Landmines cost Ukraine $11 billion in GDP each year, says report

By Olena Harmash

KYIV (Reuters) - Ukraine loses more than $11 billion annually in gross domestic product due to landmines laid since Russia's invasion, which create no-go areas and so reduce exports and taxes, according to a report that calls for new approaches to aid and demining.

The invasion has turned Ukraine into the world's most heavily mined country, according to a February 2024 estimate by the United Nations and the Ukrainian government. 

The report by Ukraine's Economy Ministry and the Tony Blair Institute for Global Change said that the presence of landmines posed challenges for Ukraine's economy and post-war recovery and also contributed to global food insecurity.

"This is not just a Ukrainian issue; it is a global imperative," Tony Blair, TBI executive chairman, said in a statement.

"The world must rally behind the urgent demining of Ukraine, not only to support Ukraine's economic resilience and recovery but also to ensure the stability of food supply for hundreds of millions of the most vulnerable people across the globe."

The report showed that at current levels, landmines and explosive remnants of the war suppressed Ukraine's GDP by $11.2 billion each year – equivalent roughly to 5.6% of national wealth as measured by gross domestic product in 2021.

Ukraine's economy shrank by about a third in the first year of the war, and while it returned to growth in 2023 and 2024 economists estimate the country's GDP remains smaller than before the 2022 full-scale invasion. 

The most heavily affected regions were the northeastern Kharkiv and Sumy regions, the Chernihiv region in the north, and Mykolayiv in the south.

The study showed that due to the mines, regional tax revenues were about $1.1 billion lower and the value of Ukrainian exports was reduced by about $8.9 billion.

During the war, agricultural products are Ukraine's main exports and a key source of hard currency revenues. Data from the agriculture ministry showed that about 2.5% of the arable land had been mined and was not in use.

Prime Minister Denys Shmyhal said that when Russia's invasion began Ukraine had not a single demining vehicle. But now it had up to 100 and the government was aiming for at least 200 vehicles and 10,000 sappers to be able to demine the mined area in the next five years. 

As of September about 139,300 sq km (53,784 square miles) of land across Ukraine - an area larger than England -- were mined, the report showed. 

The World Bank has estimated that about $34.6 billion would be required to demine Ukraine safely. 

The report said that innovative financing mechanisms, including an agricultural bond market, would be needed to close the funding gap.

(Reporting by Olena Harmash, Editing by William Maclean)