How to collect eco- and macroeconomic losses from russia mepr.gov.ua

How to collect eco- and macroeconomic losses from russia

Katerina Belousova

It is critically important to correctly assess the extent of damages and develop a methodology for their assessment

Ukraine will be able to receive compensation only if it properly collects and documents the evidence that confirms the losses and proves the cause-and-effect relationship between the aggression of the russian federation and these losses.

Sofia Kosarevych, an analyst at the Dniester Center, wrote about it in an Economic truth's column. 

She noted that due to military aggression in Ukraine fall in GDP according to the results of 2022, it may reach 35-40%. The country also faced theft and destruction of natural resources and agricultural products, in particular grain and wood .

"Reimbursing these types of losses will be quite a difficult process. First of all, this is related to the documentation and confirmation of the authenticity of the losses and their assessment," he writes Kosarevych.

The Special Procedure for determining damage, which was approved by the Cabinet of Ministers, is quite general and mostly contains indicators on the basis of which damage will be calculated, in particular, GDP losses due to human casualties.

However, as international practice shows, this may not be enough. For example, the International Court of Justice of the United Nations in February 2022 ordered Uganda to pay Democratic Republic of the Congo compensation in the amount of $325 million. This amount is significantly less than the stated demands, which were put forward not only with regard to macroeconomics and natural resources.

"This decision is the latest in international practice regarding compensation. The approaches that were used in it are likely to be used in cases about compensation to Ukraine, even if they are considered by another body," said Kosarevych.

She also emphasized that it is important to make claims for different types of damage when compensating for war damages within the framework of existing international mechanisms. And it is extremely important for the government and the affected business to take into account the details of this case when developing a strategy for compensation.

"It is critically important to correctly assess the extent of damages and develop a methodology for their assessment. For this, it is worth involving recognized experts who will be able to provide the necessary justification and explain how these figures were obtained," the analyst said.

After all, any international body or mechanism that will award compensation will be based on specific and confirmed data, which should be carefully prepared. Therefore, political statements with big numbers are not enough to make reparations a reality.

"The government should develop a clear and understandable evaluation methodology based on the available evidence, on the basis of which it will be possible to demonstrate the connection between the actions of the Russian Federation and losses of the economy: both macroeconomic and natural resource losses," Kosarevych stressed.

She also noted that without these efforts, it will be difficult to get compensation, since even obvious things need to be proven.

Earlier, EcoPolitic wrote, according to the calculations of the Kyiv School of Economics, that Ukraine's land survey cost with a high risk of mine contamination and demining of the affected areas is estimated at $436 million.

As EcoPolitic previously reported, Ukraine is one of the most mined countries of the world, because almost a third of the area is about 200,000 square km need demining.

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