Let’s rebuild using Russia’s frozen assets, says head of Ukrainian bank in the West

Shevchenko’s job as central bank chief, a role he has held since 2020, has gone well beyond the usual manipulation of interest rates and financial sector regulation.

He says his primary wartime task is to “maintain financial stability and ensure the smooth functioning of critical infrastructure”, but he is also part of kyiv’s efforts to pressure the West.

“To bring victory closer, we are also working hard on the financial front as we call on multinational corporations and institutions to impose sanctions on Russia and its ally Belarus.”

While Ukraine has faced many economic challenges in recent years – the loss of Crimea, fighting in the Donbass, the collapse of the hryvnia, its currency, an IMF bailout and Covid – none are turned out to be as crippling as Putin’s war.

After the “shock” of the first days of the war, Shevchenko says the Ukrainian economy has begun to “adjust to operating under martial law”.

Consumer demand has naturally shifted towards goods needed for defense, medical supplies, energy and basic necessities. The need for imports is also likely to increase as production at Ukrainian factories has been hit and stocks have run out, he adds.

“The Russian military aggression against Ukraine has disrupted many production and supply chains, [and] led to a decline in economic activity and private consumption,” says Shevchenko.

“It is very difficult to make assessments as Russia continues to attack our country.”

What remains of Ukraine’s economy once Putin is done is still uncertain and depends on the duration of the conflict and the extent of the destruction. Workers who fled may return home, but much of the country’s productive capacity in the fight against hotspots may have been wiped out, taking years to rebuild.

“We realize that everything will mainly depend on how and when this war ends for Ukraine. If we win soon, protect our territory and strengthen our ties with the EU, we will be able to revive our economy in due time.”

“Defending the foundations of democracy”

It’s not just weapons that kyiv needs to fight Putin, but funding – both during the war and during the recovery. Shevchenko says Ukraine will need “massive aid” to fund its recovery, but expects to “quickly recover our country’s economic potential” if enough aid is provided.

“International support is also very important to maintain our financial defence,” he says, estimating that aid has topped $20 billion so far.

He urges people to donate to his army and humanitarian causes, saying, “Ukraine not only defends its own independence, but also the foundations of democracy itself.”

Shevchenko, 49, was born in Tula in the Soviet Union, now part of Russia. He worked in a mine before going to university in Kharkiv, Ukraine’s second city and a region devastated by Russian bombing, before embarking on a career in finance.

After serving as chairman of Ukrgasbank, he became governor of the NBU in July 2020 as the economy grappled with Covid restrictions.

While Ukraine is expected to suffer a sharp contraction, the wave of Western measures and corporate self-sanctions are also expected to lead to huge GDP losses in Russia.

It is hoped that mounting pressure on Russian businesses and households will persuade the Kremlin to abandon a war it has struggled to win.

Shevchenko wants the West and its corporations to go even further in hitting the heart of the Russian economy, even if it hurts them.

“I understand that means big financial losses,” he says. “However, to work further in Russia is to reconcile with one’s conscience, which nothing can justify.

“Cash flowing in or out of Russia today is ‘blood money’ that funds the murder of Ukrainian civilians and the ruthless destruction of Ukraine.”