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Andrew Tobias
Andrew Tobias

Money and Other Subjects

A Huge, Brilliant Idea For Helping Ukraine

November 20, 2023November 19, 2023

And at no cost to us, no less.

Fareed Zakaria lays it out this way:


Is there anything that can be done to address . . . stalemate on the frontlines and waning support in Western capitals?

Actually, there is a policy that could help on both fronts:

Set up an international and legal process by which Russia’s $300 billion-plus of frozen reserves could be used to aid Ukraine’s reconstruction, which the World Bank estimates would cost more than $400 billion over the next ten years.

In one swoop, that would signal to Putin that Ukraine will not face a funding crisis and that even were Trump to be elected, these funds, administered through some international body, say in Switzerland or Belgium, would continue to flow to Kyiv.

There are challenges to this policy. Russia’s reserves lie in various countries, but European allies hold most of them, and their governments worry that they don’t have the legal authority to divert them. Laurence Tribe, the distinguished legal scholar, and some of his colleagues have written up a definitive case as to why it would be legal and appropriate to go down the path of using Russian reserves for Ukraine’s reconstruction. Former Treasury Secretary Larry Summers, former World Bank head Robert Zoellick, and former 9/11 Commission executive director Philip Zelikow have argued persuasively that it is good policy.

Tribe’s basic argument is that Russia has engaged in a massive and systemic violation of international law and norms and that it is appropriate, indeed necessary, for there to be some price to pay for this. To reject this logic in favor of one that protects Russia’s “property rights” is perverse since Russia has engaged in brutal, sustained violations of Ukraine’s property rights and has taken the lives of thousands of its civilians as well.

Russia’s attack on Ukraine is a core violation of any conception of a rules-based international order. It strikes me as right and wise to force it to pay a heavy price. But how that policy is pursued matters. In the past, the United States has tried to enforce its own conception of international rules unilaterally, often generating huge opposition to it. The approach we should take this time is the opposite.

This policy should be rooted in international consensus, law and norms. Legal opinions like Tribe’s should be presented. An international legal organization and process of adjudicating claims should be established and the funds handled through it. Russia’s assets and Ukraine’s reconstruction should serve as a building block for international law and norms that help shore up the rules-based order. As Summers, Zoellick, and Zelikow note, if this case sets the precedent that a country that engages in naked aggression might find that its dollar reserves are in jeopardy, that is not a bad precedent for a world in disarray.


Indeed, it “would strengthen, not undermine, international law.”

An idea worth spreading far and wide — and implementing ASAP.

 

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