Ukrainian President Volodymyr Zelensky said he may be willing to compromise on the contested Donbas region, but the economic cost could be high.
Donbas is located in southeastern Ukraine and comprises the Donetsk and Luhansk regions. Moscow-backed separatists have controlled much of Donbas for years, but Putin officiallyof the separatists only days before he launched military attacks on Ukraine at the end of February.
Zelensky indicated Ukraine would be willing to compromise during a 90-minute Zoom interview with independent Russian journalists. However, Ukraine's head of military intelligence, Kyrylo Budanov, said he believes Putin instead wants to splitThe cost of reconstruction for Donbas alone would be in the tens of billions, according to some estimates. In 2020, the Vienna Institute for International Economic Studies placed a pre-invasion price tag of $21.
If Russia takes control of Ukraine's Donbas region, reconstruction efforts there could cost President Vladimir Putin more than $20 billion. Above, a Ukrainian soldier walks past a self-made memorial to late soldier-mates in Svetlodarsk, outside Donetsk, in Donbas on March 12.When WIIW calculated the costs of rebuilding Donbas two years ago, it noted that 44 percent of the $21.
"The direct damage caused by violent actions is not the most significant cost driver in the long run. Forty-two percent of the restoration costs can be attributed to the disruption of business continuity and the degradation of state capacity that accumulated over years of inaction," the Austrian research institute wrote.
The conflicts in the region at the time were much smaller than what's occurred since Russia's February 24 invasion of Ukraine began. But even in 2020, WIIW said the reconstruction costs would be too large for Ukraine to cover alone. The figure was more than 40 percent of the annual revenues in Ukraine's state budget, or 16 percent of the country's gross domestic product, in 2018.
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