While the war in Ukraine shows no signs of ending any time in the near future ~ with both sides talking of fresh attacks ~ some Western countries may be on a slippery slope as they contemplate ways to fund the eventual reconstruction of the embattled country. Western concerns are linked to the presence of Ukrainian oligarchs, who may be lying low for now but are widely expected to join the process of reconstruction, because that is where the money will be.

A recent report from an American think tank, the German Marshall Fund (GMF), which seeks to strengthen the trans-Atlantic relationship, warns that “Ukrainian oligarchs are biding their time until after the war to reassert their influence.” It adds: “In the face of those realities, continuing to uproot oligarchy ~ a critical part of winning the war, rebuilding the country and preparing for EU accession ~ will require heavy domestic and foreign support. Beyond the executive branch, the parliament and the judiciary remain penetrated by powerful, unaccountable and obscure private interests.” While the government of President Volodymyr Zelenskky claims to have initiated several steps to break the stranglehold of corruption which is endemic to Ukrainian society, the recent report raises concern that these initiatives by the government in Kyiv may be less effective than they are made out to be. A joint assessment by the Government of Ukraine, the World Bank, the European Commission and the United Nations in March had put the cost of Ukraine’s reconstruction at $411 billion dollars, a figure somewhere between the annual GDP of Thailand and Pakistan. Three months after the report, that cost could only have gone up and it is clear Ukraine’s benefactors in the West will have to find ways to fund this huge sum in a way that ensures it does not end up lining the pockets of oligarchs.

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It is in this context that a plan proposed by the United Kingdom has roused controversy. London proposes laws to maintain sanctions on Russian assets and in effect find a way to donate the seized sums for Ukraine’s reconstruction. Even as other Western nations warn that this will set a dangerous precedent ~ for it will allow other nations to seize Western assets ~ the British say they will resort to such measures only if there is evidence of criminal conduct. Britain has proposed that sanctions be maintained until Russia agrees to pay compensation. But all this is easier said than done, and will certainly put Western assets in authoritarian states at risk. It is for this reason that the GMF warns Western countries to come to agreement on policy initiatives to be taken for the reconstruction of Ukraine. Such initiatives must of necessity determine where the funds will come from and how they will be spent, bypassing Ukraine’s rapacious oligarchs.