U.S. President Donald Trump and Russian President Vladimir Putin are scheduled to hold a bilateral meeting at a U.S. military base in Anchorage, Alaska, on the 15th (local time), as corporations are closely watching the developments of the Russia-Ukraine war. Given the challenging situation for domestic business expansion, a ceasefire or end of the war could open up new business opportunities in Ukraine.
On the 14th, a corporations official said, "If the war ends, Russian crude oil and natural gas will be released, leading to a decrease in oil prices, which could result in a decline in overall raw material prices, allowing not only the construction industry but also energy-related corporations to capture business opportunities." Another corporations official noted, "In a stagnant economy, a new market could open, so we are paying close attention to this meeting."
According to the 'Fourth Rapid Damage and Needs Assessment Report (RDNA4)' jointly released by the European Union, the Ukrainian government, the World Bank, and the United Nations in February, it is estimated that a total of $524 billion (approximately 725 trillion won) will be needed for the reconstruction and recovery of Ukraine over the next 10 years.
The Ukrainian government has allocated $7.37 billion for priority sector support, including housing, education, health, energy, transportation, and mine removal, with support from various countries around the world. However, there is a funding shortfall of $9.96 billion for recovery and reconstruction, necessitating participation from the private sector.
The RDNA4 details indicate that the demand for reconstruction and recovery is highest in the dwellings sector (approximately $84 billion), followed by the transportation sector (approximately $78 billion). The energy and mining sector (approximately $68 billion), commercial and industrial sector (over $64 billion), and agricultural sector (over $55 billion) also show high demand for reconstruction. As such, once reconstruction in Ukraine gains momentum, the steel, power, and construction industries can capture direct and indirect business opportunities.
Korean corporations have experience participating in the reconstruction efforts in Iraq. Between 2004 and 2008, Hyundai Engineering & Construction and Daewoo E&C restored roads, bridges, and sewage facilities in the Kurdistan region of Iraq and constructed hospitals and schools. Hyosung Heavy Industries provided transformers and power equipment in Baghdad and Basra. In the 2010s, Hanwha participated in the new city construction project in the Bismayah region of Iraq, and GS Engineering and Construction built a refinery in the Karbala region.
There is also a view that business participation should be approached with caution due to Ukraine's financial difficulties and unresolved political corruption issues. Hanwha's construction sector began work on the Bismayah new city project in 2012, but incurred substantial receivables after the Iraqi government delayed payments, resulting in losses and a withdrawal from the project in 2022.
The Korea Institute for Industrial Economics & Trade (KIET) stated in a report that "if support from Western countries such as the U.S. and Europe is halted, Ukraine could face a serious economic crisis and would lack the capacity to promote reconstruction projects due to default risks," and added, "Attention should only be given to projects where securing funding is certain and revenue is achievable, focusing on areas that can receive guarantees from international organizations or major Western countries rather than undertaking projects independently."