Disagreements, Western governments strive to rebuild Ukraine, businesses 'try hard' to finance Russia?

Despite the huge business interests in Ukraine's reconstruction, a large number of Western businesses are still indirectly undermining the efforts of governments and Kiev, by 'hard-working' to contribute to the Russian economy .

Bất đồng quan điểm, chính phủ phương Tây nỗ lực tái thiết Ukraine, doanh nghiệp ‘cật lực’ tài trợ Nga?. (Nguồn: cc-rebuildukraine.com)

Disagreements, Western governments strive to rebuild Ukraine, businesses 'hard-pressed' to finance Russia? (Source: cc-rebuildukraine.com)

At the Ukraine Reconstruction Conference in London (June 21-22), countries and international organizations pledged about $60 billion in aid to support the recovery of this Eastern European country.

Ukrainian Prime Minister Denys Shmyhal proudly wrote this on Facebook .

“Last week was marked by the Ukraine Reconstruction Conference in London, where Ukraine received practical results that strengthen our resilience and accelerate the reconstruction process. Financial resources worth about $60 billion were attracted to Ukraine to support the recovery process.”

Mr. Shmyhal noted that at the Conference, the EU announced 50 billion EUR in funding for the next 4 years. According to him, this money will be used to cover the state budget deficit and finance reconstruction projects.

In addition, the UK will allocate £3 billion to Ukraine over the next three years, including £240 million this year. Ukraine and the UK will establish the Ukraine Innovation Fund to challenge green energy.

Ukrainian Prime Minister Shmyhal also added that the World Bank (WB) and Ukraine have reached an agreement on a $1.76 billion aid package to finance social payments. In addition, financial support programs from individual countries were also announced: The US announced an additional $1.3 billion in support for transport infrastructure, digitalization and energy; Germany – an additional EUR 381 million, specifically for humanitarian mine clearance; Switzerland – CHF 1.5 billion in the medium-term support program.

However, in reality, there seem to be two conflicting financial streams, between Western governments on one side and their numerous businesses on the other. While the US and European governments tried to show their support for the Kiev government with huge funding figures at the recent Ukraine Reconstruction Conference, the "sales" from Western businesses were regularly transferred to "feed" the Kremlin's coffers, although it was unclear, it was certainly not small.

A commentary on the Atlanticcouncil.org website also said that if this “silent support” cannot be stopped, it will be difficult to see Ukraine recover soon. Obviously, no reconstruction of Kiev can be successful unless Russia is completely deprived of the resources to continue its special military campaign in Ukraine.

The article concludes that the US, the West and Kiev cannot have a meaningful discussion about restoring or rebuilding Ukraine unless their international companies completely stop doing business in Russia and cut all contributions to the Kremlin's coffers.

When the Russia-Ukraine conflict began in February 2022, a number of Western companies were quick to announce and soon exit the Russian market. These noisy “exits” often attract media attention, but in reality, the majority of Western companies chose to stay in Russia.

According to data from the Kiev School of Economics (KSE), of the 1,361 Western companies that had subsidiaries in Russia before the Russia-Ukraine conflict broke out, only 241 (about 17%) left Russia entirely. The Western companies that remained generated $136 billion in revenue in 2022, thereby “contributing” to helping the Kremlin finance its military campaign in Ukraine.

According to the management of Western multinational companies, their continued presence in Russia, persisting with “business as usual”, is mainly aimed at providing essential goods to the population.

“They can’t abandon their customers” is a common argument among businesses, but neither Kiev nor Western governments accept it. Efforts to cut off the last lifeline to the Russian economy continue. The latest, the 11th package of sanctions from Europe, is not only aimed at Russia, but also at “regulating” the behavior of third parties with ties to Moscow.

The US and Western efforts to support Ukraine are evident in the funding pledges made at the Reconstruction Conference of Ukraine. Priorities include workforce training, infrastructure upgrades, and a particular focus on developing the energy sector towards a green energy future. But the conference also prioritizes engaging the private sector, by providing investment guarantee mechanisms, to leverage this vital resource in the reconstruction effort.

However, according to observers, actions and declarations of giving up revenue for businesses are difficult to go hand in hand, because it is an extremely difficult problem.

Western officials, meanwhile, say that corporate “loyalty” is measured by whether a company is willing to accept a loss of revenue to help the government counter Russian assertiveness. Western companies are required to “take a significant responsibility” where they operate, especially in conflict zones; they cannot sit on either side of the fence. They must either be part of the effort to rebuild and restore Ukraine, or continue to support the Kremlin through their own revenue streams.

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