Julia Soldatiuk-Westerveld follows all developments on reconstruction and reforms in Ukraine on behalf of Clingendael. In June, she attended the annual Ukraine Recovery Conference, this year held in Berlin. We speak to her about the key takeaways.

At first glance, the conference has an economic and legal character, but there was a lot of talk about air defense. Why?

Defence and the economy are closely intertwined. Efforts to make the country attractive for investment or motivate Ukrainians abroad to return are of limited use as long as there is insufficient air defence and the security situation remains precarious. The violence and unrest understandably make investors cautious. One positive sign is a World Bank initiative to set up a fund to provide investors with guarantees.

At the same time, in Ukraine itself, you need enough people, or ‘human capital.’

Yes, or more simply put: a large enough workforce. Because that is the part of the population that has to carry out the reconstruction. Ukraine is in a quandary: do we send a fit and young Ukrainian to the front or do we deploy that person for economic development? In practice, you see more and more people in the vital industries of the Ukrainian economy being sent to the front. That is why it is important that the new Skills Alliance (with 700 million euros over the next three years) was launched at the URC in Berlin. With this alliance, Ukrainians in Ukraine and in Europe receive skills training and receive opportunities to contribute to the recovery. The government of the Netherlands joined this alliance along with 49 partner states, international organisations and companies. 

Last year, you indicated that Ukraine's reconstruction requires the return of at least 1 million people. Is a return policy already taking shape?

A lot has been said about that, but little progress is visible one year later. What you need to motivate people to return is investment in social infrastructure, such as education. Labour laws will also need to be reformed, so that wages go up, among other things. But even such reforms are, of course, enormously difficult in times of war. At the same time, Ukraine wants to be vigilant against policies that unfairly favour people who have left over those who have stayed in the country.

In a year, the next edition of the Ukraine Recovery Conference will take place in Italy. What do you think the focus will be on then?

Because the talks about Ukraine's EU membership are about to begin, I expect that next year there will be even more focus on European integration, and consequently, on the quality of the rule of law and anti-corruption measures. Ukraine will need to develop several roadmaps detailing the implementation of the necessary reforms. The attention will be on the progress made in these areas, not in the last place in the context of the gradual integration of Ukraine into the EU single market. 

Are all those necessary reforms realistic and at what pace will they take place?

There is a political will in Ukraine and a strong momentum to advance and implement reforms that have been in progress for several years. Ukraine is moving fast - we see this on the speed of the implementation of the seven EU recommendations necessary to initiate negotiation talks, which were officially launched this week. This is also reflected in the self-screening of Ukrainian legislation for its alignment with European law, ahead of the formal accession talks. However, the implementation of these reforms weighs heavily on the state budget, which is currently extremely constrained due to most available resources being allocated to defense expenditure. In the coming years Ukraine will continue to balance between investing in its defense, recovering its economy, and implementing comprehensive reforms. Reflecting on the transformations Ukraine has achieved over the past two years, I believe that with ongoing political and economic support from its partner states, Ukraine has a real chance to succeed. 

At the same time, corruption cases continued to come to light. One of the most high-profile: The 2023 arrest of the country's top judge for allegedly receiving bribes. Does this indicate that there is still much work to be done?

It’s a symptom of a positive development: since the large-scale invasion, the Ukrainian state has been functioning more effectively than before. This improvement is also reflected in a significant reduction in reported corruption levels. Tolerance for corruption has decreased sharply in Ukraine. One of the ways the country is fighting it is by bringing corruption cases to light, serving as a form of ‘public shaming’. The ongoing decentralisation of the energy sector, driven by Russian attacks on Ukraine’s critical energy infrastructure, and the reform of large energy companies are breaking up monopolies and allowing for greater transparency. The judicial reform and the enforcement of de-oligarchisation law further support this trend. It has become easier to detect and combat corruption, which also leads to increased exposure of corruption cases.

Follow Julia on X to keep up to date with all developments on reform and reconstruction in Ukraine. She reflects on how Ukraine aims to stay resilient in the context of a long war in this piece in the Clingendael Spectator.