Veterans and Ukraine’s Human Capital Development for Recovery

Iryna Dobrohorska
Investment into social recovery and an understanding of the role of human capital, including that of those who have defended the country in wartime, will be crucial for the future of Ukraine’s economy.

The Ukraine Recovery Conference (URC) in Berlin on 11–12 June will focus on attracting foreign investment into the country. This cannot be fully successful unless Ukraine sets the development of human capital as a strategic measure for its recovery process. And the reintegration of veterans is a key aspect of this. The URC should be a key moment for elevating the issue of what the future holds for its combatants and boosting the development of its new veterans policy. 

On May 28, the Ministry of Veterans Affairs organized a pre-URC summit in Kyiv to discuss the policy for veterans and to strategize on their role in developing Ukraine’s economic potential. As a result of the summit, the ministry has reaffirmed its commitment to further revising the policy, and it signed memoranda with several foundations on expanding social and rehabilitation services for veterans.

Ukraine’s GDP grew by 4.5% in the first quarter of the year, and the Ministry of Economy forecasts that the rate will be 5% for 2024. This is despite challenges including high migration and displacement of refugees abroad and a complex situation in the labor market, which is under stress in part due to the mobilization process. The business community is flagging a shortage of skilled staff.

With the new law on mobilization that entered into force on May 18 lowering the age for mobilization from 27 to 25 years, as well as Russia’s ongoing offensive in eastern and southern parts of the country, the eventual number of veterans will increase further. This will make the issue of demobilization even more important. 

According to different estimates, over 2 million veterans will be returning from military service to civilian life once the war ends.

According to different estimates, over 2 million veterans will be returning from military service to civilian life once the war ends and the government launches the demobilization process. As service personnel are in the 18–60 years group, most veterans will be of age to be part of the active workforce. 

Given the ongoing lack of transparency over the mobilization process and the aspiration for a much-awaited demobilization of those who have been serving since the early months of the full-scale invasion in 2022, a new policy on the reintegration of veterans is more than timely. However, the new law does not provide any clarity about the prospects for demobilization, due to a combination of the ongoing situation on the front lines and the lack of strategic vision and consensus among the political elites. 

Therefore, the question remains open as to whether and to what extent Ukraine’s recovery process will be able to draw on the veterans, and whether there are state systems in place to support those returning from military service with their physical and mental health needs, reskilling, and reeducation. 

The Ministry of Veterans Affairs is mandated to coordinate with other government agencies about their employment. There is recognition of the need to integrate veterans into the labor market, with the Ministry of Economy taking the lead on promoting veterans’ entrepreneurship through grantmaking. Still, there is a challenge in understanding the prospects for human capital development when it comes to them. There is no comprehensive policy in place in this regard with a relevant evidence base and reliable projections for the number of veterans who would be prepared and able to return to the labor market. 

The Ministry of Veterans Affairs projects that each $1 invested in their rehabilitation will translate into $6 for the economy.

The integration of veterans into Ukraine’s broader frame for human capital development will require a thorough understanding of their experiences and the integration of state and nonstate support mechanisms. This will enable veterans to return to civilian life in a way that enables them to play an active part in the economy. The Ministry of Veterans Affairs projects that each $1 invested in their rehabilitation will translate into $6 for the economy. But this will only be achievable with a comprehensive service-based support system in place. 

From the perspective of donors, investing in the evidence base for understanding the needs of veterans and for making relevant economic projections would be a worthwhile long-term investment. At a time when Ukraine struggles with a large demand to meet the psychosocial needs of citizens and a complex security situation, the state and its international partners should aim to strike the right balance between meeting the demands of mobilization and managing the demobilization process, as well as to set up an appropriate support system for veterans to replace the benefits-based one inherited from Soviet times. 

Most importantly, the state should not impose any expectations on veterans for playing a role in Ukraine’s recovery before it has invested in their physical and psychosocial rehabilitation. Studying the life journey of veterans and identifying specific areas of their transition back to civilian life must be the starting point for offering a revised framework to support them.