The destruction and economic damage in Ukraine is already estimated at around 600 billion dollars. In the “Zero Hour” podcast, Russia expert Ziesemer explains why the sums are already so huge and how they are collected.
Every day we see images of the massive devastation in Ukraine, destroyed blocks of houses, factories and streets. The direct physical damage is already estimated at up to 100 billion dollars. According to experts, the total damage, including the slump in economic output, should be between 500 and 600 billion dollars. But why are these sums so enormous now?
“Russian warfare consists of trying to conquer territories like a steamroller,” explains Russia expert Bernd Ziesemer in the podcast “The Zero Hour”. “And that goes hand in hand with total destruction.” That is why this war is so expensive. “You have to realize that after just one hundred days, this war is economically the most expensive war that we have experienced since the end of the Second World War.” The type of warfare that is leveling factories and infrastructure has “devastating economic consequences” in a relatively developed country, according to the “Capital” columnist and long-time editor-in-chief of the “Handelsblatt”.
Since the beginning of the war, there have been experts who have documented the damage fairly meticulously. The KSE Institute at the Kyiv School of Economics, which works with the help of drones, is a leader. One employee refers to his team as the “accountants of horror”. At the end of March, the institute listed exact figures and damage totaling 63 billion dollars. “4,431 residential buildings, 92 factories/warehouses, 378 secondary and higher education facilities, 138 health facilities, 12 airports, 7 thermal/hydroelectric power plants were damaged, destroyed or confiscated.”
As of June 8, the KSE Institute recorded total direct damages as $103.9 billion. Since the beginning of the war, at least “44.8 million square meters of housing, 256 businesses, 656 medical facilities, 1,177 educational institutions, 668 kindergartens, 198 warehouses, 20 shopping centers and 28 oil depots have been damaged, destroyed or confiscated”.
“Such exact estimates are something new that we are experiencing for the first time in this war,” said Ziesemer, who was a correspondent in Moscow in the 1990s and researched the costs of the war for the current “Capital” issue. The listings are part of the “Russia will pay” project to enforce possible reparation claims later.
According to estimates by the Ministry of Economy of Ukraine and the KFE, Ukraine’s total war-related economic losses amount to between $543 billion and $600 billion. Overall, indirect losses were factored in, including the decline in economic output, a lack of investment and the emigration of workers.
According to Ziesemer, the war in the south and east in particular has enormous costs. “It’s about an area that is three times the size of North Rhine-Westphalia and is also similar in structure to the federal state.” The Donbass is also referred to as the “Ruhr area of ??Ukraine”. There are many factories there, steel industry, heavy industry, mechanical engineering. “The Russian style of warfare is designed to destroy virtually all infrastructure.”
It is already clear that Ukraine will not be able to handle the reconstruction on its own. This requires an “enormous effort over many years,” says Ziesemer. “Even now we have to realize that we cannot leave Ukraine alone.”
Hear more figures on the costs for Russia, Germany and the world economy in the new episode of “The Hour Zero”. There is also an update on the stock market slump and the ECB special meeting.
All episodes can be found directly on Audio Now, Apple or Spotify or via Google.
The new issue with the research by Bernd Ziesemer will be available from June 23 at the kiosk or at https://shop.capital.de/de_DE/einzelhefte/ individual-issues
