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Economics

Les conséquences économiques d'une paix en Ukraine

Jun 10, 2022 Barry Eichengreen

BERKELEY (CALIF.) – La guerre de la Russie contre l’Ukraine ne montre aucun signe d’une fin prochaine, mais il n’est pas trop tôt pour commencer à penser à ce qui pourrait garantir la stabilité, la prospérité et la sécurité de l’Ukraine d’après-guerre. Deux débats ont déjà lieu : l’un concerne le financement de la reconstruction économique, l’autre les conditions de la sécurité extérieure de l’Ukraine. Le problème est que ces débats se déroulent séparément, alors même que les deux questions sont intimement liées.

Les coûts de la reconstruction sont aléatoires car le cours de la guerre l’est aussi. Le PIB de l’Ukraine avant-guerre était d’environ 150 milliards de dollars. Étant donné un rapport capital-production de trois, et en estimant qu’un tiers des équipements sera détruit, nous en revenons au chiffre de 150 milliards de dollars. Comme toujours, des hypothèses différentes produisent des scénarios différents, mais la somme de 150 milliards de dollars semble un point de départ raisonnable.

Il ne serait pas impossible à des pays donateurs de fournir le montant d’une telle aide. Ce montant ne représente qu’un sixième du plan de relance NextGenerationEU sur lequel les États membres de l’Union européenne se sont accordés en juillet 2020. Et il équivaut à un douzième de l’American Rescue plan Act que le président des États-Unis, Joe Biden, a promulgué en mars 2021.

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Frank Tuijn Jun 15, 2022

Interesting. Does this mean that US should set an example and pay adequate compensation to countries it invaded, for example Afghanistan, Iraq and Syria?

In 2014 US organized a coup in Kiev supported by tens of thousands of people in a city of three million and a country of tens of millions that replaced a far from perfect democracy by a wholly fake one. The new regime was opposed to use of the Russian language that let to the loss of Crimea by democratic means. It also let to a rebellion in the Donbas that was armed by Russia with shoulder launched anti-aircraft missiles against low flying aircraft.
On July 17 the Ukrainian army shot down MH17 killing 298 people and it accused the rebels for using a Buk launcher they had taken from a Ukrainian army base. Thirteen month later the Joint Investigation Team said the launcher had been unable to launch any missile, a fact that must have been known to army HQ even before the rebels took it.
Joint Investigation Team was set up by the Dutch government two days after the crime and excluded both Russia and Ukraine because both had Buk launchers in the area. Three days later Ukraine was included because according to my Dutch newspaper at the time then evidence collected by Ukraine didn't need to be checked by the original members, the Netherlands, Belgium, Malaysia and Australia. But if either the rebels or Russia was guilty this checking wouldn't cause any problem. Was then vice-president Biden responsible for pressuring the Dutch government to this move?
As a Dutchman I'm deeply concerned about the corruption of the Dutch justice system by this case.
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Henry Rech Jun 11, 2022

Barry Eichengreen's essay is a little strange.

Firstly, the Ukraine war has not ended. It is not clear how it will end. And there is no vanquished, decimated Russia (as it was with Bismark's Germany after WWI).

Even if Russia was pushed out of the Ukraine why would it entertain reparations?

The only bargaining chip the US/Europe has is the sanctions. The pressure could be increased on Russia by additional sanctions, if there is opportunity for more. It might be possible to trade sanctions relief for Russia taking at least some responsibility for restoring Ukraine's infrastructure and economic viability.

And what is the point of using Russia's sequestered foreign exchange reserves? They're are just numbers in a bank account somewhere. The Fed Reserve/ECB may as well just create a pile of dollars and euros and send them to the Ukraine or credit a Ukrainian bank account somewhere.

The sequestered Russian reserves are of more use to the Russians, presuming they be permitted to spend them in the West and presuming they would want to spend them in the West (and they probably would). Perhaps another bargaining chip.

And what kind of message to Xi Jinping would letting Russia off the hook send?

Eichengreen reminds us of Keynes' "Economic Consequences of the Peace" and Keynes' attempt to mollify the victors in WWI. However, Eichengreen seems to have forgotten Keynes was writing about a Germany that had been thoroughly defeated and a war that had decisively come to a conclusion.

Keynes wrote in the last pages of his book:

"The assertion of truth, the unveiling of illusion, the dissipation of hate, the enlargement and instruction of men's hearts and minds, must be the means."

Fine sentiments, but worthy of invocation only if they are shared by the aggressor.
- Joe Ryan Jun 15, 2022
  
  Not only does freezing Russia's foreign-exchange reserves make only a marginal contribution to allowing the rest of the world to divert real resources to Ukraine, as Mr. Rech points out, but in addition it barely makes a difference to Russia's own access to real resources.
  
  Why? Because Russia needs the reserves (or feels it needs them) to defend its exchange rate.
  
  Adopting a global reserve currency — say, the euro — would allow Russia to reallocate real world resources to itself by spending down excess reserves, but only briefly. The sustained real benefit would be the elimination of currency risk. (That benefit would be mutual but larger for the people who are subject to Russian jurisdiction.)
  
  The war doesn't affect any of this one way or the other.
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Margaret Bowker Jun 10, 2022

Very interesting commentary by Barry Eichengreen. It's thought-provoking and offers sound arguments. This is not the West and Afghanistan; this is a world power. So the Professor made some very good points and apart from the conflict itself, the most important thing for Ukraine's future, is workable and lasting security guarantees. It's at the base of everything. He appreciates that it will not be easy when the instinct of the majority would probably be against it, but advises careful consideration.

Although not mentioned, but connected, the issue of the UK detainees and other POWs is very important. The issue of deposits is on a national scale and could feature quite strongly in the peace talks. However, if the POW issue got very contentious, then the peace talks could become more difficult. A good and timely essay.
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Les conséquences économiques d'une paix en Ukraine

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