Walter Eucken, architect of the postwar German Economic Miracle, Creative Commons License from the Walter Eucken Institute under Attribution Share Alike unported courtesy of Wikimedia.
The World Bank recently estimated the cost of rebuilding the devastation wrought by Putin in Ukraine at $349 billion and certain to grow. A multinational conference is to be held in late October to address the cost and who should bear it, reports the New York Times:
BRUSSELS — Even as Russia’s war on Ukraine grinds on with no end in sight, Ukraine’s allies are facing complicated questions about the country’s reconstruction.
Who will pay for what, and who should control the process and funds? What kind of external oversight of the money should be required and what changes must Ukraine make?
An international conference on reconstruction is scheduled for next month in Berlin to grapple with those thorny issues, and also determine whether reconstruction should begin before a peace settlement. There is also the vexed question of what kind of security guarantees should be offered to encourage private investment in the rebuilding.
To that end, the German government has asked a research institution it helps finance, the Washington-based German Marshall Fund, to come up with proposals for donor countries. Their report was provided to The New York Times and is already being discussed among donor countries as “a private note to stakeholders.”
Among the key recommendations are that the Group of 7 industrialized nations appoint a Ukraine coordinator to oversee reconstruction, ideally an American with global stature; that existing institutions be used for the project to ensure timeliness; and that different multilateral financial institutions should be used, to limit the influence of Russian or Chinese board members. The report also says that Ukraine must accept strict oversight of the funds, as well as strengthening its legal and judicial systems, to reduce the potential for corruption.
“The vision of a free and democratic, modernized and European Ukraine is the answer” to Russian aggression, the report says.
Amen. And let us take lessons from Germany after WWII and how the right policy mix, as well as generous aid from America, allowed it to promptly bounce back to become the economic champion of Europe and one of the preeminent economies in the world. Per Gregory Gethard, writing in the Investopendia:
Germany’s ascent to becoming a global economic power—known as the “German economic miracle” or Wirtschaftswunder—had its origins at the end of World War II when much of the country was in ruins. Allied Forces had attacked or bombed large parts of its infrastructure.2 The city of Dresden was completely destroyed. The population of Cologne had dropped from 750,000 to 32,000.
In short, Germany was a ruined state facing an incredibly bleak future. But by 1989, when the Berlin Wall fell and Germany was once again reunited, it was the envy of most of the world.
Germany had the third-biggest economy in the world, trailing only Japan and the United States in terms of gross domestic product (GDP).
It’s understandable why many would proclaim Germany’s rebirth to be an economic miracle. But how did Germany accomplish such a feat?
Stay tuned.
Glory to Ukraine!
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