Consequences for the state and the economy of Belarus, Russia and Ukraine.

No. 25: The economy is paralysed in the contaminated territories of Belarus, Russia and the Ukraine. © Chernobyl Interinform Sources (2.9)  UNDP/UNICEF: The Human Consequences of the Chernobyl Nuclear Accident. A Strategy for Recovery, January, 2002, p. 63 (2.10)  UNDP/UNICEF: The Human Consequences of the Chernobyl Nuclear Accident. A Strategy for Recovery, January, 2002, p. 66 (5.10)  Sahm, Astrid: Transformation im Schatten von Tschernobyl, Münster, 1999, p. 236 ff. (5.11)  Sahm, Astrid: Transformation im Schatten von Tschernobyl, Münster, 1999, p. 252 ff. (7.9)  Committee on the Problems of the Consequences of the Catastrophe at the Chernobyl NPP: 15 Years after Chernobyl Disaster, Minsk, 2001, p. 38 (8.6)  Chernobyl Interinform Agency: Kiew, Interview on 18.04.2002, p. 6 (16.2)  Committee on the Problems of the Consequences of the Catastrophe at the Chernobyl NPP: Interview, Minsk, 16.04.2002, p. 5 (29.1)  Ministry of the Russian Federation for Civil Defense Affairs, Emergencies and Elimination of Consequences of Natural Disasters (EMERCOM of Russia): Chernobyl Accident, Results and Problems in Eliminating the Consequences in Russia 1986 - 2001, Moscow, 2001, p. 3 (154.1)  Chernobyl Forum Report: Chernobyl’s Legacy: Health, Environmental and Socio-Economic Impacts, 2005, published by: IAEA - International Atomic Energy Agency Further literature (124)  Neunhöffer, Gisela: Belarus und die internationale politische Ökonomie, Verlag Westfälisches Dampfboot, Münster, 2000 Glossary Radiation and radioactivity Reactor Further information Social concequences

Financial consequences of the nuclear accident for the national budget and the economy
The nuclear disaster in Chernobyl damaged the economies of Belarus and Ukraine, and the local economies of the Russian regions affected, in a wide variety of ways. The total economic damage for the three countries can only be approximately estimated, according to UNDP and UNICEF. No figures have been recorded for all three countries using the same method. The losses suffered by the economy are also closely linked with the losses and costs incurred by the state (2.9; 2.10).

The Institute of Economics of the Belarussian National Academy of Sciences estimates that the country's economy will suffer losses of USD 43.3 billion in the first 30 years after the accident. The total damage is projected to be USD 235 billion over this period. This is 32 times the national budget for 1985. Chernobyl-related costs accounted for 22.3 per cent of the country's national budget in 1991, and in 1996 it was still 10.9 per cent. Currently the republic is investing about 6 per cent of its budget in the official Chernobyl programme (7.9; 16.2).

What the nuclear accident means for the economy in the countries affected is spelled out by the Committee on the Problems of the Consequences of the Catastrophe at the Chernobyl NPP under the Council of Ministers of the Republik of Belarus (Chernobyl Committee). Among the negative consequences of the accident for the economy, it lists: the disuse or loss of value of agricultural land and loss of mineral resources, lost production and the loss of labour in the contaminated territories, as well as the loss of value of products from these areas.

In the contaminated territories of Belarus, according to the survey by UNDP and UNICEF, 54 large agricultural and forestry enterprises, together with 9 industrial enterprises, had to be closed. 22 raw material deposits could no longer be used. In the contaminated territories of Ukraine, 20 collective farms and 13 companies had to be abandoned (2.10).

The companies that remain in the still inhabited contaminated territories are unable to recruit professional staff, since young and well-trained inhabitants move away. Even mildly contaminated areas are no longer attractive to investors. This downward spiral can only be broken by government investment programmes, for which Belarus and Ukraine in particular lack the money (2.9).

Ukrainian experts estimate the economic damage to their country at USD 201 billion up to 2015. By comparison, the national income of Ukraine was about USD 37 billion in 2001. In 1992 Ukraine spent about 15 per cent of its national budget on managing the effects of the disaster, and in 1996 it was still 6 per cent. Today the proportion is 5-7 per cent (8.6).

Costs incurred by the Russian state as a result of the nuclear disaster totalled about USD 3.8 billion between 1992 and 1998. Of this sum, USD 3 billion was paid in compensation to the helpers and victims (29.1). The Chernobyl Forum Report (2005) criticises the fact that many payments to Chernobyl victims are no longer justified today and are only continued out of fear of political repercussions should they cease. This prevents a concentration of aid to those truly in need of support (154.1).

Belarus and Ukraine levy an emergency tax, or Chernobyl tax, for dealing with the disaster. Initially, all companies, except for those in the agricultural sector, had to pay 18 or 19 per cent of their salary costs to the State. Later this taxt was levied at the amount of 4%. Starting with 2007 it was abolished. Russia never levied a Chernobyl tax. There, the State's costs were funded by government borrowing (5.10).

The major proportion of government funds in Belarus went first to the resettlement and infrastructure programmes, which accounted for 70 per cent of the Chernobyl tax up to 1993. In Belarus, 131 200 people had been resettled by 1996; since the accident 64 836 new houses and flats have been built for them. Since 1995 the focus has shifted, and now most of the government money goes to social and medical aid programmes (5.11).

In Ukraine and Russia, on the other hand, social benefits were accorded priority from the outset. They include monthly allowances, free or subsidised medication, free meals for children and students at school and university, and the right to an annual free respite holiday. For financial reasons, however, only some of these measures have been put into practice (2.9; 2.10).