs” 

The International Monetary Fund predicted a 10 percent decline in Ukraine’s GDP, emphasizing that 

the intensity of the ongoing conflict is causing widespread destruction to Ukraine’s productive capacity and rapidly worsening the outlook. Increasing loss of physical capital stock and mass migration would result in a significantly more pronounced output contraction, a collapse in trade flows, further diminished tax collection capacity, and a greater deterioration in the fiscal and external positions.

The aid necessary for reconstruction would eclipse the Marshall Plan, which brought Western Europe out of the destruction of World War II with USD 13 billion in American support (USD 135 billion adjusted for inflation.) While significant, money alone won’t fix the problem. The United States spent USD 208 billion on reconstruction in Iraq and Afghanistan with little to show for it

The success of the Marshall Plan hung on three vital pillars: effective bureaucracy, security guarantees, and self determination. A team of transnational Europeans and Americans implemented the administrative infrastructure to carry out the “intricate, sometimes obscure details of long-term economic restructuring, industrial and agricultural infrastructure, international finance and trade.” NATO, also known as the military European Recovery Program, ensured external stability. Finally, European nations took on the onus of planning themselves.  

International recovery plans 

As the war continues and destruction proliferates, proposals have been floated to source the funds necessary for reconstruction. President Volodymyr Zelenskyy has maintained that Ukraine needs at least USD 7 billion a month to pay for essential national services. The European Union and the United States have already given tens of billions to keep the Ukrainian government afloat. At an April meeting in Brussels, European lawmakers planned to prepare a long-term funding instrument to foot much of Ukraine’s reconstruction and reforms. But inflation and global recessions concerns could jeopardize such long term commitments to Ukraine. 

Some international proposals have suggested using seized oligarch assets (valued at USD 30 billion) and central bank reserves (valued at USD 300 billion) to rebuild destroyed Ukrainian infrastructure destroyed by Russia. This scheme wouldn’t be out of the ordinary. The United States used half of Afghanistan's frozen Central Bank assets on humanitarian aid.

There are obvious issues with such proposals. Selling frozen yachts, real estate, and financial instruments of Russian oligarchs will take years. The plan would also further antagonize the Russian elites and add fuel to the domestic propaganda fire. Both American and Russian lawmakers have criticized the legality and implications of such an initiative. While unprecedented, a compensatory approach to the Articles on the Responsibility of States for Internationally Wrongful Acts, coupled with a multilateral effort, could offer a path for a legal foundation

Philip Zelikow, professor of history at University of Virginia and a past member of the President’s Intelligence Advisory Boards and Defense Policy Board, pointed out the perversion of the “illegality” argument

Just in 2022, Russia is on track to earn at least USD 200 to USD 300 billion (or more) from energy sales, with its earnings greatly enlarged by its illegal war. If, on top of that, Russia’s frozen assets are merely locked up instead of put to use compensating Ukraine and other injured states, and if Russia also gets a veto power over performance of the obligation to compensate, then the whole point of the international legal obligations will become perverted—such an interpretation of international law would work to the advantage of the outlaw aggressor, destroying the rights of the injured state, which the law is supposed to serve.

Additionally, Ukraine has sought professional global support. In late April, the head of the British Architecture firm Foster + Partners, Norman Foster, met with the mayor of Kharkiv, Ihor Terekhov, to discuss the rebuilding of the city. Foster stated that his intention is “to assemble the best minds with the best planning, architectural, design, and engineering skills in the world to bear on the rebirth of the city of Kharkiv.” Starting with a master plan for the city, the firm intends to “combine the most loved and revered heritage from the past with the most desirable and greenest elements of infrastructure and buildings.” In the past, Foster + Partners has designed masterplans for cities in Vietnam, Sweden, Kuwait, India, Germany, and others

It remains unclear what the extent of Ukraine’s international rebuilding consensus will be or the guaranteed commitment of international bodies to support the country out of the war. 


Image courtesy of Giovana Fleck.

For more information about this topic, see our special coverage Russia invades Ukraine.

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