hausmann104_ Sergei ChuzavkovSOPA ImagesLightRocket via Getty Images_ukraine destruction Sergei Chuzavkov/SOPA Images/LightRocket via Getty Images

The Economic Case for Guaranteeing Ukraine’s Security

Without security guarantees, it is difficult to imagine Ukraine experiencing the kind of economic transformation previously seen elsewhere in Eastern Europe. With such guarantees in place, firms’ participation in value chains could make the country more prosperous, Europe more efficient, and the world better fed.

CAMBRIDGE – The conflict in Ukraine drags bloodily on, but it is not too soon to start planning for the country’s postwar recovery. This is important not just because planning takes time, but also because it informs what kind of peace will be required to give Ukraine a path to prosperity.

Some think that Russia will never accept a solution where Ukraine is anything other than a buffer state. But such an outcome would entail gigantic economic costs that would condemn Ukraine to a future of misery. After all, a buffer state is precisely what Ukraine was following the Soviet Union’s collapse in 1991, and the results were disastrous, triggering both the 2004 Orange Revolution and the Maidan Revolution a decade later.

The statistics are quite staggering. According to the World Bank, Ukraine’s income per capita declined by half between 1990 and 1998, the third-largest collapse (after those of Tajikistan and Moldova) among the former communist states of Eastern Europe and Central Asia. Moreover, Ukraine experienced the slowest recovery of all the states that formerly comprised the Soviet bloc.