By – Geetaali Malhotra

Abstract

The Cost of Peace: What War Leaves Behind is a reckoning with the brutal arithmetic of postwar life. When the guns fall silent, the battlefield shifts to balance sheets where deficits deepen, welfare shrinks, and the poor pay the highest price for conflicts they did not choose. From Ukraine’s trillion-dollar rebuilding gap to Syria’s generation-long economic collapse, from America’s multi-trillion war debts to Sri Lanka’s peacetime militarisation, the essay argues that “peace” is too often a continuation of war by other means through austerity, debt, and foreign contracts. Real peace, it insists, cannot be measured in ceasefires or GDP projections, but in rebuilt schools, reopened hospitals, and restored justice. Anything less is simply war in disguise.

Introduction

When the final siren sounds and the final shell falls silent, the war is not ended, only relocated. The war zone is transferred from barren cities to government budgets, from tanks to taxes, from trenches to deficits. Peace is never a reprieve for war-weary nations; it is accounting for dollars.

The real cost of war is less apparent and longer lasting: it is financial. Nations climb out of war’s mist battered but drained, their institutions shattered, their coffers dry. The following numbers are not stories of victory, but of hard mathematics. Reconstruction takes more than courage; it takes money, skill, and time none of which war-torn countries have in abundance.

Ukraine: Amid Ruins and Receipts

Ukraine, the face of resistance, now has a reconstruction cost of $524 billion (€506 billion) about 2.8 times its estimated 2024 GDP, according to a February 2025 joint estimate by the Government of Ukraine, World Bank Group, European Commission, and United Nations. Its damage report from February 2022 to December 2024 puts direct losses at $176 billion (€170 billion), with housing, transport, energy, commerce, and education being the sectors impacted the most.

More than 13% of the housing is damaged or destroyed, with 2.5 million homes, as damage to the energy sector has risen 70% from last year’s estimate. Frontline regions account for 72% of all destruction. Housing ($84 billion), transport ($78 billion), and energy ($68 billion) are the sectors with the largest needs, with clearing of debris alone costing an estimated $13 billion.

Ukraine and donors committed $7.37 billion for 2025, leaving the gap at $9.96 billion. Private investment that will contribute one-third of the overall gap will be decisive. Reconstruction is also connected with EU membership in the analysis, framing it not as rebuilding, but building back better with new resilient infrastructure and reform.

Already, there are apprehensions that foreign titans are locking up reconstruction contracts at the expense of excluding local industries. If reconstruction is another market opportunity driven by procurement as opposed to one driven by human beings, the peace that follows will be no less forced than the war that has just ended.

Syria: A War Without Exit

Then there is Syria, where war became a way of life. The economy collapsed years before the bombing ceased. Syria had reduced its GDP by 45% by 2019, and its tax base once 11% of GDP had dropped to  just 5% by 2021, earning a revenue of about $4.5 billion. That is the entire operating budget of a nation of more than 20 million.

Syria’s GDP hovers at $17.5 billion, its external debt at between $20 and $23 billion – a dismal imbalance that makes economic recovery a mirage. But the world economy remains rigid and unyielding, labeling Syria a debtor nation only to then label it a devastated nation.

It is a warning: war can ruin an economy in years but it will take generations to rebuild. And even then, restoration is seldom a question of dignity, but often a question of discipline.

The United States: The Empire’s Bill Comes Due

Even empires cannot escape the math. The United States, flush with resources and rhetoric, has paid handsomely for its two-decade war on terror. According to estimates, its post 9/11 wars have cost between $5.8 trillion and $8 trillion depending on whether you count long-term veteran care. Of that, $2.1 trillion was spent on direct military operations, $2.2 trillion is set aside for veterans, and $1 trillion is the price of interest alone.

For a country that has historically defined itself in terms of military superiority, it’s a cold comfort: the biggest threat to American power may not be a foreign enemy, but unpaid bills.

Sri Lanka: Postwar in Name Only

In Sri Lanka, the war concluded in 2009, but peace has never quite caught up. The country continues to spend as though war is still ongoing, prioritizing the military over welfare and social development. In 2025 national budget President Anura Kumara Dissanayake’s inaugural one since taking office, the state allocated LKR 437 billion to defence, an increase from LKR 12 billion to 2024, placing Sri Lanka amongst the most militarized nations per capita. This was paired with drastic welfare cuts, with the state cutting public assistance funds by LKR 35 billion, with only  LKR 43 billion being spent on vulnerable individuals. Despite the Northern Province and other war-torn regions continuing to be under-developed and over-militarized, the fiscal priorities of the state continue to be typical of a wartime economy and not an economy of reconciliation and collective healing.

It is a cruel irony: a nation may survive a civil war, but be devastated by the peace that follows. Or, more precisely, by the terms on which that peace is negotiated.

What Real Peace Demands

What ties all these tales together- Ukraine, Syria, America, Sri Lanka is the same harsh math: war bursts budgets; peace brings cuts. Defense budgets balloon in war but public expenditures contract in peace. And always, the heaviest burden falls hardest on the least to blame: the poor, the displaced, the unemployed, the young.

Recovery today is not to reconstruct societies but is to stabilize debt, placate creditors, and soothe rating agencies. Bidding on reconstruction contracts is won by multinational corporations. Austerity is combined with debt relief, where assistance is given but sovereignty is surrendered.

It doesn’t have to be this way.

An actual postwar recovery will need to turn on its head these priorities. Debt relief must be for development, not punishment. Austerity must be the price of stability. Military expenditures must fall as wars conclude and do not become a permanent feature of the state. And foreign aid must be more than money, it must be an act of faith in local institutions.Real peace is not measured in ceasefires. It is measured in reopened hospitals, rebuilt schools, restored justice. Not the restoration of the status quo ante the war but the creation of something more just, more equal, more human. For the most grievous wound of war is not what it destroys. It is what it leaves behind.

About the Author

Geetaali Malhotra is a third-year B.Sc. (Hons.) Economics student, pursuing a minor in International Affairs and Diplomacy. She is a writer and analyst specialising in political economy, macroeconomics and economic policy.

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