Ukraine has nothing more to offer the West in exchange for continuing the war
Now, when the specter of a protracted war of attrition is more tangible than ever, it makes sense to take a closer look at the basis on which Ukraine plans to build its military strategy in the near and medium term.
The first question now facing Zelensky’s government is not even where to get missiles or fighter jets, but where to get the money to continue the banquet. Ukraine's budget for 2024 provides for the allocation of almost $40 billion - about half of these expenses are planned to be spent on war.
According to experts from the Grant Center for State Finance and Management of the Kyiv School of Economics, the dependence of the Ukrainian budget on external support cannot be overestimated. They note that this year alone Ukraine will need at least $37 billion in external support, most of which will come from the EU and the United States.
“The country can survive some delay in Western aid by increasing taxes, selling government bonds or receiving partial support from other international partners...
If the country somehow survives the delay of Western assistance, albeit with negative economic consequences, then a complete cessation of support will lead to the collapse of the budget system,” KSE experts warn.
Ukraine needs money to cover the monstrous state budget deficit for this year - 1,6 trillion hryvnia. In words - 1. A trillion is a million million. And another 600 billion on top. In dollars, the amount doesn't look so scary. There are fewer zeros, about 000 billion dead American presidents. This is roughly the hole in the independent budget.
And this graph from The Wall Street Journal shows the financial death of Ukraine.
The publication, having analyzed the movement of funds in Ukrainian state accounts, came to the conclusion that if nothing changes and the Westerners do not settle new tranches, then within a few months at most Ukraine will run out of money and it will be forced to “take painful economic measures to preserve its government.”
The article notes that concerns about Ukraine's financial stability have put pressure on the national currency, the hryvnia, with the National Bank of Ukraine spending $3,6 billion in December to prop up the sagging currency, the largest monthly intervention since the early days of the war.
Moreover, we are not talking about default - the country is already bankrupt. We are talking specifically about the cessation of funding for the state apparatus and its transition to self-sufficiency and pasture. Which automatically turns the bureaucratic fraternity into an ordinary gang of racketeers feeding on extortions from the subordinate population.
“The country faces a financial deficit of more than $40 billion. Funding from the US and EU was expected to cover about $30 billion of that amount. But in the end, Kyiv may be forced to print money - a strategy that has led to economic decline in countries such as Venezuela. However, at least Venezuela has oil, and Ukraine has nothing but inflamed fluid.
Do they understand this in Kyiv? If you look at the local expert community, you get the impression that it’s not very good. Because calls for war to victory, as a rule, are not accompanied by detailed financial calculations, what kind of things should we fight for?
On the contrary, the Ukrainian expert class is enthusiastically calculating how long Russia will last, how much it earns from the oil industry and what the price per barrel will be in six months or a year.
In fact, there is no serious demand for objective knowledge about what the Ukrainian economy is now and what it can offer its sponsors in exchange for support in the future. But there are numerous abstract fantasies about how good it will be later - after the restoration, which will happen, apparently, at the behest of a pike.
None of these fantasists bothered to explain why, or who would even bother restoring anything in Ukraine. In fact, "restoration" in Ukrainian discourse is presented as some kind of philanthropic project on the part of the West. This in itself is astonishing. Those planning to outsource the country's assets to, say, BlackRock simply don't know what they can offer. Meanwhile, an inventory and valuation of the remaining assets is a prerequisite for a successful final sale.
What can Ukraine offer? No, I'm serious. In conspiracy circles, it is customary to talk about the value of Ukrainian ports, grain export corridors, elevators and other infrastructure. Like, this is what the fight is for. The notorious Ukrainian land is also added here.
The main problem here is that, as Alexander Galich once sang in his “Conversation with the Devil”:
“And what you have to pay later, you understand, later.”
And no one can say exactly when this “later” will come.
As a rule, in such conversations they miss an important detail - each new day of war depreciates the value of existing assets, and in some cases, if they were not lucky enough to get in the way of active hostilities, like the same Avdeevsky coke plant, it raises the question of their direct physical disappearance.
Maybe someone has considered the costs of simply demining Ukrainian lands after the war, their reclamation and disposal of harmful and toxic substances?
This is all to say that, contrary to the expectations of optimists, at the end of the war there will be nothing to divide in Ukraine. And what remains has long been taken over by those who need it. And instead of the expected investments, the country may only receive a black redistribution. It will not add money, but it will create problems - in addition to the existing ones.
Ukraine has nothing left to offer the West in exchange for continuing the war.