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War is deadly, destructive, expensive and lucrative. While the Ukraine war has cost the lives of 9,655 Ukrainian civilians and 15,500-17,500 soldiers. The World Bank has estimated the expenditure on rebuilding will be more than $400 billion over ten years. Since Russia’s invasion of Ukraine, most of the 30 NATO members have committed more than $80 billion worth of military, humanitarian and financial aid to Kyiv. Of this $65 billion has been military aid. The US, the largest single weapons donor, delivered $21.1 billion worth of arms from its stockpiles plus $17 billion financial and humanitarian aid. Europe Union has donated $32 billion, Britain $10.75 billion, Germany $7.5 billion and Japan $6 billion.
The Ukraine war has created a boom for Western arms manufacturers which are clearing stocks, upgrading and making more arms to meet demand while Russia, formerly the second largest arms exporter after the US, has held onto its supplies and seen sales decline. Increasing demand has, however, been accompanied by shortages in raw materials and components, creating bottlenecks that slow production and deliveries. In the future when the pressure eases, arms manufacturers expect more purchases by countries like Germany which intend to increase spending on weapons.
Pundits have predicted that the Ukraine war could continue as long as the flow of weapons continues to Ukraine since President Volodymyr Zelensky is determined to defeat Russia and claw back the territory which Russia holds, including Crimea. This is precisely what Western hawks and arms manufacturers want. Hawks wrongly see Russia as the West’s old foe, the Soviet Union, while arms makers are eager to rake in billions in profits.
In 1961, outgoing US president Dwight Eisenhower — who commanded Allied troops in Europe during World War II — admitted that to keep the peace the US was “compelled to create a permanent armaments industry of vast proportions” but he warned that the large post-war military establishment and arms industry posed great dangers. “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”
This is exactly what has happened since World War II. New generations of US politicians and military men have planted 1,000 US military installations in 85 countries across the world. From the end of World War II to 2001, the US is responsible for 201 of the 248-armed conflicts which have taken place in in 153 territories. This amounts to more than 80 per cent of these conflicts. Since the attack on New York and Washington in 2001, additional US wars and military operations have killed hundreds of thousands of civilians and displaced tens of millions of people. The military-industrial complex has played a large part in these wars and has wielded considerable power with the aim of promoting conflict where negotiations might have saved lives and prevented devastation wreaked by warfare.
International firms already in place in Ukraine and in line for its reconstruction effort are no less rapacious than the military-industrial complex and wield considerable clout with their home governments. Some companies have been involved in maintaining Ukraine’s power plants, railways, aircraft, and infrastructure while the war has raged. Governments have set aside millions of dollars to help finance reconstruction.
The Ukrainian Chamber of Commerce has called the country “the world’s largest construction site”. Patricia Cohen and Liz Alderman writing in The New York Times in February of this year made the point that Zelensky seeks to use reconstruction “to stitch Ukraine’s infrastructure seamlessly into the rest of Europe”, thereby decoupling Ukraine from its Russian neighbour. They added, “Ukraine, whose economy shrank 30 per cent last year, desperately needs funds just to keep going and to make emergency repairs. Long-term reconstruction aid will depend not only on the outcome of the war, but on how much money the European Union, the United States and other allies put up.”
Private investors are so far “not willing to risk committing money now” while the conflict continues. Although there have been multiple conferences on rebuilding, the majority of companies attending have been more interested in selling goods and services rather than investing, the article said.
Investors remain cautious not only because of the war but because Ukraine has a reputation of being one of the most corrupt countries on earth. Even while the conflict has been going on officials and politicians were found to be profiteering and there were reports that weapons Ukraine needs at its multiple war fronts have turned up in Africa. Ukraine will have to demonstrate that it is willing and ready to crack down on corruption and provide transparency in reconstruction dealings when the sixth annual Ukraine Recovery Conference convenes in London on June 21st-22nd. Unless Ukraine fails to show how accountability and transparency are to govern reconstruction, the country is unlikely to secure the massive funding needed.
Ukraine has to deliver on seven preconditions to be considered worthy of investment. These include reforming the Constitutional Court, the High Council of Justice and the High Qualification Commission of Judges. On corruption, reforms must be in place for prosecuting graft, combating money laundering and controlling the oligarchs who still hold considerable power. Ukraine must free media and adopt legislation to protect national minorities. These conditions have also been set for Ukraine’s qualification for applying for EU membership.
Ukraine is certain to face graft challenges when the time comes for reconstruction. Countries which have provided arms and aid for the war will demand preferential treatment when bids are made for projects. There will be no equal bidding field. Transparency and accountability will be ignored. The Marshall plan which invested $13.1 billion ($177 billion now) to help rebuild Western Europe following World War II has been seen as a grand humanitarian enterprise which benefitted Germans, French, Dutch, Italians, and others. A great deal of the investment in their countries came from US companies and the US economy enjoyed a spurt in growth thanks to the Marshall plan.
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