President Volodymyr Zelensky may be finding it harder these days to convince the American and Western European law-makers to provide Ukraine with more and more economic and military aid, but his “Plan B” of seeking their help in rebuilding Ukraine’s once impressive defense-industrial base seems to have many takers.
Having significantly depleted their stockpiles to provide for Ukraine to fight Russia, the United States and its NATO partners, such as France and Germany, are finding it difficult to meet Ukraine’s increasing demands for more arms and ammunition.
Besides, their leaders, particularly US President Joe Biden, are facing political hurdles at home in fulfilling Ukraine’s never-ending wish list. Zelensky seems to have realized this harsh reality. So, now he has what he says is his “Plan B.”
In his latest interview with the Economist magazine, he talked of Ukraine’s “own strength.” While he is still positive that America will, in the end, provide military aid, Ukraine, he says, is also building up its own production in case Western supplies fall short.
“It was a message he echoed in a defiant and sober New Year’s address that was markedly less upbeat than his words on December 31st, 2022. As part of this Plan B, he is asking the American government to provide licenses to Ukraine to produce weapons ranging from artillery systems and missiles to air defense”, the magazine reveals.
It may be noted that when Ukraine became an independent country after the disintegration of the Soviet Union in 1991, it had inherited nearly 30 percent of the Soviet defense industry.
Ukrainian factories had played a key role in global supply chains and in producing and maintaining Soviet weapons systems, including missiles, tanks, aircraft engines, and components for the space industry.
But as Soviet-era technology lost its edge, there were fewer buyers in the international market in subsequent years. Ukraine’s defense exports thus were limited to Russia, something that even ended when Moscow took back Crimea forcibly in 2014.
Of course, before Russia’s invasion of Ukraine in 2022, Zelensky had made efforts to reform the country’s defense industry, which was dependent on outdated technology and faced a great paucity of skilled manpower.
Besides, as with other industries and institutions, Ukraine’s notoriety for pervasive corruption and political interference has not helped. Zelensky’s job in restructuring the state-owned defense conglomerate Ukroboronprom (UOP) with business-friendly rules and their implementation with transparency remains incomplete. And the quality of its even low-technology products is so poor that these are rejected by the frontline soldiers.
However, there have been some positive changes from the Ukrainian point of view since the start of Russia’s invasion. Some private citizens, through volunteer groups, start-ups, or small companies, have come forward to use their entrepreneurial and creative spirit to develop essential tools and devices for the armed forces, such as mortar and artillery ammunition, drones, armored vehicles, and missiles.
According to Oleksandr Kamysyhin, Ukraine’s minister for strategic industries, approximately 500 companies in the country’s defense industry are contributing to efforts at increasing weapons production in order to counter Russia’s attempts to seize more territory. Among those are 70 state-owned factories, over 200 primarily private factories producing unmanned systems, and more than 200 private sector companies involved in the production of various types of weaponry and ammunition.
If Kamyshin is to be believed, the Ukrainian arms industry has grown by dozens or even hundreds of times in 2023 compared to the previous year in some segments. Artillery ammunition production has increased by 20 times in the last 10 months, and armored vehicle production has grown by five times during the same period, he said.
Admitting that many supporting countries have significantly depleted their stocks in order to supply Ukraine, Kamyshin told the press the other day that Ukraine now sought “other forms of cooperation, including the joint production of weapons.”
Reportedly, over 60 companies have already signed an agreement to become a part of what is called “the Alliance of Defense Industries of Ukraine.” These companies are mostly from the U.S., the U.K., France, Germany, Poland, the Czech Republic and Turkey.
It is this development that makes Zelensky’s Plan B that he talked about to the Economist is understandable. The Biden Administration seems to support this plan wholeheartedly. “We’re beginning to pivot to rebuilding or building, an industrial base inside Ukraine,” William LaPlante, undersecretary of defense for acquisition and sustainment, had said in November last year in a press interview.
LaPlante had said this on his return from Brussels, where he had participated in a meeting of “the Ukraine Defense Contract Group.” There, he “updated ministers and senior defense officials on global efforts aimed at collaboratively solving industrial base and sustainment challenges in support of Ukraine,” according to the US Defense Department.
If anything, developments above underscore the hard reality that the war in Ukraine is going to be a prolonged war, and the support the US and other NATO allies have provided to Ukraine on the battlefields have emaciated their stockpiles so much that there are worries as to whether there are sufficient residual inventories for training and to execute war plans in the case of a conflict in which they themselves are directly involved. So Zelensky’s Plan B suits all.
However, experts have pointed out some challenges inherent in Plan B, two of which are particularly noteworthy:
One, There is the security factor. Physical production lines in Ukraine are vulnerable to Russian attacks that can destroy multi-million-dollar investments in a single strike.
Two, a substantial amount of raw materials and resources are located in or near occupied territories by Russia, which, in turn, could create problems for the supply chain and labor force. The war makes foreign labour non-existent at a time when the Ukrainian labor force, both skilled and ordinary, is under stress.
Considering these, Kateryna Bondar, a former Special Advisor to the Government of Ukraine, has suggested the following interim solutions that can be operationalized quickly:
First, the United States and Europe can set aside a fraction of their aid to create a dedicated investment fund under NATO or EU auspices to kick-start the effort. US and European defense firms would apply for investments from the fund to set up JVs with Ukrainian counterparts. These JVs should be located outside Ukraine—“ideally in a nearby NATO country, to minimize the costs of, and time needed for, transportation to the front lines—would ease many of the security concerns of Western firms. The chances of a Russian strike against a factory on alliance territory would be minimal, as Moscow would rightly worry about triggering NATO’s Article 5 guarantees”.
Second, “by operating in EU jurisdictions and under EU law, the JVs would benefit from robust legal structures, including protections for IP and investor rights. The risk of corruption or political interference would be relatively low”, Bondar argues. By this, she adds, Ukraine will benefit from US and European innovation and supply chains, and it would allow NATO countries to incorporate lessons from Ukraine’s battlefield experience to improve their own capabilities and defense industrial base.
With Russia apparently settling into a long war of attrition, joint ventures between Ukraine’s defense industries and Western companies, as argued by Bondar, seem to be a sound logic.
- Author and veteran journalist Prakash Nanda is Chairman of the Editorial Board – EurAsian Times and has commented on politics, foreign policy, and strategic affairs for nearly three decades. A former National Fellow of the Indian Council for Historical Research and recipient of the Seoul Peace Prize Scholarship, he is also a Distinguished Fellow at the Institute of Peace and Conflict Studies.
- CONTACT: prakash.nanda (at) hotmail.com
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