Help Ukraine to Arm Itself
When Congress overwhelmingly passed a resolution this week urging President Barack Obama to arm Ukraine with "lethal defensive weapon systems," it was calling on the U.S. to send arms to the world's ninth biggest defense exporter, whose supplies last year helped Nigeria fight Boko Haram insurgents.
So even if Russian-led aggression resumes in eastern Ukraine in the coming weeks or months, the U.S. should help Ukraine do more to provide for itself, before sending weapons that would turn this into a proxy war between nuclear superpowers.
According to recently released data from the Stockholm International Peace Research Institute, which tracks the arms trade, Ukraine accounted for 3 percent of the global market in 2010-2014:
In 2013, Ukroboronprom, the state company that controls most of the country's defense industry, sold $1.79 billion worth of defense goods overseas. Exports fell last year because of the war in Ukraine's eastern regions, but they continued. Although an official sales number for the year has not been released, SIPRI data show what it the war-torn country was selling.
The Ukrainian defense industry's biggest export item was AI-222 jet engines, supplied in quantity to China and a number of other countries. Ukraine also sold and licensed gas turbines for military ships to China and India, a frigate to Equatorial Guinea, missiles for MiG-29 warplanes to Chad, and aircraft to Croatia and Mozambique. These goods wouldn't have been much good in the war on the Russian-backed insurgents, fought with tanks, armored vehicles, artillery systems and small arms, so Ukraine did its best to keep foreign exchange coming.
Yet SIPRI also says Ukraine sold armored recovery vehicles, used to retrieve damaged tanks and armored personnel carriers from the battlefield, to Azerbaijan; armored vehicles and tanks to Thailand and Nigeria; and anti-tank missiles to Kazakhstan and an unknown country, probably in East or North Africa.
Confirming that all this equipment, which Ukraine could have used itself, was actually delivered is difficult because it's a fraught political issue. Some contracts may have been delivered earlier last year, before the war really got started, and others may have involved too small an opportunity cost to be worth paying the penalties that nonfulfillment would trigger. Still, this is all too opaque and needs explaining.
Former Prime Minister Yulia Tymoshenko, now a legislator and a member of Ukraine's ruling coalition, recently demanded an investigation into the exports. "What right do we have to trade in Ukrainian weapons today, when we're asking the whole world to supply these weapons to Ukraine?" she said last week. "On the front lines today, every kind of weapon is invaluable."
Indeed, some of the modernized T-64A tanks meant for export to the Democratic Republic of Congo reportedly were diverted to national guard units fighting in eastern Ukraine. A Nigerian defense blog posted photos last December of newly received BTR-4 armored vehicles, probably from Ukraine (they are mentioned in the SIPRI database, too). The same blog reported in January that scheduled supplies of T-72AW tanks from Ukraine will probably not materialize "due to ongoing civil war."
According to SIPRI data, R-2 anti-tank missiles were delivered to Kazakhstan and the unnamed African client at some point in 2014 -- even though these are the kinds of lethal defensive weapons Ukraine is asking its Western allies to send.
After the winter's intensive fighting, Ukraine clearly faces a shortage of armored vehicles and tanks for the eastern war theater, or it wouldn't have delayed deliveries on export contracts and made a deal to purchase 75 second-hand AT-105 Saxon armored personnel carriers from the U.K. this year.
It also has the capacity to produce versions of most of the equipment it's asking the U.S. to supply, from radars to guided missiles. Ukroboronprom has more than 100 factories outside the war zone, which employ about 60,000 people and added 2,000 jobs in the last two quarters of 2014, thanks to an increase in orders from the Ukrainian military. Some of these are modern, solvent enterprises that exported their products to Russia -- which, between 2009 and 2013, was the third biggest buyer of Ukrainian defense goods after China and Pakistan -- and to dozens of other markets.
The Ukrainian defense industry needs investment and help weaning itself off Russian orders. Most of the factories -- with the exception of about 20 that were left in rebel-held territory -- are not broken down or at a standstill. Given the realities of politics in Washington, this kind of assistance could produce results for the Ukrainian military as quickly as direct weapons supplies would: Ukroboronprom has competitive designs and existing products in every category that's being used in the conflict.
Investing in Ukrainian arms factories would also have more lasting results for the country's development: As one of the biggest global arms exporters in recent years, the country could stage a comeback on the global export market once the war is over.
Last but not least, helping Ukraine arm itself could hardly bring about the kind of angry response from Russia as U.S. arms supplies would: It's less visible and it doesn't involve direct Western participation in the conflict.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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