Oleksandr Chupak is Head of Economic Programs at the Non-Governmental Analytical Center “Ukrainian Studies of Strategic Research”
Discussions about reducing aid to Kyiv are currently at their loudest since the start of the full-scale war. What would be the consequences of such a step?
At the end of 2023, there was some unfortunate news for Ukraine on the diplomatic front. The European Union could not approve the allocation of 50 billion euros in aid to Kyiv due to Hungary’s position. Meanwhile, in the United States, domestic political disputes prevented the U.S. Congress from voting on providing Ukraine with $61 billion.
This does not mean that Ukraine is left alone in this battle. The current weapon supply contracts are still valid, and Ukraine has been receiving financial assistance as per the agreed-upon plan. However, the delays in support make one wonder what could happen if Ukraine is left unsupported.
When referring to military aid (and not financial assistance), the term primarily means the efforts of the United States. Based on the data provided by the Kyiv Institute of World Economics, from January 24, 2022, to October 31, 2023, the United States has supplied us with weapons worth 43,9 billion euros. This amount is more than two and a half times higher than the second-ranked country, Germany, which supplied weapons worth 17,1 billion euros during the same period.
The issue of reduced supplies has already been raised and considered by Ukraine. Currently, we are not in a position of advantage on the battlefield, but we are succeeding in neutralising the aggressor’s offensive capabilities. If the pace of supplies is not restored, our ability to deliver local counterattacks will be significantly undermined in a few months, and calls for ceasefire negotiations will become increasingly vocal.
What kind of military assistance has Ukraine been receiving?
During the counteroffensive a few months ago, it was reported that Ukraine was using around 6,000 artillery shells per day. If the supply of ammunition is reduced significantly, we will need to be more selective in choosing targets. This means we will only shoot at identified enemy locations. Furthermore, the gradual loss of equipment will force us to rely on manpower, resulting in higher casualties.
The military aid provided by the United States is currently divided into three parts:
1. Packages of defence assistance within the Presidential Drawdown Authority (PDA)
2. The Ukraine Security Assistance Initiative (USAI)
3. Funds allocated to replace the weapons provided under the PDA
PDA grants the President the power to move weaponry from American stockpiles to Ukraine. Typically, it is ready for immediate dispatch and arrives quickly. Funds within USAI are allocated towards manufacturing new equipment, purchasing weapons for Ukraine on the global markets, and training Ukrainian military personnel. New production takes a significant amount of time, usually spanning 1-2 years for manufacturing and several more months for delivery.
The United States Department of Defense releases new aid packages roughly every two weeks. The pace of supply was highest in January 2023 when Western countries began preparing Ukraine for the counteroffensive. On average, within PDA, Ukraine receives weapons worth around $1 billion per month. However, since August 2023, the rate of deliveries started to slow down. In December 2023, we were set to receive 20% less than the average annual level.
How long will the supplies last?
Even if the West stops providing new aid, the supply under existing contracts will last for many more months. From now until the end of 2024, Ukraine will receive monthly shipments of ammunition and military equipment worth $200-300 million from the United States. The Europeans, who previously provided Ukraine with around $1 billion worth of aid every month, will continue to do so.
In recent weeks, representatives of the EU and the UK have repeatedly said that efforts need to be increased in light of the issues with aid from the United States. However, European governments face the same problems as Congress. Various political forces, often funded by Russia, press their officials to stop providing funds to the “corrupt” Kyiv for waging war “without a chance of success”. Hence, European countries are likely to have a similar reaction to the decrease in aid from the United States.
Undoubtedly, such a situation will trigger calls for “peace” talks. If Putin succeeds in securing a ceasefire deal, he will declare victory not only over Ukraine but also over all of NATO. Undoubtedly, he will then immediately begin preparing for a new plan to occupy Ukraine’s entire territory.
Theoretically, the U.S. Department of Defense can provide aid to Kyiv without Congress’s decision, for example, by using funds from its annual budget due to cuts in other programs. However, such actions could be interpreted as a reduction in the defence capability of the United States and will undoubtedly provoke a political and media backlash.
Why is Lend-Lease not working?
The Law on Lend-Lease for the Protection of Democracy in Ukraine, which was adopted in May 2022 as an adaptation of the legendary law from the times of World War II, caused a media frenzy but has never been implemented. Moreover, on October 3, 2023, the law lost its validity and was not renewed.
The Lend-Lease mechanism involves transferring weapons, equipment, and other necessary materials through lease or long-term borrowing, which is paid for by the recipient country. This is different from other types of assistance that are provided for free. Therefore, Ukraine will not be required to repay the 43,9 billion euros owed to the Americans.
Several months ago, Ukraine’s Ambassador to the United States, Oksana Markarova, stated that she was urging lawmakers to extend the law. Throughout its duration, Kyiv and Washington failed to agree on Lend-Lease supply volumes, which were considered as a backup option. Valeriy Chaly, former Ukrainian Ambassador to the U.S., noted that Lend-Lease could be extended via a defence budget amendment for 2024.
At present, both parties agree that free means of transferring weapons are more effective than Lend-Lease, which now holds only symbolic value. Nonetheless, considering the recent trends, Ukrainian diplomats must increase their efforts to secure assistance from any potential sources.
