Recovery Without Investments: Garbaruk Analyses Key Barriers, Available Reserves, and Prospects for the Development of the Ukrainian Economy

Despite the Ukrainian government’s optimistic statements regarding the country’s investment attractiveness, the reality is much more complicated.
In an exclusive commentary for «Kommersant Ukrainian», international expert, economist, and member of the Economic Discussion Club Ihor Garbaruk explained why investors are still reluctant to invest in Ukraine, what the state must change, and which sectors could become future “growth points.”

“There is no real investment interest yet. The government has no comprehensive proposals for investors. At the moment, everything boils down to selling off state property, mineral resources, and agricultural land for pennies,” Garbaruk emphasizes.

He believes that the state strategy should be based not on the emergency sale of assets, but on a clear plan for recovery and support of national producers.

The Cost of War: Billions in Losses and Decades of Recovery

According to World Bank estimates:

• $176 billion — direct losses to Ukraine,

• $588 billion — indirect losses,

• $524 billion — required for full recovery over the next 10 years.

“Each year, Ukraine must attract between $17.6 and $52.4 billion for reconstruction,” notes the economist.
“But if the level of direct investment remains at its current level — just over $3.5 billion — the question arises: where will the rest come from? And how long will recovery take — 15, 20 years, or even longer?..”

One of the most striking examples of economic loss is the situation with JSC “Automobile Roads of Ukraine”:

Since the start of the full-scale invasion, 59 production bases and 211 pieces of equipment have been destroyed or damaged. Another 1,258 units of machinery and 358 infrastructure facilities remain in combat zones or occupied territories, Garbaruk explains.

Losses by region:

• Donetsk region — 67 facilities (31 since 2014),

• Zaporizhzhia region — 63,

• Luhansk region — 62 (25 since 2014),

• Crimea — 121 facilities lost since 2014.

“Today, the issue of seizing and selling Russian assets abroad is more relevant than ever. These funds must go toward compensating Ukrainian companies that will rebuild the country,” stresses the expert.

Foreign Investors Are Not the Main Donors of the Ukrainian Economy

“The legal form of foreign capital presence — LLCs, joint ventures, or representative offices — doesn’t matter much. The biggest investor in Ukraine remains… migrant workers, who send billions of dollars home every year,” Garbaruk emphasizes.

Remittances from labor migrants:

• 2021 — $15 billion

• 2022 — $13 billion

• 2023 — $11.7 billion

The main reason for investor restraint, says the expert, is the lack of effective investor protection, especially for domestic investors.
If the government establishes transparent rules and demonstrates readiness to support Ukrainian businesses, it will send a strong signal to foreign investors as well.

Untapped sources of financing:

• $148 billion — taken offshore,

• $50–80 billion — citizens’ savings outside the banking system,

• 35–37% — share of the shadow economy in B2B and B2C segments.

“These funds shouldn’t be consumed; they must be directed into strategic infrastructure projects, logistics hubs, and technology parks,” adds Garbaruk.

The Defense Industry as the Main Driver of the Future Economy

“For the next 10–15 years, Ukraine will serve as Europe’s security shield. Therefore, the defense-industrial complex must become the backbone of the national economy,” the expert is convinced.

Key principles of investing in the defense sector:

• State funds should remain inside the country, not flow abroad,

• Procurement of services from domestic contractors,

• Cooperation and localization of production (explosives, electronics, etc.),

• Construction of factories to produce scarce components.

Garbaruk outlines three key vectors for attracting targeted investment:

1. High-tech enterprises — based on Ukrainian innovations for defense.

2. Reindustrialization — mining, machine building, chemistry, pharmaceuticals, and agricultural processing.

3. Infrastructure and logistics — a long-term state policy of positioning Ukraine as a transport and logistics hub.

Since the beginning of the full-scale war, the geography of investment has changed:

• Dnipropetrovsk region: from $421.7 million (2023) to $773.5 million (2024),

• Kyiv region: from $474.2 million to $330.7 million,

• Lviv region: from $424.2 million to $265.2 million,

• Kyiv city: a decline from $3,116.5 million to $1,826.1 million.

“Investors are searching for new, relatively safe regions to place their capital. This trend must be taken into account in regional policy,” Garbaruk notes.

Garbaruk is convinced that Ukraine has enormous domestic potential — both human and financial.
However, without real investor protection, without focusing on national entrepreneurs and strategic industrial policy, foreign investments will remain nothing more than a dream.

Foreign investors will inevitably repatriate most of their profits abroad.
Domestic investors, on the other hand, are far more likely to keep their earnings in Ukraine and reinvest in expanding their production capacities.

During the business discussion “Bukovel as an Investment Magnet: Has the Last Train Already Left?”, organized by Kommersant Ukrainian, Anna-Maria Padlevska, manager of the YouControl analytics system, noted that despite the full-scale war, foreign businesses continue to invest in Ukraine’s economy.
Between 2022 and August 2025, dozens of new companies with foreign capital have been registered in Ukraine.

The most active investor countries remain:

• Turkey — the undisputed leader by the number of new projects;

• USA, Poland, and Germany, which together with Turkey form the top five key partners.