Ukraine’s Economy Will, Ultimately, Lose It the War, by Ian Proud

Ukraine doesn’t have the economy to wage a long war with Russia and its much larger population and economy. From Ian Proud at antiwar.com:

In his recent article on attritional warfare, Alex Vershinin at the Royal United Services Institute remarked that ‘war is won by economies, not armies’. Put another way, the country that can outspend its rival in military endeavour will ultimately prevail.

To defeat Russia, Ukraine would need economic resources that it does not have and will not be able to obtain.

It isn’t just that Ukraine’s economy is now more than ten times smaller than Russia’s. The problem runs much deeper. Since the Ukraine crisis started in 2014, Ukraine has ducked opportunities to enact the structural reforms it needs to tackle deep-seated corruption and diversify/strengthen its economy.

Ukraine needed either to set a course towards an economic model that exports and has spare capital to invest, including overseas, or towards an economic model that is comfortable to import and can attract foreign investment to offset the difference. At the moment, Ukraine is neither and it can’t make the cardinal shift while war is raging.  Real economic reform in Ukraine has therefore sat in the pending tray for a decade.

Data from the National Bank of Ukraine shows that the country consistently imports more than it exports. Not since 2022. Since 2006, the year after the Orange revolution. While on average, Ukraine’s yearly trading shortfall was $11bn in the ten years before war broke out, that figure almost tripled to $31.6bn in 2022 and 2023.  Yes, exports of goods have fallen since war broke out, by 17% and 30% in 2022 and 2023 respectively compared to the average.  But, critically, imports of services have also doubled since 2021. Ukraine’s trading surplus in services amounted to $3bn p.a. between 2012 and 2021; since 2022 it has slumped to a deficit of $9.8bn.

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One response to “Ukraine’s Economy Will, Ultimately, Lose It the War, by Ian Proud

  1. Sun von Rommel's avatar Sun von Rommel

    Attrition is the one thing that never changes in WAR.

    The leaders we had in WWII knew this just ask Curtis Lemay and “Butcher” Harris of RAF Bomber Command with their 1000 bomber raids led by Mosquito Pathfinders with flares to mark the target.

    The RAT Fink Blackrock will build the UKE 404 back better while having a testbed for Great Reset Leap Forward.

    The Bear and the Dragon are allies now, something the former adults in charge knew to never allow to happen.

    Divide and conquer used to be used on them and not in Das Homeland.

    O/T-ULLL-TRAA! morale maintenance with a Pineland run to see Harold the Brain, he is getting a 1000 gallon gasoline tank for the homestead, you never can be too prepared as gas shot up by .30 cents locally and almost .40 along interstate off ramp stations.

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