Over 40 countries and international organizations such as the European Investment Bank and the Organization for Economic Cooperation and Development signed the Lugano Declaration on July 5, committing to support war-torn Ukraine in what is expected to be a long and expensive rebuild.
Following the two-day, high-profile Ukraine Recovery Conference in the southern Swiss city of Lugano, world leaders condemned "in the strongest terms" Russia's brutal invasion and agreed to long-term political, economic, and technological assistance to Ukraine.
"This a key step on the long path to Ukraine's recovery," Swiss President Ignazio Cassis, who co-hosted the conference with Ukraine, said, welcoming the declaration. "This should give the Ukrainian people hope and the certainty that they are not alone."
The document, whose signatories includes the United States, Germany, France, Japan, and the United Kingdom, outlines a set of principles to guide a reconstruction and development effort the Ukrainian government says could cost up to $750 billion.
The "guiding principles" in the declaration envision partnerships between Ukraine and its international supporters, a focus on domestic reforms, and the bringing together of multiple stakeholders as crucial to reconstruction. They also underline the importance of the transparency of the recovery process, as well as inclusion, ensuring gender equality, and rebuilding in a "sustainable manner."
Ursula von der Leyen, European Commission President, told the conference that the task is colossal, and Ukraine still needs "courageous reforms" in areas like the rule of law and fighting corruption.
"But reforms should go hand in hand with investment," von der Leyen said.
Two-stage $750 billion recovery plan
Prime Minister Denys Shmyhal on July 4 laid out the government's 10-year, 850-project reconstruction plan, which is focused on the immediate needs of those affected by the war and maps out a broad list of long-term infrastructure and security projects, as well as green and digital economy programs.
The full implementation of the plan, with a draft framework of around 2,000 pages that touches almost all key areas and branches of the Ukrainian economy, is estimated at $750 billion.
The plan, slated for 2023-2032, will take place in two phases. About $350 billion will be needed to implement the the first phase, a medium-term framework of "rapid reconstruction" from 2023 to 2026, to restore hospitals, schools, and housing.
The second phase of the plan, from 2026 to 2032, is a long-term plan to modernize Ukraine's infrastructure and economy and will focus on preparing Ukraine for EU membership through reforms and creating a green digital economy.
According to Forbes, $60-65 billion must be raised this year for emergency humanitarian help.
President Volodymyr Zelensky said the Ukrainian reconstruction plan represented "the most ambitious project of our time."
"Reconstruction of Ukraine is not a local task of a single nation. It is a common task of the whole democratic world," he said in a video address to the conference, adding that Russia's war "is not just an attempt to seize our land and destroy our state, but also a worldview confrontation."
The Lugano Declaration on July 5 recognized the Ukrainian draft plan as an overarching framework guiding the recovery process.
"The Ukrainian plan as a living document which will need to be consulted and adapted over time to reflect changing circumstances, and confirmed that Ukraine will lead," the document reads.
Shmyhal said a substantial funding source for the recovery should come through assets confiscated from Russia and its tycoons, which, according to various estimates, could be anywhere between $300 billion to $500 billion. The rest could cover loans and grants from allies, and international organizations could cover the rest, as well as private sector investment, he added.
In late June, Canada became the first country to allow the confiscation of assets subject to sanctions due to Russia's war and their subsequent use to support Ukraine. Its government has blocked assets worth $328 million due to sanctions.
British Foreign Secretary Liz Truss said the U.K. wants to follow Canada's example.
However, not all countries are in agreement. Swiss President Cassis, opposed the idea, saying protection of property rights was fundamental in a liberal democracy, and the confiscation "will set a dangerous precedent and needed specific legal justification."