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Economy

Rebuilding Ukraine: Lessons From Nations That Rose From The Ashes Of War

After two months of war, experts in Ukraine are starting to consider what plan could work to restore the local infrastructure and economy, looking at the experience of Germany, Japan and Italy — countries that went down in history for their economic miracles after being destroyed by war.

Photo of a woman walking past destroyed buildings in Borodyanka near Kyiv

Destroyed buildings in Borodyanka, near Kyiv

Yaroslav Zheleznyak

-Analysis-

KYIV — World history has many examples of post-war reconstruction. Since the end of World War II, there have been more than 30 major wars and more than 250 military conflicts in the world, involving at least 60 countries.

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But even with such a seemingly large sample, successful examples of recovery can be counted on the fingers of one hand. Each is unique and depends on many factors — from the banal availability of natural resources to the coincidence of circumstances in the region.

The case of Ukraine is unique. Our level of economic development, the presence of established state institutions and legitimate authorities, well-established production processes, and the stability of the financial system make the prospects for Ukraine's recovery significantly different from those of Afghanistan, Iraq, and Angola. Our country is closer to the examples of Europe, as well as some Asian countries after 1945.


To develop a plan for Ukraine, it makes perfect sense to analyze the Marshall Plan and the recovery scenarios of West Germany, Italy, and Japan: Each faced enormous destruction and each of them was able not just to recover but to make an economic breakthrough.

The Marshall Plan to rebuild Europe

Post-war condition: Infrastructure and industry were damaged, economic ties between countries were broken. Agricultural production was down to 83% compared to the pre-war level, industrial production was 88%, and exports were only 59%.

The Marshall Plan

The plan began in 1948 to address economic and social challenges in Europe, including five million destroyed houses and famine. One of the instruments was financial assistance from the United States, which amounted to more than $17 billion over four years (the equivalent of today's $210 billion) — 80% was free financial aid and 20% were cheap loans.

The Marshall Plan was primarily aimed at restoring industry, with the money allocated for the targeted purchase of industrial and agricultural products.

How it worked: The U.S. government supplied the recipient countries with goods and services. The governments of these countries sold the goods to businesses and individuals who paid the dollar value of the goods in local currency. This money was then invested in reconstruction, as was done in France and Germany, or covered the government's war debts, as in the UK. Most of the money was spent on U.S. goods.

Although the recovery plan was provided for 16 European countries, the main recipients were the UK, France, Italy, West Germany and the Netherlands.

The Marshall Plan also had political goals. Firstly, it obliged countries to have no presence of communists in the government. Italy, for example, was able to get help after the Communist Party lost the elections. Secondly, it was aimed at integrating the economies of European countries. Actually, the cooperation between the production of coal in Germany's Ruhr province and iron ore in France's Lorraine gave way to the European Coal and Steel Community, which was a precursor of the European Union.

Result: In general, the plan worked. It prompted 30% growth in the economy of the recipient countries compared to the pre-war period. The recovery of West Germany (although it only received 9% of the total fund) and Italy were the most successful.

West Germany's economic miracle

Photo of \u200bGerman refugees in Berlin in 1945

German refugees in Berlin in 1945

Bundesarchiv

Post-war condition: Defeated Germany was completely destroyed. Production was seven times lower than pre-war levels; 25% of houses, 20% of industrial facilities and 40% of transport infrastructure were left in ruins. Every fifth child lay in his own bed, while every third German lay in his own coffin. Every second German was unemployed. The financial system collapsed due to huge inflation and public debt.

German economic miracle

The country's prosperity began on June 20, 1948, when Ludwig Erhard, the father of the miracle, abolished state control over commodity prices and lifted 90% of regulatory restrictions on business.

The German example involved the following factors of success:

• abolition of state monopolies and launch of privatization mechanisms;
• replacement of the depreciated Reichsmark with the Deutsche Mark;
• reorientation of military industries towards food and textile, the production of household appliances and automobiles;
• 81% increase in foreign investment, mostly from the U.S., from 1950 to 1957;
• issuing government bonds, the profits from which were used to support business;
• the tax reform: replacement of a high differentiated corporate tax rate (about 65%) with a flat rate of 50% created tax incentives for low-income citizens;
• the German “big construction”, a residential and commercial real estate development program to address the devastation and 12 million refugees from the East.

It is noteworthy that enterprises received funds to pay only the first salaries. They then had to rely on their own revenues.

Result: In 1962, the level of industrial production in West Germany exceeded the pre-war figures by three times. Germany ranked second in terms of gold and foreign exchange reserves, third after the U.S. and England in terms of industrial production. Average annual economic growth rates in 1950–1966 were about 9.2%.

Italy's boom

Black-and-white photo of Italian workers next to a truck carrying

"Italy had fully recovered from the war by the early 1950s"

CVCE

Post-war condition: Italy was among the most affected and devastated European countries. GDP was only at the level of poor countries, and the military-oriented industry was in decline.

The Italian economic miracle was notable for such features:

• restored monopoly: monopoly companies (Fiat, Edison, Montecatini etc.) had priority in receiving loans and financial aid under the Marshall plan, which led to the capture of foreign markets by Italian monopolies and an increase in industrial production;
• the agrarian reform of 1950-1955: the redemption of land allotments with an area of more than 100 hectares by the state and their further sale to citizens in installments;
• Italian supply of materials for the production of U.S. military equipment during the Korean War (1950–1953).

Result: Italy had fully recovered from the war by the early 1950s, and industrial production tripled between 1953 and 1962. However, in the late 1960s, the monopolization of the economy led to corruption and inequalities in the development of individual regions of Italy.

Japan's economic expansion

Archive photo of the opening of the Tokaido Shinkansen high-speed passenger express in 1964

Archive photo of the opening of the Tokaido Shinkansen high-speed passenger express in 1964

Ochimusyadrive

Post-war condition: Japan not only lost the war — it was destroyed. The level of industrial production was 20% compared to 1939, with 70% of all industrial facilities in ruins. The country lost all the occupied territories indispensable for the supply of raw materials, fuel and food depended.

Restoring greatness

It is impossible to completely repeat the experience of Japan because of the specificities of the Japanese culture and way of life. There was a mix of liberal, planned and original economy.

Japan's economic miracle can be roughly divided into two stages: demilitarization and liberalization under the United States before 1951, and the Japanese model after the Americans left.

The United States allocated more than $3 billion to create a strong successful partner in Asia — most European countries received much less. The U.S. influence also consisted in the following:

• antimonopoly control established in 1945;
• the tax reform of 1949 implied a reduction in corporate taxes, but an increase in taxes for the population;
• the agrarian reform involved the confiscation of agricultural land from pre-war landowners and their sale to farmers at very favorable prices;
• the budget reform of 1950 prompted the Japanese to build industry from scratch, as it was unprofitable to restore it;
• limiting the import of foreign cars to Japan as a protectionist move;
• industrial development during the Korean War (1950-1953) driven by large orders from the United States.

Since 1952, the Japanese began to freely rule the country again and brought the Japanese culture into management processes. The key features involved:

• new priority industries backed by the state (electronics and automotive);
• country-wide adherence to state planning and minimal abuses of power;
• efficiency and self-sacrifice of the Japanese for the prosperity of the corporation;
• focus on high-tech production.

Realizing their limited natural resources, the Japanese invested in "brains" and bought up patents around the world, quickly capturing the global consumer electronics market. Between 1950 and 1960 alone, Japanese companies acquired more than 30,000 patents worth about $1 billion. As a result, they produced technological products, focusing only on goods that could be exported to large markets.

Result: In 1956, GDP per capita exceeded the pre-war level. Twelve years later, in 1969, Japan took second place in the world in terms of GDP and industrial production.

Common denominators of success (and failure)

There are of course many other examples in history, both recent and ancient, where countries are reborn after conflict. Sadly, of course, there have also been wars that break the fate of a people and entire nations.

The recipe for renewal of each country is different, but the common tools for success are: economic liberalization, job creation the export-oriented economy and external financial resources.

But even having those, it is important to use them effectively. It determines whether a country succeeds or joins a long list of failures like Afghanistan or Iraq.

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FOCUS: Russia-Ukraine War

Confronting The Dangers Of A War Reporter

Of the some 9,000 journalists believed to have arrived in Ukraine to report on the war, many were under-prepared. A course in France is now training them on how to face the harsh realities of conflict and teaching them essential survival techniques.

The objective of the training is not for journalists to learn how to face dangers but mainly how to avoid them.

Marina Alcaraz

BEAUVAIS — The ground is soaked with blood. A young man screams, struggling to make himself heard amid the gunfire. The bullet-proof vest with the word "PRESS" emblazoned on it seems insignificant in this moment of horror. Under Russian fire, his colleague has to extract him before he bleeds to death. He only has a few seconds to decide how to transport the injured man, who is weighed down by his equipment. Just a few more seconds to evaluate the severity of the wounds. Two serious injuries, a wounded eye… There are only a few minutes to save his life by applying a tourniquet and taking his pulse before calling emergency services, which will in any case only arrive two hours later.

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The crackling of the bullets, the adrenaline, the fear and the silence that follows… the whole scene is utter chaos. Except this is not Ukraine, where the war is still raging. It's a shooting range about 75 kilometers north of Paris.

Emergency training

This simulation is the result of a course organized for journalists and technicians who work in danger zones. In May, a dozen employees of the French public broadcaster — some with experience, others without — spent a week in immersive training. This meant a few days of preparation before leaving for or returning to Ukraine.

In order to cover the war, which takes place just a few hours' flight from Paris, media organizations sent a huge amount of reporters — some 9,000 accredited journalists, according to Reporters Without Borders (RSF). Young freelancers also went of their own accord, sometimes without even the most basic survival knowledge.

"Ukraine has created a sort of training emergency," says Jean-Christophe Gérard, security director of media company France Médias Monde. "The 'press' vest or badge no longer offers the protection it used to.”

Yan Kadouch, an editor and participant in the course, says: "I have been on several fronts, but often behind the army. In Ukraine, I really felt unsafe. With the artillery fire, it's a lottery."

In danger zones, every decision can lead to death

In Ukraine, eight journalists have lost their lives since the start of the war and 16 have been wounded, according to numbers by RSF. The death of French journalist Frédéric Leclerc-Imhoff a few weeks ago has left its mark. "He had not even taken any irresponsible risks. This tragedy reminded us how dangerous this war is," says Omar Ouahmane, a senior reporter at Radio France, who has been doing this job for years.

Patrick Chauvel, a veteran photo journalist, agrees. "Unfortunately, you don’t have to go to the front to be killed. In Ukraine, the military uses very heavy weapons, which are rarely seen elsewhere." This training was actually born out of a tragedy: the kidnapping and murder of two French journalists working in 2013 in Mali. Since 2015, this course has welcomed a total of 460 journalists and technicians from audiovisual and print media.

What war preparation involves

Participants are trained by former members of the military. The objective is not to learn how to face dangers but mainly how to avoid them. A bullet-proof vest or even a chemical suit is not enough in Ukraine. It is important to “always be vigilant,” says Michael Illouz, a security expert. “Knowing how to react in certain situation is already a good start.”

For example, in the heat of the first aid exercise, none of the trainees remembered how many shots were fired, and none thought to put on gloves before touching their colleague's wounds. A lot of the advice given is common sense: do not carry your backpack behind you in a minefield to prevent something falling out, do not step too far away from your car to relieve yourself, do not stand next to the armed forces.

To confront them with other possible situations, the journalists are placed in a messy room: an overturned table, chairs on the floor and a pack of cigarettes with a file still intact, in broad daylight. “Everything that seems incoherent should alarm you: there could be explosives,” warns Stéphane Ulhen, a former army mine expert, now a security consultant.

“In danger zones, every decision can lead to death,” he emphasizes. In 2017, three journalists working for a French television program were killed during a mine explosion in Mosul, Iraq. A big part of the training is also focused on gestures that can save a life, following the acronym MARCHE (M = Massive bleeding, A = Airway, R = Respiration, C = Circulation, H = Head & Hypothermia, E = Everything else).

“Bleeding out is the number one cause of preventable death," says Fabrice Simon-Chautemps, a former army paramedic and now a trainer. And the training is quite rigorous: the participants are, for example, capable of treating an evisceration or a thoracic wound affecting the lungs as a first aid measure.

Journalists as targets

Shortly before the terrorist attacks hit Paris on Nov. 13, 2015, a production manager had taken the course. That evening, because she lived in the neighborhood, she went to get her first aid kit and was able to save lives by applying tourniquets.

“It is essential to have first aid skills. Journalists have died because people around them did not know what to do. For example, thanks to this knowledge, I was able to compress a wound on my stomach I had gotten in Panama, with a piece of my shirt and my belt, while waiting for the paramedics that only arrived a few hours later,” says Chauvel.

Even without traveling across the world, the trainees learn how to stay safe in a large crowd. Many journalists were targeted during anti-vaccination protests in France. “A journalist has become a target in certain cases,” says Jean-Christophe Gérard. “Some media outlets assign security guards to them, but I don't think that's the solution: the job is all about going out into the field, being in contact with people, whereas the bodyguard is more likely to try to get in the way. In any case, he wouldn’t be able to do much against an angry crowd.”

But the training is also intended to make people aware of their limits. One of the participants admits never having worn a bullet-proof vest and says they are “extremely heavy” (20-26 lb). Another one is afraid of not having the physical strength to carry someone on their shoulder in case of a real injury.

“I realize that I have been lucky in the past,” says journalist Marie-Pierre Vérot, who decided to take the course. “I have already found myself in complicated situations, for example in the middle of gunfire in a house in Indonesia. My first reflex was to hide under a table, which does not really protect from bullets. I will now take further precautions and think more about possible outcomes.”

A journalist taking pictures in the village of Komyshuvakha, southern Ukraine, after it was bombarded by Russian forces

Dmytro Smoliyenko/Ukrinform/ZUMA

The fixer's role 

Many of the journalists think that the course (marketed at $4,300) should also be followed by their managers, who do not necessarily realize the potential threats, whether those are physical or digital. "Journalists often leave with their personal phones and computers full of documents. If they are captured, there is a risk of finding their sources, for example," says Guillaume Barcelo, an expert in information systems security.

In conflict zones, teams of two or three people are usually tracked by their editors, who help them manage logistics. The journalists must then follow precise protocols with prohibitions and missions. But, in the end, they are the ones who are best able to perceive the danger on the ground, along with the fixer. The fixer is a key component in war reporting. They translate, give guidance on the ground, and bring their network of contacts. In some cases, they even drive and find witnesses. In fact, they take the same risks as their Western colleagues and even risk more reprisals. A fixer in Ukraine generally costs between 250 and 350 dollars a day, but the rate can go up depending on the danger.

Some have become addicted to the field

Some of them are journalists in their own countries, while others come from civil society organizations, “but they all have a sense of resourcefulness,” says Charles Villa, a reporter who has just made a documentary on the profession. In Ukraine, Villa was "surprised to see many fixers taking up arms... Now, with the influx of foreign journalists, some of them who had never done this before are participating.” Especially women. Given the difficulty of finding the right people, some American television stations used specialized protection companies like Chiron, with bodyguards who accompanied the journalists.

If the profession of war reporter is accompanied by a hint of heroism, these journalists are not at all reckless. "Fear is our life insurance," says Omar Ouahmane, who has covered several conflicts.

“We are not looking for adrenaline," says Charles Villa, who attended a training course organized by the army in the south of France a few years ago. "War reporters are mostly reasonable and rational. They seek to emerge in terms of their career, while living extraordinary situations. Some have become addicted to the field," adds Denis Ruellan, a researcher in information and communication sciences and an author of books on war reporters.

A cellar in Chechnya

War reporters know about anxiety. Journalists or technicians in dangerous areas have all come close to serious trouble or even death. Charles Villa has risked his own life on several occasions, in Yemen, or in the Congo when he came face to face with a local warlord. Each one of them recounts with humility the moment when everything changed. Omar Ouahmane remembers a report in Sirte (a city in Libya) where the experienced Dutch photographer, Jeroen Oerlemans, was shot in front of him while crossing a street. "What saved me was that I took some time to observe before I went to follow him."

Patrick Chauvel spent a few hours in a cellar in Chechnya, sure that he was going to stay there and managed to get out by running at the right moment. Not everyone was so lucky.

So what drives war reporters to do their jobs? “I love adventure, the physical side, meeting extraordinary people, living history," answers Patrick Chauvel.

”It is in conflict zones that humanity stands out the most," adds Omar Ouahmane.That’s where we belong as journalists."

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