This week, G7 finance ministers said that they – together with the international community – will be helping Ukraine to the tune of more than US$ 24 billion this year and beyond. And the door is open for more.
However, this is just a drop in the ocean of blood and destruction in Ukraine. Already three weeks into Russia’s invasion, President Zelenskyy had estimated that Ukraine had suffered half a trillion US dollars’ worth of damage to housing and infrastructure, let alone the ongoing cruel cost of human suffering and death.
Western countries are reported to have frozen at least half of the Russian Central Bank’s estimated US$ 600 billion of foreign currency reserves which are in their possession. Rather than help its own people have better lives, Russia is said to have been gradually putting aside such a colossal sum since Crimea’s 2014 annexation to have a handy “fortress Russia” war chest. They are now experiencing serious difficulties, as much of that prop is no longer available to them.
Add to that at least US$ 17 billion or much more of Russian Oligarchs’ frozen assets, and you are really starting to get closer to the costs of rebuilding eventually at least those areas that remain under Ukraine’s sovereign control once fighting stops.
There is a recent – albeit rather unfortunate – precedent for this. At the end of 2021, President Biden took the decision to appropriate half of the US$ 7 billion in frozen Afghan Central Bank assets to pay compensation to the families of victims of the 9/11 attack pending a court ruling. Many feel the full US$ 7 billion of Afghan funds should instead be transferred to a UN administered trust fund for humanitarian aid to be given directly for the Afghan people, bypassing the Taliban regime. Frozen assets under the West’s control can be redeployed.
This action has shown potentially the way forward in Ukraine. Russia could potentially be forced by the West to pay for much of Ukraine’s reconstruction if the West is prepared to take such a step.
Russia is said to be attempting to take legal action to get its money back. However precedent shows that they may be unsuccessful. According to the Guardian newspaper, the UK supreme court ruled last December against a Venezuelan appeal to allow access to its central bank reserves of almost US$ 2 billion of gold it held at the Bank of England.
This week, Russia tested its new Sarmat intercontinental ballistic missile, which is capable of carrying nuclear warheads. Putin said this would make Russia’s enemies “think twice”. The West needs to be much better in making Russia think twice, by making it clear the more they destroy, the more they have to pay.
Every missile or artillery shell that hits a Ukrainian target should cost Putin dear.
* George Cunningham is a member of the Federal International Relations Committee, Chair of Lib Dems Abroad and a member of ALDE Council. He was proposing the motion on China at Autumn Conference.