Finland and Ukraine’s Reconstruction

Jaakko Lehtovirta
Ambassador of Finland to Ukraine

Russia invaded Ukraine in 2014. Annexation of Crimea was a brutal blow to the rules-based international order. The following 8 years were marked by continuous violation of Ukraine’s sovereignty and neglect of international law. Global outrage and sanctions did not stop Russia. February 24th of this year brought a full-scale invasion. However, Ukraine managed to stop the onslaught, and Russian army failed to capture Kyiv. With the help of the international community, Ukraine has turned the tide and liberated significant areas of its territory.

Unable to match the skill and motivation of the Ukrainian armed forces, Russia has since 10th of October resorted to massive terror bombing of Ukraine’s energy system. Strikes against civilian infrastructure reached another peak on 23rd of November. Ukraine is now in dire need of technical and financial assistance to get through the winter. However, Ukrainians are not giving up. In the middle of the war, they are planning for further liberation and reconstruction of their country.

When does reconstruction start? The question is somewhat academic. Ukraine cannot wait until hostilities cease for good. I see reconstruction as something that has already begun, but is bound to increase exponentially as remaining occupied areas are liberated and the military threat decreases. Fixing the damaged electricity infrastructure is an ongoing part of Ukraine’s reconstruction.

Full reconstruction of the war-damaged country is a massive task, comparable to the job Europe faced after World War II. In September, World Bank, European Commission and Ukrainian government estimated the cost of rebuilding Ukraine to be around 349 billion USD. That was before the campaign against Ukraine’s energy infrastructure. Now, the cost keeps rising by the day. All fighting causes inevitable damage. There is also the haunting unknown of what has happened in the Russian-occupied territories, some held for over eight years.

Who will coordinate the reconstruction effort? In Ukraine, it is up to Ukrainian government to decide. Requests for help come from all levels, and if it is easiest for cities to work directly with foreign cities, let it be so. Still, it is perhaps useful to avoid parallel efforts at every level. There are also initiatives for countries to take patronage over a certain region. Occasionally it may work, but some feel a sectoral approach might be better.

Internationally, there may be a need to identify a guiding organisation or establish a system to direct funding for reconstruction. Ukraine is a European country with an EU membership perspective, and a strong EU role would feel natural. The German Marshall fund has concluded that the effort needs a G7 figurehead, preferably American, to ensure a lasting non-European commitment. Whatever way we go, the key is not to turn this into a donor turf war but keep focus in Ukrainian needs and donor efficiency.

Ukraine’s task is to maintain donor confidence. That requires uncompromising transparency, independent overview and steady progress with reforms. The seven points expected by the European Union are a good start. The willingness to help and the willingness to invest go hand in hand: one wants to know where the money goes.

Finland welcomes the EU candidate status of Ukraine, and we will support the reforms required. Principles guiding the enlargement policy remain, including the merit-based approach. This is not inflexibility. Ukraine would not benefit of membership in a union that compromises its own recipe of success. Ukrainians are not sacrificing this much simply to return to where they were before 2014. They deserve better. Europe, in turn, needs a flourishing Ukrainian economy.

Finland is ready to take part in Ukraine’s reconstruction. As a start, we can provide expertise in education, rule of law, energy security and climate resilience – cornerstones of our long-term development cooperation with Ukraine.

Finnish businesses have a lot to match Ukraine’s reconstruction needs. Our companies provide solutions to energy needs: power plants, smart grid solutions and nuclear energy knowhow. Telecommunications and digitalization are well covered. Water and sanitation solutions help rebuilding damaged cities. We are good in planning, engineering and management, when it comes to one of the biggest infrastructure need: roads and bridges. There are great solutions for housing and waste management.

There will be increasing competition, which is welcome. Russian market has turned toxic. Several companies, big and small, are looking for new partners and regions for investment. Ukraine with its large population, rapidly developing business environment, European perspective, fertile soil and – most importantly – impressive pool of human capacity will be an attractive destination. I remain confident that Finnish business is finding its role in Ukraine’s reconstruction.

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