Авторы публикации
As a result of the ongoing hostilities on the territory of Ukraine, the country has already suffered significant economic damage. According to the government of Ukraine, the total amount of material losses, confirmed by the World Bank, is more than 340 billion dollars. The amount of funds that has been verified and is needed for recovery is about $105 billion.
• The volume of direct damage to the economy of Ukraine from damage and destruction of residential and non-residential buildings and infrastructure is estimated at 114.5 billion dollars.
• According to forecasts, Ukraine's GDP may fall by 35-40% by the end of 2022. This is a loss of about 68-78 billion dollars, taking into account the fact that at the end of 2021 Ukraine's GDP amounted to 195 billion dollars.
• Ukraine has also lost control of the largest of its four operating power plants, the 6,000-megawatt Zaporozhye nuclear power plant at near the city Enerhodar.
• As a result of the occupation of territories, death of people and migration losses, Ukraine has lost about 6.7 million of its citizens. According to the UN, since February 24, 2022, about 12 million people have left Ukraine. At the same time, 5.3 million people returned to Ukraine.
In dynamics, all these numbers continue to increase as the war continues.
The Ukrainian Institute of Politics conducted its research on material losses in Ukraine due to the war. In particular, in the study “The Cost of War. The cost and consequences of the war in the east of Ukraine and the annexation of the Autonomous Republic of Crimea” we estimated the losses of the country after 2014. before the full-scale Russian invasion on February 24, 2022. Even then, according to our estimates, the damage caused to the country was in the range from 317 to 491 billion dollars. Also, after a full-scale Russian invasion, we released a study “The cost of war: 2 weeks of Russian invasion in numbers for the economies of Ukraine, the Russian Federation and the world”, where we also noted that the damage caused to the country as a result of hostilities is enormous in scale and the funds needed to restore the Ukrainian economy after the war can be in the hundreds of billions of dollars. Two studies can be found on the website of the Ukrainian Institute of Politics.
In its statement on the opening of proceedings dated February 26, 2022, Ukraine asks the International Court of Justice to order Russia to pay full reparations for the damage caused as a result of the military invasion. Under the damage caused by any actions, one can understand a wide range: both harm caused to citizens, and harm to infrastructure, the economy of the state, etc.
But in addition to material losses, Ukraine also suffered significant non-material losses. Taking into account the fact that there is no clear algorithm for calculating this type of losses in Ukraine, as we were informed by government departments, we tried to independently estimate the amount of intangible losses in the country.
Intangible assets are legally recognized non-current assets of an enterprise in the form of various rights that have a purpose, a real value and are capable of bringing profit or other benefits to their owner (user).
In general, the following groups of intangible assets are distinguished:
- the right to use natural resources (the right to use subsoil, other resources of the natural environment, geological and other information about the natural environment, etc.);
- rights to use property (the right to use a land plot in accordance with land legislation, the right to use a building, the right to rent premises, etc.);
- rights to commercial designations (rights to trademarks (signs for goods and services), commercial (company) names, etc.), except for those whose acquisition costs are recognized as royalties;
- rights to industrial property objects (the right to inventions, utility models, industrial designs, plant varieties, animal breeds, layout (topography) of integrated circuits, trade secrets, including know-how, protection against unfair competition, etc.) , except for those whose acquisition costs are recognized as royalties;
- copyright and related rights (the right to literary, artistic, musical works, computer programs, programs for electronic computers, data compilations (databases), performances, phonograms, videograms, programs (programs) of broadcasting organizations, etc. d.), except for those whose acquisition costs are recognized as royalties;
- other intangible assets, including the reputation of the company (goodwill), the rights to carry out activities, the use of economic privileges and others.
But, as we were told in government departments, methodological recommendations for calculating the non-material damage suffered by Ukraine as a result of the Russian invasion were not developed.
Therefore, we tried to independently assess the non-material losses that the country suffered as a result of the outbreak of hostilities.
In our opinion, as a result of the war, Ukraine suffered the following types of non-material losses (which can be estimated):
- rights to use natural resources. (the right to use subsoil, other resources of the natural environment, geological and other information about the natural environment, etc.);
- rights to use property. (the right to use a land plot in accordance with land legislation, the right to use a building, the right to rent premises, etc.);
- rights to commercial designations (rights to trademarks (signs for goods and services), commercial (company) names, etc.), except for those whose acquisition costs are recognized as royalties;
- other intangible assets, including the reputation of the company (goodwill), the rights to carry out activities, the use of economic privileges and others.
In general, in the territories of Ukraine controlled by Russia, there are more than 60% of coal deposits, 20% of gas deposits and more than 40% of metal deposits. According to American experts, this is equivalent to 12 trillion dollars.
At the same time, here material losses (the cost of the resources themselves) should not be confused with intangible losses (the cost of exploiting these resources). Relatively speaking, if material losses from the loss of minerals in the occupied territories amount to 12 trillion dollars, then the state could issue licenses for their extraction for a much smaller amount. At the same time, in this case, we consider the right to extract minerals, and not the material losses themselves from the loss of minerals.
Therefore, we calculated the approximate amount of payment for licenses issued by the state in the occupied territories.
According to the data of the State Customs Service regarding the total number of licenses by type of activity and the amount of fees for them registered in the temporarily occupied territories of Ukraine or located in the area of hostilities.
Dnepropetrovsk region.
Number of valid licenses - 18,174
Total fee - UAH 64,209,400.
Donetsk region.
Number of valid licenses - 5,078
Total fee - UAH 8 250 800
Zaporozhye region
Number of valid licenses - 7,754
Total fee - UAH 23,474,900.
Lugansk region.
Number of valid licenses - 2,346
Total fee - UAH 1,829,800.
Nikolaev region
Number of valid licenses - 5229
Total fee - 14 246 900 UAH.
Sumy region
Number of valid licenses - 4522
Total fee - 13 425 600 UAH.
Kharkov region.
Number of valid licenses - 8542
Total fee - UAH 26,210,300.
Kherson region
Number of valid licenses - 4,508
The total fee is UAH 5,117,600.
Chernihiv region
Number of active licenses - 4887
Total fee - UAH 10,097,800.
Total total number of licenses - 56,153
The total fee for them is UAH 166,863,100.
According to the data of the Ministry of Economy regarding licenses to conduct business activities for mediation in employment abroad, the number of licenses issued by regions is:
Autonomous Republic of Crimea - 17;
Sevastopol - 24;
Dnipropetrovsk region - 3;
Donetsk region - 62;
Zaporozhye region - 41;
Luhansk region - 9;
Mykolaiv region – 46;
Sumy region - 6;
Kharkiv region - 118;
Kherson region - 102;
Chernihiv region - 1
Total - 429
The amount paid to the budget is not indicated, but based on the fact that part one of Article 14 of the Law of Ukraine “On Licensing Types of Economic Activities” determines that a one-time fee in the amount of one subsistence minimum is charged for the issuance of a license, based on the subsistence minimum for able-bodied persons, valid on the day the licensing authority decides to issue a license, unless another amount of the fee is established by law.
And the cost of living for 2022 for an able-bodied person is UAH 2,600. It can be assumed that approximately UAH 1,115,400 was paid for these licenses.
In general, the total fee for licenses is UAH 167,978,500. (about $4.3 million)
We also tried to calculate the cost of the main brands that were forced to leave these territories of Ukraine as a result of the occupation. In particular, the cost of the most popular Ukrainian brands in the top 100 alone is estimated at more than $6.2 billion. Taking into account the fact that about 20% of Ukraine’s territories are now under the control of the Russian Federation (including Crimea), this can presumably be about 1.2 billion dollars of intangible losses. Taking into account the cost of licenses, the total amount is $1.204 billion.
It is also worth noting that more than half of the country's population suffered significant moral damage.
In particular, because of the war, thousands of Ukrainian citizens experienced:
- physical pain and suffering in connection with injury or other damage to health;
- mental suffering, in connection with unlawful behavior in relation to himself, members of his family or close relatives;
- mental suffering, in connection with the destruction or damage to property;
- humiliation of honor and dignity, as well as the business reputation of an individual or legal entity.
- millions of citizens were forced to leave their place of residence and move to another region or country. Which can also be attributed to moral damage.
It is virtually impossible to objectively determine the amount of this harm in terms of money.
But conditionally, we can assume that virtually every citizen of the country received moral damage to varying degrees from the start of a full-scale war in Ukraine.
Recently, the Cabinet of Ministers announced the new population of Ukraine. As of January 1, 2022, there were 34.5 million people in Ukraine. These data were provided to the government by the State Statistics Service for the preparation of the state budget for 2023. Earlier, the agency reported that the population in Ukraine as of January 1, 2022 amounted to 41.2 million people. The State Statistics Service also included the population in the parts of Donetsk and Luhansk regions occupied since 2014.
Based on the practice of the courts for the reimbursement of moral compensation, it is possible to derive the average amount of compensation in individual cases:
- for damage to business reputation - up to 10,000 UAH;
- for injuries received in an accident - from 20,000 to 30,000 UAH;
- for a fatal outcome - an average of 200,000 UAH;
- for illegal dismissal - from 3,000 to 5,000 UAH;
- for the protection of consumer rights - from 1,000 to 2,000 UAH.
Conventionally, the amount for compensation for moral damage per person is in the range from a minimum of UAH 1,000. to the maximum - 200 000 UAH.
Therefore, the amount of moral compensation is in the range from a minimum of UAH 41.2 billion. up to UAH 8.2 trillion (from $1 billion to $210 billion)
As a result, the total amount, taking into account the cost of brands and licenses, is in a wide range from 2.2 billion to 212.2 billion US dollars.
That is, in addition to material losses, Ukraine can demand the recovery of at least $2.2 billion from the Russian Federation, or, if estimated in the medium range, about $100 billion of non-material losses.
These estimates can serve as a guide both for possible future financing of projects related to the restoration of Ukraine, and for the payment of reparations from the Russian Federation for significant damage to our state.
Ruslan Bortnik, Oksana Krasovskaya, Igor Pechenkin
for the Ukrainian Institute of Politics
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Separately, we express our sincere gratitude to the Ministries and Departments that provided prompt and comprehensive answers and information to assess the intangible losses of Ukraine.
In particular:
• Secretariat to the Cabinet of Ministers
• State Customs Service of Ukraine
• Ministry of Economy of Ukraine
• State Service of Ukraine for Emergency Situations
• State Service of Ukraine on labor issues
• Ministry of Education and Science of Ukraine
• Ministry of Environmental Protection and Natural Resources of Ukraine
• National Council of Ukraine on Television and Radio Broadcasting
• State Service of Ukraine for Medicines and Drug Control
• State Service for Special Communications and Information Protection of Ukraine.
• Luhansk Regional State Administration
• Nikolaev Regional State Administration
• Donetsk Regional State Administration
• Zaporozhye Regional State Administration
We are also grateful for the answers provided:
• State Inspectorate for Nuclear Regulation
• Ministry of Health
• Kharkiv Regional Military Administration
•The National Commission for state regulation in the fields of energy and utilities
• Department of Housing and Communal Infrastructure
• State Transport Security Service
• State Aviation Service
