The U.S. government should increase funding to Ukraine for the Russia/Ukraine war. Since the beginning of the Russia/Ukraine war early in 2022, the United States has led other partners worldwide in supporting Ukraine in response to Russia’s war against Ukraine.
Throughout the war, the Ukrainian military has demonstrated its mettle. The majority of American observers had predicted that Ukraine couldn't launch an offensive against the Russian military; however, that is exactly what it has done as the war went on. The war is still on, but Russian troops have again been humiliated and Russian President Vladimir Putin is experiencing possible unrest in his own country.
Even though the Ukrainian military has recently managed to contain Russian troops on the battlefield, the country’s economy is in a bad state following seven months of fighting. Therefore, it is now important to ask whether the support Ukraine is getting from the U.S. is adequate.
Particularly, it would be critical for the United States to organize additional extensive economic support for Ukraine on top of providing ammunition which has been the first priority and has really influenced the current shape of the battle.
According to economist Adam Tooze, the Russia/Ukraine war has come with instant, devastating impacts on the economy of Ukraine. Most notably, most of the big cities have been battlegrounds leading to obvious physical damages, and have, to a great extent, interrupted production and trade and in some cities such as Mariupol, it has caused serious devastation. Before the war, some provinces which are now battlefields contributed up to about 30% of Ukraine's GDP and are rich in mineral resources. The overall impact on Ukraine's GDP as a result of the war is that it might drop by a third.
According to a report that was released recently by the World Bank, if the Ukraine emerges victorious from the war, it would cost the country about a quarter-trillion dollars to rebuild the country. However, there are more immediate concerns, more so about its currency, the hryvnia.
Apart from physical destruction, the war led to a great population flight of about 17 percent of Ukrainians. The majority of them are currently working remotely, straining the country’s balance of payments (the difference between cash flow out of the country and cash flow into the country). Paying remote workers hryvnia (Ukraine currency) and then spending it outside the country diminishes the value of the currency, especially against the euro and dollar.
Worth noting, Ukraine has followed a common practice during wars – funding the largest portion of the war budget by getting its central bank to buy government debt through the printing of money, since it is the only available option. The effect of this action is high inflation, estimated at around 24 percent during August. Even though this pressure is also influenced by global inflation, if the war does not end soon, Ukraine might experience real hyperinflation.
The United States has already committed $40 billion to Ukraine's security assistance since January 2021. Thanks to the legislators who looked beyond skepticism and backed the aid. Much of this aid has been in the form of military weapons and equipment (specially made by U.S. defense contractors, worth noting). Only $8.5 billion has been committed toward budgetary support. The budgetary allocation is to help support the Ukrainian government and alleviate the serious budget deficit resulting from Putin's brutal war. The help is greatly welcome, especially being the largest contribution Ukraine has gotten since the war kicked off. However, much is needed, especially humanitarian aid. The leaders from both sides have avoided questioning the funds and rather, the aid has expanded to accommodate both parties’ conflicting priorities, with Democrats holding on to additional humanitarian aid while Republicans insisting on more military assistance.
In August when Ukraine was marking its 31 anniversary, the United States demonstrated its long-term commitment to the country with a package worth $2.98 billion all meant for training and equipping troops for their defense against Russian invasion. The aid helped Ukraine acquire radars, counter-unmanned aerial systems, artillery systems, munitions, and defense systems to enable it to defend itself over the long term.
Additional military aid from the U.S., such as the $600 million that was recently announced by the Biden Administration, is highly welcome. By calling for more funding for humanitarian aid it doesn't mean that the current funding whose largest portion goes towards military aid has not been effective. The funds have been able to help Ukraine to launch a successful counteroffensive reclaiming huge stretches of the embattled nation as well as forcing the Russian military to retreat. The aid has enabled Ukrainian troops to send out Russian forces in parts of the south and east. "The capabilities we are delivering are carefully to make the most difference on the battlefield and strengthen Ukraine's hand at the negotiating table when the time is right," said Secretary of State Antony Blinken in a statement.
There is a need for the U.S. government to increase the amount they are pumping towards helping Ukraine, especially in tackling the humanitarian crisis. It is not just a matter of looking into the conflict itself, but also considering the impact of the war on the population and humanitarian needs. According to a report by the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) that was released on August 24, 2022, there were around 18 million people, or roughly 40% of the country’s population, in dire need of humanitarian aid, and the situation is projected to become even worse during the winter months.
Even as children in the country resume learning, the war has damaged or destroyed 2,400 schools in the country. Additional funding by the U.S. will give hope to thousands of students whose education is in jeopardy.
As humanitarian challenges keep growing, Ukraine is in serious need of funding that will go towards recovery. Since the Ukrainian troops have already been equipped to face their Russian rivals, the focus on humanitarian needs should be increased. If the U.S. increases funding for the country, the country will be able to support families and individuals who are staying in internally displaced people camps. Just like any emergencies and disasters, cash donations are critical, since the money can be directed to the most critical area of need and aid in economic recovery. Therefore, since the U.S. has already done a good job in funding Ukraine in terms of arms and equipment, it is time to focus more on increasing aid in the form of cash because it will go a long way in helping families rebuild their lives, especially in regions where Ukrainian troops have already driven out the Russian forces.
Since nobody knows when the war will come to a complete end, the injection of additional funds is critical. The additional funds will ensure Ukrainian troops keep up with defending their nation and ensure that citizens are able to get a way to continue with their lives in the midst of the war. The U.S. has already done a great job in funding but there is plenty of room to do more.
