Ministerial Roundtable for Support to Ukraine

Thursday, Apr 21, 2022 | 02:30 PM - 03:00 PM

Location: SEC Virtual 03

Description:The war in Ukraine is having a devastating impact on the country’s economy. The World Bank estimates that Ukraine’s economy will shrink by almost half this year, trade has largely halted, and the country’s infrastructure has sustained heavy damage. In addition, there is a large humanitarian crisis – an estimated 5 million people, about half of whom are children, have become refugees in other countries, and another 7.1 million people have been displaced internally (UNHCR estimates). The war has dramatically impacted the Government of Ukraine’s ability to sustain essential government services, provide for social protection and humanitarian needs, and make critical time-sensitive investments. The World Bank Group and the Government of Ukraine are planning a roundtable discussion on Thursday, April 21st to better understand the scope of Ukraine’s immediate financing needs, and to discuss how the international community can come together to support those needs.*Watch Live|https://live.worldbank.org/sm22/roundtable-ukraine*

This event will be live-streamed here

Report

The speakers strongly condemned Russia’s invasion of Ukraine and urged an immediate cessation of hostilities. Noting the devastating impact of the war in Ukraine, the discussion focused on the country's need for both immediate and long-term financing to stem the current crisis, focus on recovery, and help rebuild the country with strong international cooperation.

Key Points:

The perils of war. Nearly two months of war has wreaked havoc on Ukraine’s people, businesses, and critical infrastructure precipitating an unparalleled humanitarian and economic crisis, highlighted Zelensky. With its GDP nearly halved, the country is looking at direct and indirect war-induced losses of $560 billion, of which infrastructure losses alone account for $100 billion, said Shmyhal. Zelensky also sought immediate support from the international community and a further political and economic isolation of Russia, including an imposition of a tax on war on Russia for destroying global stability.
A Marshall Plan for Ukraine. Outlining several war-time measures implemented by the Ukrainian government to avoid business shutdown and provide financial security to vulnerable populations, Shmyhal appealed for a Marshall Plan for Ukraine’s recovery and reconstruction efforts, which are estimated to cost $600 billion. Shmyhal also urged partners to channel 10 percent of newly allocated SDRs to support the country’s financing needs.
Role of IMF and World Bank. An early World Bank assessment pegged Ukraine’s physical damage at $60 billion. Given the large non-military fiscal deficit faced by Ukraine’s government and state-owned enterprises, the World Bank group mobilized more than $3 billion to support continuation of essential government services through a multi-donor trust fund (MDTF), guarantees, and parallel financing, said Malpass. IMF swiftly responded to the crisis by approving $1.4 billion in emergency financing and setting up a $1 billion administered account to provide secure direct dollar financing to the country. Given the $5 billion short-term financing gap Ukraine faces for the next two-three months to provide vital government services, per IMF estimates, Georgieva highlighted the need for grant or highly concessional financing to avoid accumulating high debt levels. Additionally, IMF is also working on deploying ‘idle’ SDRs at a ‘low cost’ to Ukraine, said Georgieva.

Quotes:
“Our people, the residents of Kharkiv, even during the war, during those firing strikes, Kharkiv has remained a functioning city...despite everything, they're planting flowers in Kharkiv, trimming the trees, cleaning the streets, keeping the city in a good shape. That’s what Kharkiv is like. That’s what our country is like.” Volodymyr Zelensky “Everything from bakeries to food warehouses, machine building enterprises and petroleum storages…everything is being bombed...is under strikes.” Denys Shmyhal

“We have a duty to you [Ukraine] and a duty to ourselves." Kristalina Georgieva

“War is first and foremost a human tragedy." David R. Malpass

Contributor: Smita Aggarwal