- May 27, 2022
- Posted by: admin
- Category: News
As of May 25, the total amount of direct damage to Ukraine’s economy from damage and destruction of residential and non-residential buildings and infrastructure reached $105.5 billion, or over UAH 3.1 trillion. Over the past week, the direct losses of Ukraine’s economy due to the destruction and damage to civilian and military infrastructure increased by over $8 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, the Ministry of Infrastructure and the Ministry for Communities and Territories Development. 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, Ukrainian Council of Shopping Centers, CoST Ukraine, Vkursi Agro, TVIS Ukraine and Retail Association of Ukraine.
The increase in the total amount of damage in the current week is due to the increase in damage caused to the housing stock, enterprises, and retail.
According to new estimates, the amount of damage due to the destruction of the real estate increased by another $5.5 bln. As of May 25, the total amount of damage to the housing stock amounted to $39.3 bln.
Cities such as Mariupol, Kharkiv, Chernihiv, Severodonetsk and Lysychansk were affected the most from the destruction of the housing stock. In total, more than 44 million square meters of Ukrainian housing were damaged, destroyed, or seized due to the war. The figure is related to the further destruction and addition of new cities to the list of settlements for which the calculation of damage is carried out.
The total amount of direct documented damage to Ukrainian enterprises has already reached $11.3 bln. Over the past week, this figure has increased by $591 mln. Since the beginning of Russia’s war against Ukraine, at least 227 enterprises, plants, and factories have been damaged or destroyed, or seized.
For the first time, damage to Ukrainian retail has been added to the current calculations. As a result of the war, at least 2,910 outlets were damaged and the total damage is $1.4 bln. These calculations were made by the KSE Institute, based on a study conducted by the Ukrainian Council of Shopping Centers and the Association of Retailers of Ukraine.
According to the latest estimates within the “Russia will pay” project, the losses from damage, destruction or loss of cars is almost $1.6 bln. In total, such cars are almost 105 thousand. Donetsk, Kharkiv, Luhansk, Chernihiv, and Kyiv are among the regions with the largest number of damaged cars.
Map of damage and destruction of cars breakdown by region, number
This week, the damage caused to educational institutions increased by $103 mln and now amounts to $1.5. bln. The number of losses caused by health care facilities increased by another $45 mln. In the breakdown by type of healthcare facilities, hospitals, polyclinics, and disease control and prevention centers were destroyed or damaged the most as a result of the war, followed by the number of outpatient clinics. A total of 643 medical facilities have been destroyed or damaged. Direct damage to healthcare facilities amounts to more than $1.1 bln.
Map of damage and destruction of cars breakdown by region, number
Since the beginning of Russia’s war against Ukraine, at least 23.8 thousand kilometers of roads, 6.3 thousands of railways and 41 railway bridges, 643 health care facilities, 1,123 educational institutions, 621 kindergartens, 192 cultural and 115 religious buildings, 178 warehouses, 99 administrative buildings, 28 oil depots, 19 shopping centers have been damaged, destroyed or seized.
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 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, and 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.
