Building Ukraine 2.0

After two weeks Ukraine’s counter-offensive is falling behind plan. Its forces have retaken some territory, but they have suffered losses and have yet to penetrate the kilometres-deep array of Russian minefields, tank traps and trenches. Even if they break through some lines, they risk being pinned down and destroyed by enemy artillery and drones.

That is a sobering prospect. However, the vast majority of Ukraine’s troops have yet to enter the battle and, until they do, nobody—not even Ukraine’s generals—can know the two sides’ true strength. In the coming weeks the Ukrainian army will establish whether or not Vladimir Putin can hold his ground, and set the military terms for the rest of the conflict.

The home front is less dramatic, but everything depends on it. Russia may continue to occupy tracts of land, but if Ukraine ends up prosperous, democratic and secure, then Mr Putin’s war will have failed utterly. By contrast, if Ukraine takes back territory only to sink into a morass of corruption, poverty and political violence, it will have surrendered the ideals for which its citizens have fought so bravely. A conference in London this week and a NATO summit in Vilnius, in Lithuania, on July 11th-12th are laying the foundations for success or failure.

Ukraine’s nation-builders face formidable obstacles. The greatest is that, while Mr Putin is in power, this war is unlikely to end with a solid peace treaty. The two sides may talk—if only to avoid being seen as war-crazy. But Mr Putin’s word is not to be trusted and Ukraine will be unwilling to formally sign away its claim to any territory that Russia still occupies. Instead the two armies could dig in. An informal ceasefire could follow, or a low-intensity conflict broken by missile strikes, a continued blockade and fitful, probing offensives.

The other obstacles are almost as formidable, though at least it is in the power of Ukraine and its allies to overcome them. About 6.2m Ukrainians have fled abroad: their country needs them back. More than 1m fighters will return from battle, many bearing injuries and mental trauma. The World Bank has estimated that repairing the damage from the first year of war will cost more than $400bn—and that was before the collapse of the dam at Nova Kakhovka, most likely because of Russian sabotage. Last, as Ukraine leaves behind martial law, it must overcome a history of corruption and misgovernment that Russia has long exploited to corrode Ukrainians’ faith in their leaders.

To succeed, Ukraine must work on many dimensions at the same time. To attract workers and private capital, it needs to rebuild itself. To unleash the creativity and enterprise of its citizens, it must live by the rule of law. To deprive Mr Putin of a veto over its prosperity, it must ensure that its skies and cities are safe enough from Russian aggression for normal life to flourish. Each of these depends on the others, and work should start on them now, despite the fighting. Progress will help lock in Western support, which may ebb—especially if Donald Trump is elected in 2024. It will also signal to Mr Putin and his cronies that their war is futile.

The effort starts with money for rebuilding on a vast scale. Ukraine’s economy has stabilised at about two-thirds of its former size. Ultimately, its future rests on private investment, but government money will be needed first. The London conference set out to galvanise support from development banks and Western backers as well as tempt businesses to consider a reformed Ukraine as a place to invest.

Many countries have a vital interest in Ukraine succeeding and Russian aggression being seen to have failed, but these are straitened times. Governments will not raise enough money, especially if they protect their aid budgets, as they should. Instead they should find a legal process that allows them to treat the $330bn or so of Russian state money they have frozen as a fund for paying out compensation to Ukraine.

Next comes good government. The war has shunted aside many of the oligarchs who held Ukraine back. Their place has been taken by a cohort of entrepreneurs and activists, many of them with a background in technology. The government of Volodymyr Zelensky has moved against some corruption, including detaining the head of the Supreme Court on allegations of bribery.

However, Western officials warn that, for all his strengths, Mr Zelensky is bored by the detail that dogged reform entails. When Ukraine finally holds elections it risks lapsing back into the old, corrupt politics. That is why accession to the European Union is so important. It creates an incentive for reform and the application of the law. It also submits the government to scrutiny and creates allies for those who dream of transforming their country.

Finally comes security. Eventually, Ukraine needs to join NATO. That would offer permanent security at the lowest cost, because NATO’s Article 5 guarantee would signal to Mr Putin and his successors that an attack on Ukraine was an attack on the entire alliance—a battle Russia could not win. By binding what will be Europe’s biggest and best-equipped army into NATO’s structures, it would also help stabilise Ukraine and its borders.

However, Ukraine gains little from joining while battle rages—because that would require suspending Article 5 and any doubt about when it applies would weaken NATO. Instead Ukraine needs bilateral security guarantees and an accelerated path to NATO membership. These guarantees need to be written into law, as they are between America and Israel. They should involve money, weapons, intelligence and investment in Ukraine’s arms industry. Western troops may eventually be based in the country. The aim is to make Ukraine indigestible, rendering a future Russian invasion less feasible.

This is a fearsome agenda. If Ukraine struggles on the battlefront, a greater burden will fall on the home front and the higher will be the obstacles to success. All the more reason for Ukraine and its allies to press ahead.

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© 2023, The Economist Newspaper Limited. All rights reserved. From The Economist, published under licence. The original content can be found on www.economist.com

Updated: 23 Aug 2023, 03:08 PM IST