Ukraine’s pockets are empty and it looks like its rich uncle is going to pull in his purse strings. That makes it tough to fight a war. From Ian Proud at strategic-culture.su:
Corruption is seldom mentioned in a daily propaganda barrage that does not permit any criticism of Ukrainian governance.
To defeat Russia, Ukraine would need economic resources that it does not have and will not be able to obtain.
‘War is won by economies, not armies’ said Alex Vershinin, in a 2024 RUSI paper. Put another way, the country that can outspend its rival in military endeavour will ultimately prevail.
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.
Take corruption for example. In a Time Article in October 2023, an Adviser to Zelensky remarked in confidence that Ukrainian officials are ‘stealing like there’s no tomorrow’. In 2024, there were reports that capital intended for investment to strengthen Ukraine’s energy grid against missile attack had been largely embezzled. Western media reports on corruption of this magnitude are as welcome as they are rare. Corruption is seldom mentioned in a daily propaganda barrage that does not permit any criticism of Ukrainian governance. In reality, it has always been one of the biggest and most stubborn barriers to Ukraine’s aspiration to join the EU.
More broadly, at a macro level, 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.
Data from the National Bank of Ukraine shows that the Ukraine has for many years imported 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 has averaged over $30bn per year in the three years since war started.
