Total economic losses since the beginning of the war are estimated at $564-600 billion or above
As of April 26, the total amount of direct documented infrastructure damages, based only on public sources, is almost $88 billion or almost UAH 2.6 trillion. During the last week, direct losses to civilian infrastructure documented based on publicly available evidence (that is, this is a lower bound estimate and the true losses are likely to be times higher), increased by $3.1 billion.
This can be seen from the analysis carried out within the “Russia will pay” project by the KSE Institute team (the analytical unit of Kyiv School of Economics) with the support of the Presidential Office, the Ministry of Economy, the Ministry of Reintegration of Temporarily Occupied Territories and the Ministry of Infrastructure.
The project team also includes volunteers from the Center for Economic Strategy, Dragon Capital, the Anti-Corruption Headquarters, Institute of Analysis and Advocacy, Transparency International Ukraine, Prozorro.Sale, Prozorro and Ukrainian Council of Shopping Centers.
As estimated by the Ministry of Economy and KSE, the overall Ukraine’s economic losses due to the war, taking into account both direct losses calculated in this project and indirect losses (GDP decline, investment cessation, outflow of labor, additional defense and social support costs, etc), range from $564 billion to $600 billion.
The largest increase in losses in the last week is due to new data on damage and destruction of railway infrastructure, health care facilities, assets of enterprises.
Also at this stage, the estimated losses due to damage to the agricultural land fund through rocket fire and hostilities were added to the assessment. This amount consists of four components: mine pollution, land reclamation, loss of winter crops and loss of reclamation areas.
Overall, during the 62 days of Russia’s war against Ukraine, 23 574 kilometers of roads, 32 million square meters of real estate were damaged, destroyed or seized. Compared to the last week, the number of damaged or destroyed objects has increased, and now at least 535 kindergartens, 866 educational institutions, 231 medical institutions, 173 factories and enterprises were damaged by the war. The list of damage and destruction due to the war includes at least 75 administrative buildings, 277 bridges and bridge crossings, 11 military airfields, 17 airports and 2 ports. Also, as of April 26, at least 95 religious and 130 other cultural buildings were damaged, destroyed or seized.
Donetsk, Luhansk and Kharkiv regions are among the regions where educational institutions were most damaged and destroyed. Since the war began, more than 30% of educational institutions in the Donetsk region were destroyed and damaged, in the Luhansk region – more than 23%, in the Kharkiv region – almost 19%. In the capital, more than 5%.
The largest losses in the total amount of direct documented infrastructure damages are the costs of housing and enterprise assets. Thus, 40% of the total number of damaged, destroyed or seized residential buildings and enterprises is in Donetsk region, 23% is concentrated in Kharkiv region, 12% – in Chernihiv region and 8% – in Kyiv region.
The project team is also working on the possibility of using satellite imagery to analyze the damage. This is reasonable for the analysis of damage to mass objects – housing, roads, agricultural assets. Modern images with a resolution of 30-50 cm per pixel allow you to qualitatively identify even private homes or traces of individual explosions. The project team is working to obtain images from recognized industry leaders – Maxar and Airbus, as well as working with a number of domestic and foreign companies to find the best technical solution for their binding to coordinates and processing. This will provide qualitative data to assess the extent and cost of damage for analysis, recovery, and future lawsuits against Russia.
The project focuses on assessing the damage caused to Ukraine’s physical infrastructure during the war (destruction of residential buildings, utilities, roads, railways, educational and medical facilities, etc.); and estimating the financial value of these damages. The project does not assess total economic losses, including not only direct infrastructure losses but also numerous “incidental” costs to the economy due to the war (closure of many businesses; loss of hundreds of thousands of homes and jobs; termination of any investments; reduction of consumer demand, etc.).
Every citizen or legal entity can also submit information about the loss of physical infrastructure, including residential buildings, due to the war. For this purpose, the KSE Institute team has created the RUSSIA WILL PAY resource (https://damaged.in.ua/), where every citizen can submit data on damage to buildings, businesses, roads, and other facilities right now. Everyone can also submit information about damages using the chatbot.
Methods for evaluating financial losses from damage to the project:
These calculations are based on the analysis of several thousands of public notifications from Ukrainian citizens, the government, local authorities about losses and damages throughout the country, as well as indirect assessment methods such as calculating the estimated area of the war-damaged property in the most affected cities.
The methodology also includes the World Bank’s experience in analyzing losses in Syria and Iraq, as well as the recommendations of the leading Ukrainian investment company Dragon Capital. We are going to continue this work in the future, which will allow us to detail the assessment of the object by regions and types of buildings, losses of utilities and infrastructure, etc.
Indirect methods of estimating the value of destroyed residential real estate have been used due to the lack of regular public updates on the total number of destroyed and damaged dwellings, in particular by region and the number of private / apartment buildings. Also, the assessment of the value of damaged and destroyed housing now also includes the assessment of the need for expenditures for the dismantling of destroyed buildings and repairs in the buildings to be built. The valuation of the assets of enterprises no longer takes into account depreciation and added work in progress and inventories. Receipt of updated and detailed data from the Ministry of Infrastructure on the current amount of damaged / destroyed infrastructure objects, as well as their replacement value.
These estimates are not exhaustive: information on numerous damages and destruction may be missing due to the inability of citizens, local and state authorities to promptly record the damage in each city and town. Also, due to the lack of information at this stage, the assessment includes only losses from destruction / destruction of buildings, not taking into account the cost of equipment (including hospitals, research institutions, damaged vehicles, etc.). These estimates will be gradually added in the next stages of updating the indicator.
Currently, the evaluation does not take into account information on damage to natural resources, animal husbandry, stocks of companies (in warehouses, shops, etc.), moveable property, military property, telecommunication operators’ property, etc. caused by combat and mining operations. This information will be supplemented and clarified after the end of hostilities in the relevant regions of Ukraine.
Infographics made by Remarker https://remarker.com.ua/