Page 64 - bne Magazine August 2022

64 I Eastern Europe bne August 2022
West African LNG supplier Nigeria LNG is looking to boost gas production from the end of the year in order to help meet increased demand from the likes of France and Portugal.
The Middle East will be another important player in the bid to wean Europe off Russian commodities. US President Joe Biden recently returned from a visit to the region, ostensibly hoping to improve trading relations with Saudi Arabia as well as to promote the US’ geopolitical objectives.
In an article for the Washington Post, Biden wrote that he was going to the Middle East because the region’s “energy resources are vital for mitigating the impact on global supplies of Russia’s war in Ukraine.”
Biden added that Saudi officials are “working with my experts to help stabilise oil markets with other OPEC producers.”
Qatar, which currently supplies around 30% of its gas to the European Union, has so far been the only Gulf state to indicate that it is willing to increase
supplies to Europe to help cover the shortfall. But much more can be done. Israel alone could provide Europe with 10% of the gas currently coming from Russia. The Middle East’s steel market, meanwhile, can churn out about 16 times the annual volume formerly supplied to the EU by Russia.
Russian industry has shown that the decline in trade relations between Russia and Europe need not be a death knell. European companies must demonstrate the same versatility if the West is to successfully re-orientate its model of trade.
Ukraine Reconstruction Conference launches
new platform to rebuild the war-torn country
bne IntelliNews
Politicians and top private sector leaders met in Switzerland on July 4 to discuss ways to create a new platform that would amount
to a “Marshall Plan” for Ukraine’s reconstruction.
“One month ago, a young Ukrainian hero died on the battlefield, as he fought for the future of his country. His name was Roman Ratushnyi, and he would have turned 25 tomorrow. Roman belonged to a new generation of young Ukrainians. As a teenager, he was among the first protesters on the Maidan, demonstrating for Europe and for democracy. And ever since, Roman never stopped fighting for a better Ukraine,” European Commission President Ursula von der Leyen said in her remarks at the opening of the conference. “Roman's life was taken too early, but
his dream lives on. The dream of a new Ukraine, not only free, democratic and European, but also green and prosperous. A place that Ukraine's golden generation can finally feel their own. It is this dream that brings us here today.”
Ukraine’s Prime Minister Denys Shmyhal said the cost of reconstruction would run to $750bn and said Russia’s frozen Central Bank of Russia (CBR)
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reserves and the assets of the oligarchs should be used to fund the programme.
Von der Leyen has earlier suggested that the Russian central bank funds be used to fund reconstruction but has always been careful to add “if possible.”
The problem is that the CBR’s fund have only been frozen and not seized. Technically the money still belongs to the Russian state. Countries cannot simple appropriate the property of another country unless they are at war. And the West and Nato have gone out of their way to say that they are not at war with Russia for fear of reprisals and sparking WWIII.
Experts say that appropriating Russia’s money and assets is a legal minefield and would be difficult to justify in courts. Many of the oligarchs have also challenged sanctions imposed on them as being outside the law and politically motivated.
The amount of damage done to Ukraine by Russia remains a matter of debate. The Kyiv School of Economics (KSE) has estimated the cost of the war so far at $600bn, which includes lost revenue, investment and opportunity costs in addition to the cost
of the physical destruction of real estate, infrastructure and other fixed assets worth $104bn, according to KSE.
KSE estimate that at least 45mn square metres of housing, 256 enterprises, 656 medical institutions, and 1,177 educational institutions have been damaged, destroyed or seized.
Former Finance Minister Natalie Jaresko put the figure even higher at $1 trillion.
The amount of money needed for a Marshall Plan is also a matter of debate. The original Marshall Plan to rebuild German after WWII was worth $160bn in today’s dollars, liberal Russian economist and former head of the New Economic School Sergei Guriev told bne IntelliNews in an interview. He and his colleague estimate that Ukraine will need “between $250bn and $500bn” for a modern day Marshall Plan.
“The things that have been destroyed are simply more valuable today than after the war. Technology has come on and it will be more expensive to rebuild,” Guriev told bne IntelliNews on the sidelines of the EBRD annual meeting earlier this year.