Oleg Ustenko, chief economic adviser to Ukrainian president Volodymyr Zelenskyy, announced on Thursday that the Russian invasion had destroyed at least $100 billion of Ukraine’s physical assets, including infrastructure, buildings, and other sources of value.
In his remarks to the Peterson Institute for International Economics, Ustenko noted that the war had led roughly half of Ukraine’s businesses to close down altogether, while the remaining half continued to operate at significantly reduced capacity due to the ongoing violence.
Ustenko acknowledged that the $100 billion estimate was “very approximate,” but cited the high number as evidence of the catastrophic damage that Russia’s invasion, which began on February 24, has caused the country. He highlighted Ukrainian agricultural exports and steel production as two industries that had been particularly affected by the outbreak of hostilities.
In spite of the dire economic consequences of the Russian invasion, Ustenko claimed that some parts of the Ukrainian economy had continued to function well. He underlined that Ukraine’s central bank and financial transfer system had done “OK under the current circumstances,” largely owing to Western financial support. The high-level adviser estimated that Kyiv’s cash reserves totaled $27.5 billion, down from approximately $30 billion in mid-February.
Ustenko also claimed that international credit cards and other payment systems, including Apple Pay and Samsung Pay, continue to function normally within Ukraine. He emphasized that the hryvnia, Ukraine’s currency, had remained stable against the dollar, and could be freely traded for foreign currencies in areas not occupied by Russian forces.
“Even in those cities surrounded … now by the Russian army … [residents] are able to use their cards,” Ustenko said, referencing the cities in Ukraine’s east surrounded by Russia’s military.
In this regard, Ukraine has outperformed Russia, where the ruble has lost roughly 45 percent of its value since the beginning of the conflict. Western sanctions on Russia have also led many payment processors, including all major Western credit card companies, to leave the country. While credit card transactions still work within Russia, Western companies have refused to process them, passing the responsibility instead to Russia’s “National Payment Card System,” or NSPK. Apple Pay and Samsung Pay, two widely-used electronic payment systems, have shut down entirely.
While the International Monetary Fund has pledged $1.4 billion in support for Kyiv, Ustenko warned that this number would not begin to cover the cost of rebuilding Ukraine’s shattered economy, and called for Western investment and Russian reparations to help finance the country’s postwar reconstruction.
Trevor Filseth is a current and foreign affairs writer for the National Interest.