The experience of countries’ recovery: what Ukraine can learn from it

One of the biggest challenges facing Ukraine after the victory is the restoration of territories and infrastructure. Some cities have been completely wiped out, while others have been partially destroyed and are still under fire. The scale of the destruction is increasing every day – at the beginning of this year, the amount of damage caused to Ukraine as a result of the war exceeded $700 billion.

The restoration process will require a lot of time and effort. Its development can be somewhat accelerated by taking into account the experience of countries that have successfully gone through a similar path. History knows many examples of countries that have managed to recover from wars and natural disasters.

To successfully rebuild Ukraine, it is necessary to have an effective plan that includes both immediate actions and long-term strategies. We have analyzed the experience of rebuilding countries that may be relevant to overcoming the consequences of war. 

Let’s look at the main trends that have emerged in the process of reconstruction:

1. Financial support from international partners

The reconstruction of countries after wars or natural disasters usually began with the attraction of “seed money” – loans or grants. After the Second World War, the Marshall Plan, primarily aimed at restoring industry, became such a support for the affected parties. 

Later, emergency response instruments from IFIs were used to support countries in crisis situations, such as suspension of payment or partial write-off of external debts. 

Grant and humanitarian aid to the affected countries, which often also comes in cash, also plays a significant role in the reconstruction.  

We did not find a direct correlation between the amount of funding and the success of reconstruction. Instead, we identified certain obstacles that prevented countries from managing their finances effectively. For example, an error in damage assessment – most countries underestimated the extent of their destruction. 

However, corruption proved to be a more serious problem. When money is not used honestly and transparently, it increases the risk of cost overruns, deterioration of the quality of reconstruction, and loss of partner confidence. This is what happened in Iraq – the country received more than $94 billion from the international community, but failed to use it effectively. In contrast, Finland, without Marshall Funds, had virtually zero tolerance for corruption. Today, the country is a member of the EU and on the verge of joining NATO, while Iraq is still struggling with the consequences of the war. 

Corruption is not the only reason for this difference in the welfare and development of these two countries, but it is one of the determining factors in building the future. 

2. Institutional architecture of reconstruction

Almost all countries have tried to conduct reconstruction in an organized and comprehensive manner. In this context, three main components that have accompanied the reconstruction process in one way or another draw attention:

• A written declaration of tasks and goals. A program, plan, law, or other legal act contains a set of guidelines and decisions on priorities, resources, methods, and implementers of recovery and reconstruction tasks, etc. The most famous ones were primarily concerned with saving the economy (Marshall Plan, Dodge Plan, Monet Plan, Hirsch Plan) and often helped to achieve the goals set. However, there were also comprehensive plans aimed at rebuilding and restoring everything vital, such as the General Plan for Rehabilitation and Reconstruction in Indonesia. 

• Renewal of the institutional network. Each of the countries studied faced the issue of transferring authority to manage and coordinate the reconstruction process. To address this issue, a new government body with all the powers was created, or special organizations with a specific purpose were established.

• Optimization of policy activities. War or a natural disaster temporarily puts the improvement of the population’s welfare on the back burner. A new agenda emerges, focused on meeting emergency and basic needs. Many countries found it difficult to develop new rules and policies because of the centralized decision-making system. Those that already had a decentralized system in place before the disaster (Finland) found it easier to coordinate reconstruction and match needs with solutions.

3. Investing in the future

The research led to the hypothesis that the more damage a country suffered after a war or disaster, the more it paid attention to the education of its population. Thus, in one case, the goal could be to eliminate illiteracy in society (e.g., South Korea), in the other – to build an innovative knowledge economy (e.g., Finland). In both cases, the development of science and education was among the top priorities of postwar reconstruction. 

Ukraine has compulsory and free education. However, it is also important to have a civic education and critical thinking, especially because of the historical past and current events. This is key to the development of civil society and the future of Ukraine.

Key lessons for Ukraine

1. European integration has helped the countries studied to implement economic reforms and improve political stability. Poland, Croatia and Cyprus have benefited from the EU accession process itself. The process of European integration promotes democracy and ensures the rule of law.
2. The need to improve the quality of life of veterans and internally displaced persons has become a very important issue for many countries after wars. Research on post-traumatic stress disorder in the United States and Vietnam, as well as practices in coordinating military resettlement in Finland and Croatia, can be useful in developing or improving policies in Ukraine.
3. The institutional architecture of reconstruction is a particularly important issue for Ukraine.  The countries studied used different models for reconstruction, depending on many different factors, such as context, resources, and the country’s level of development. However, each country has its own peculiarities, so the same policies do not always produce the expected results. We can divide these models into several components: governance, financing, and strategy. It is important to study each component and its effectiveness, as the institutional architecture of reconstruction will be formed in any case.    
4. The use of a project-based approach to reconstruction now looks very attractive for Ukraine. However, there is currently no established strategy for its implementation. Indonesia has successfully applied the project approach to rebuild its country. But they realized that if they did not involve the community in planning and control, problems could arise, such as spending money without proper control. This example provides useful advice for Ukraine on how to guard against such risks.
5. After the victory, the most important need for the population will be the restoration of housing, energy facilities, and infrastructure. However, a study of 16 countries that rebuilt after the war showed that it is better to invest in education, science, and technology, as this will help the younger generation. Ukraine also needs this to get rid of the Soviet legacy. It is also important to develop technologies, including IT and creative industries, which can have a positive impact on the economy in the future.

Thus, there is no single algorithm for reconstruction – each country studied used its own strategies. Of course, not all of them were successful, but certain decisions can serve as the basis for an effective plan for Ukraine’s recovery. 

This publication has been produced with the financial assistance of the European Union. Its contents are the sole responsibility of the NGO “Institute for Analysis and Advocacy” and do not necessarily reflect the views of the European Union.