The Foreign Service Journal, October 2022

36 OCTOBER 2022 | THE FOREIGN SERVICE JOURNAL population. Only three days after the expansion of hostilities, Russian armed forces bombed a critical dam that blocked water access to Russian-occupied Crimea. That negatively affected water supply in Ukraine’s agriculturally rich Kherson region. Clean water for the population and expanded agricul- tural irrigation will also be essential for rebuilding Ukraine’s food sector. Pipes, pumping stations, water conservation tech- nology, potable water infrastructure, and wastewater treatment centers will be needed in all affected areas. More than 600 health care facilities have been intention- ally damaged or destroyed, a practice widely used by Russian armed forces in Chechnya and Syria. All of Ukraine’s health care system is by necessity on a war footing, responding to battlefield injuries and limited rehabilitation. This has often displaced the health care needs of the general population, which suffers from high rates of tuberculosis and low rates of immunization for infectious disease, including COVID-19. In the short term, surgical supplies, anesthetics, intensive care unit equipment, and essential medicines will be needed to sustain wartime care. In the longer term, hospitals and clinics, including specialized care for burn treatments, amputees, veterans, and mental health disorders, will be in critical need. Reforms to decentralize health care budget resources and accountability to the regions should also continue. Rebuilding Strong European-Standard Institutions Ukraine reconstruction will require not just brick-and-mortar investment, but hard work on rebuilding and strengthening insti- tutions that will once and for all break with the country’s oligar- chic Soviet past. Ukraine began intensified economic reforms in 2014, with clear successes in banking, public procurement, and taxation. But more will need to be done to regain the confidence of international donors and investors, including further deregula- tion, limitation of the state’s role in the economy, reducing the role of oligarchs, and digitalization of public services. The 2021 report of the European Court of Auditors on corrup- tion in Ukraine noted some progress and considerable remaining challenges. Ukraine’s Anti-Corruption Strategy, adopted in June 2022, properly focuses on customs and taxation; the courts and law enforcement; regulation; and construction and land man- agement—all areas that have been sources of corruption since Ukraine’s modern independence in 1991. Importantly, Kyiv has laid out a plan to manage such risk through the establishment of a separate agency to review reconstruction efforts and provide public oversight to planning, procurement, and implementation. The E.U.’s cumulative body of community law can also provide important leverage to ensure Kyiv takes the right, painful steps to enforce the rule of law and root out corruption. As E.U. Presi- dent Ursula von der Leyen said earlier this year, “Reconstruction should combine investment with reforms. In time it will help Ukraine on its European path.” The detailed legislative and imple- mentation road map presented by the Ukrainian government at the Lugano conference shows seriousness of intent, but the proof will be in the pudding. Private investment will form a large part of the capital pool in Ukraine reconstruction, but only if the busi- ness environment improves significantly. The U.S., Ukraine, and their partners and allies have a key weapon in their arsenals: the resources and ingenuity of their private sector. Within weeks of the war’s expansion, thousands of American, European, and other firms closed their opera- tions permanently in Russia, reacting to strong public opinion against doing business there. Per Yale’s Chief Executive Leader- ship Institute, more than 250,000 Russians lost their jobs from this Western corporate exodus. For the first time since the Cold War, the U.S., E.U., and nearly 40 partners have put in place export controls on critical technologies to Russia, working closely with the private sector. Sanctions implemented by private financial institutions have crippled the Russian economy; its GDP is expected to drop by 5–10 percent this year alone. American, Ukrainian, and interna- tional firms in Ukraine continue to contribute directly and indi- rectly to the war effort, through support of the Territorial Defense Forces; provision of key IT, logistics, and transportation products and services; and provision of jobs to Ukrainians. And the private sector in Ukraine remains resilient: 60 percent of AmCham Ukraine members noted they plan to continue to operate despite the war, and 96 percent plan to do so in 2023. In any reconstruc- tion effort, it will be the private sector that will bear the brunt of implementation, from initial planning to “last mile” completion. Kyiv has sensibly divided its reconstruction effort into three phases: emergency aid to address urgent needs; deeper, broader efforts to rebuild affected infrastructure; and long-term sustainability.