By Murad Rakhimov | 2025-03-24

TASHKENT -- Although Russia's full-scale war against Ukraine is now stretching into its fourth year, Kyiv has long been preparing for its postwar reconstruction.

Russian drones, bombs, missiles and artillery have decimated thousands of civilian and economic infrastructure assets.

The cost to revive Ukraine's economy increased from $486 billion to $524 billion in one year, according to an updated joint Rapid Damage and Needs Assessment (RDNA4) released last month by the Ukrainian government, the World Bank Group, the European Commission and the United Nations (UN).

The amount of direct damage in Ukraine since the start of the war has now reached $176 billion (€170 billion), according to the RDNA4 released February 25, up from $152 billion (€138 billion) a year earlier.

Housing, transport, energy, commerce and industry, and education are the most affected sectors, the report said.

Thirteen percent of the country's housing stock has been damaged or destroyed, affecting more than 2.5 million households, it said.

Meanwhile, Ukraine has recorded a 70% increase in damaged or destroyed energy assets. It will cost almost $68 billion (€66 billion) just to rebuild energy infrastructure.

A basic labor shortage

Ukraine is focused on reviving its economy -- a task that will involve more than massive financial resources.

It is already clear that the country is suffering from a labor shortage, and this shortage will be catastrophic after the war ends, analysts say.

A key factor in the process of postwar revival is attracting migrant workers, economists, politicians, businesspeople and the public therefore say.

Surveys of members of the business community conducted regularly by the National Bank found that in 2023, 20% of businesses complained of a worker shortage. This number jumped to about 80% in late 2024.

According to the State Migration Service, between 2021 and 2024, about 28,000 citizens of countries that lack visa waiver programs with Ukraine received permits for immigration to Ukraine.

At the end of 2024, it said, 47,000 foreigners were staying in Ukraine on a temporary basis -- a number four times lower than in 2021.

Labor migration is important for both countries of origin and host countries, especially if the host countries have a low birth rate, said Alisher Ilkhamov, director of the London-based Central Asia Due Diligence think tank.

"But in Ukraine the labor shortage was caused by other factors too: the loss of manpower [combat deaths] on the front, the death of civilians in attacks and the mass emigration of refugees to Western countries, from which not everyone will return to Ukraine after the war ends," Ilkhamov told Kontur.

Ukraine still has a large population of migrant workers, despite the risk of being caught in a bombing, he said.

When the war ends and work begins to rebuild destroyed infrastructure and industrial assets, demand for migrant workers will rise, especially if foreign investment flows into the country, Ilkhamov said.

Postwar Germany experienced something similar during its labor shortage that brought in thousands of Turks (the Gastarbeiter). These migrants, whom the German economy badly needed, created entire neighborhoods of their own, Ilkhamov said.

France also saw a similar situation after World War II and then again after its former colonies in Africa gained independence. Waves of job seekers surged into the country, especially from the Arab countries of the Maghreb, he said.

"Generally, the bulk of the migrant workers, if they come from poor countries, work in industries that don't require advanced qualifications," Ilkhamov said. "These are mainly the construction, agriculture, commercial and transport sectors and public services."

New migration policy

Right now it costs more for local employers in Ukraine to hire an immigrant than it does to hire a Ukrainian.

The inviting party needs to compensate foreigners for moving, provide housing and even assign them someone who will help them acclimate in the new country.

The employer pays a special administrative tax for authorization to recruit each foreign laborer in Ukraine. This tax ranges from 15,000 to 30,000 UAH (€332–€665) depending on the period of validity.

The business community realizes that drawing foreigners to Ukraine will be a major challenge, Vasily Voskoboinik, president of the All-Ukrainian Association of Companies for International Employment, told Kontur.

"The first thing is to reconstruct critical infrastructure, roads, junctions and large structures, including facilities for the indigent. That will happen in practically every region of Ukraine," he said.

To accomplish this, Ukraine will need to attract an estimated 8.6 million additional workers to its labor market by 2032 compared to 2022, according to the International Labor Organization, a UN agency. That is how many the country needs for its economy to grow by 10% every year.

Another factor to take into account is that on top of deaths in combat, the exodus from Ukraine continues: half a million Ukrainians emigrated last year.

Voskoboinik is spearheading an initiative called Ukraine's Migration Policy: the Path to Improvement.

"As part of this project, we're analyzing the experience that other countries such as the United States, Germany, Australia and New Zealand have had attracting labor," he said. "Work has already been put in motion to draft a new migration policy."

However, the amount of foreign labor that needs to be brought into postwar Ukraine depends greatly on the specific sectors of the economy.

Even before the war the country needed more agricultural workers, Denys Marchuk, a Ukrainian agriculture observer, said. Russia's 2022 invasion exacerbated the labor problem.

"I think we'll be able to recruit a substantial portion of those who come back from the war to work in agriculture," he told Kontur. "So right now we're not talking about bringing in migrant workers. Everything will depend on the exact timelines of the end of the war."