How the West can make Putin pay for what he did to Ukraine Business

Yulia Svyrydenko, Ukraine’s economic development and trade minister, said that with the Black Sea effectively closed off by Russian ships, the country needs to build more connections to the west.

“Our main task now is to upgrade and increase the throughput capacity of our railways, roads, highways,” she said at a recent reconstruction conference in Warsaw.

The country’s government has signed new agreements with Poland to expand border crossings to get going.

Igor Burakovsky, director of the Kyiv Institute of Economic Research and Policy Consulting, said the Ukrainian government was also helping businesses adapt with a relocation program to move personnel and equipment from dangerous parts of east to the center and west of the country.

“The government is trying to help people ship needed equipment and materials to new places,” he says.

This includes finding new suppliers, new routes to market and even manpower, whether finding accommodation for staff moving across the country or new hires. if necessary: ​​”they can’t move everyone – some people have gone to war”.

Official figures indicate that more than 400 companies have been relocated, of which just over half are operational again.

Energy self-sufficiency is on the agenda – Svyrydenko says it can be done “within three to five years” – while the country also wants access to Western military technology so it can arm itself with energy. ‘coming.

In the long term, it will be crucial to try to encourage investment in eastern Ukraine, where companies may fear venturing back into the Kremlin.

Vyshlinsky, of the Center for Economic Strategy in kyiv, suggests offering additional guarantees or assurances to investors investing in the region, in order to avoid abandoning whole swathes of the country to a permanent economic depression.

Perhaps the most important thing will be to encourage the refugees to return.

The International Labor Organization estimates that of the 5.2 million refugees who left Ukraine, 1.2 million were of working age.

According to Burakovsky, up to one in five of those who have been to Poland may have already found work, potentially reducing the chances of them returning home even once it is safe to do so.

If reconstruction does not begin quickly, providing homes for refugees to return to with jobs they can do when they arrive, he fears that the families of refugees – usually husbands and fathers, as those who leave are mainly women and children, while men are largely excluded from crossing the border during the war – will follow in the years to come.

Funding the restoration of Ukrainian homes and jobs and the reunification of separated families may not be such an outrageous use of Russian money.

What other war-torn countries have used seized assets to rebuild?

By Louis Ashworth

If the West seizes frozen Russian assets to fund Ukraine’s post-war reconstruction, it will be far from unprecedented.

Joseph Borrell, the EU’s top foreign policy official, spoke of similar actions in the past, including against Afghanistan’s central bank.

“We have the money in our pockets, and someone needs to explain to me why it’s good for Afghan money and not good for Russian money,” he told the Financial Times.

In February, US President Joe Biden invested $7bn (£5.7bn) in assets held by Afghanistan’s central bank and held in US institutions. Cutting off the Taliban’s access to the US financial system, he announced that $3.5 billion from the pile would go to humanitarian aid, and the rest to the families of 9/11 victims.

The White House said the move would “pave the way for funds to reach the Afghan people, while keeping them out of the hands of the Taliban and malicious actors.”

Such seizures – of which a Russian would be by far the largest – have occurred before, but rarely.

In 2003, the Bush administration seized $1.4 billion in Iraqi assets, some of which had originally been frozen during the Gulf War a decade earlier. Treasury Secretary John Snow said the funds would be used to help rebuild America after the war.

The country also seized Cuban assets in 1996, with the money later used to compensate the families of three American pilots who were killed by the Cuban military.

With Russia, the potential seizure would be much larger. The Kremlin had accumulated $640 billion in foreign currency and gold before its invasion of Ukraine. Early in the conflict, the West decided to limit Vladimir Putin’s access to this war chest – freezing about half of the pile.

Even if the West does not carry out a full seizure, even deciding when to unfreeze the assets could prove a difficult decision.

More than $1 billion in Iranian government assets held in the United States were frozen by President Jimmy Carter in 1979, ten days after 52 American citizens were taken hostage at the US Embassy in Tehran .

This action, Executive Order 12170, sparked decades of demands from Tehran, which eventually filed a complaint in The Hague. Some of the money has since been returned to Iran – including $400 million stolen in 2016 in exchange for the release of five American hostages.

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This notice was published: 2022-05-14 05:00:00

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