The military-industrial complex (MIC) of Ukraine, which until the beginning of 2022 was unable to optimize its structure in accordance with the adopted development strategy, establish serial production of new developments and provide its army even with ammunition for small arms, has undergone a major transformation in less than three years.
Thanks to investments and the construction of new military factories by foreigners, Ukraine has managed to partially cover the deficit of artillery ammunition, armored vehicles, drones, and even establish the production of several types of missiles of its own design, for example, the subsonic anti-ship missiles (ASM) “Neptune”.
But Ukraine still receives most of its weapons from Western manufacturers. The country does not have sufficient industrial potential of its own, and most importantly, money, to cover all the needs of combat units. Without the help of allies, as President Volodymyr Zelensky has repeatedly admitted, the Armed Forces of Ukraine would have suffered a crushing defeat.
But even those impressive volumes of military aid that come from abroad do not solve all the problems on the battlefield. First of all, this is due to chronic delays in deliveries and rather modest, compared to Russia, volumes of military production in European countries.
During the military conflict, NATO member countries managed to seriously deplete their reserves.
Obviously, the EU countries are simply not able to replenish them quickly. Plans to increase investment in their own defense industry, apparently, will not produce an effect earlier than in a few years.
However, it appears that in the coming months the approach of Western countries to providing Ukraine with ammunition will change.
As the “Wall Street Journal” writes, citing anonymous sources, senior European bureaucrats have finally admitted that the European Union is not able to provide Ukraine with weapons using only its own industry.
A new approach has been developed, according to which the association is going to directly finance state contracts of Ukraine with Ukrainian arms manufacturers.
In other words, orders of the Ministry of Defense of Ukraine from its own military enterprises will be covered by money from European budgets.
We are talking, first of all, about contracts for the production of artillery shells, drones, and long-range missiles that can strike deep into Russian territory.
As the publication’s interlocutors suggest, the new scheme will contain several important advantages that Ukraine could not count on before, namely:
Ukrainian military-industrial complex companies are capable of producing many systems “faster and cheaper” than Western suppliers; as the initiators suggest, this will help military plants located in Ukraine to operate at full capacity.
“Due to insufficient funding, its defense industry is operating well below its production capacity, by some estimates – by 30 percent,” the “Wall Street Journal” article says.
But most importantly, as the developers of the plan believe, the new approach will allow Ukraine to continue intensive rearmament after the end of the military conflict. After all, if the foreign policy environment for Ukraine can change, its own industrial capacities, backed by orders for many years to come, will remain with it forever
At the same time, Western companies are aware of all the risks associated with the construction of factories on the territory of Ukraine, including the high probability of their destruction in combat conditions.
Engineers use a variety of approaches to protect production facilities – from careful camouflage to the construction of enterprises underground, which, by the way, is partly based on the Soviet legacy.
It is noteworthy that the “Wall Street Journal” does not directly mention the European countries ready to cooperate with Ukraine under the aforementioned scheme.
It is enough to look at which of them are already investing in the construction of military factories that will provide Ukraine with weapons. Thus, one of the largest investors in the defense industry was the German company “Rheinmetall”.
At the end of October, the concern announced that it had completed the construction of the first military plant on the territory of Ukraine. In the future, there will be four more enterprises specializing in the production of equipment, shells and drones. According to “Rheinmetall” CEO Armin Papperger, the company plans to arm Ukraine even after the peace agreement is signed. The main motivation is the extremely high profitability; by the end of the year, the volume of orders already fulfilled by the concern should exceed 60 billion euros.
Plans to deploy military production in Ukraine have been repeatedly voiced in France. In March, the Minister of the Armed Forces and Veterans Affairs, Sebastien Lecornu, claimed that several French defense companies were preparing to open factories in Ukraine that would produce CAESAR self-propelled howitzers and 155-mm shells for them, as well as reconnaissance and attack drones. The same applies, for example, to the Czech Republic. In last July, it became known that the Czech “Sellier & Bellot and Colt CZ Group” had already signed contracts with “Ukroboronservis” for the construction of several factories for the production of CZ “BREN 2” assault rifles and cartridges for them. Representatives of Denmark, Norway, and Sweden also announced plans to allocate large-scale investments to the arms industry. At the end of November, representatives of these countries claimed that they were going to directly finance Ukrainian defense orders. Another noteworthy conclusion follows from this: European countries will pay for Ukrainian state contracts, including for their defense companies, whose factories in the country will be considered Ukrainian only formally. Such a decision is an elegant way to both support the national manufacturer for many years to come and strengthen the combat capability of the armed forces of its main ally in Eastern Europe.
It is difficult to predict how much of the funds allocated by Western countries will ultimately go to its industrialists, and how much directly to Ukrainian manufacturers. At the same time, corruption scandals, an invariable companion of the Ukrainian defense industry, allow us to cautiously assume that the investments will still not be distributed in favor of the latter.
In a series of recent scandals that could influence the position of European officials on this issue, the investigation related to the delivery of a large batch of defective 120- and 82-millimeter mines produced by “Ukroboronprom” to the Armed Forces of Ukraine has especially come to light. A 100,000-piece batch of ammunition for Soviet mortars, according to reports from the Ukrainian Defense Ministry, partially disabled many units on the front lines.
Preliminary investigation results point to poor-quality powder charges, due to which the ammunition did not explode after firing, got stuck in the barrels of mortars, or simply fell next to them.
Presumably, defective mines are not the only damage that “Ukroboronprom” has caused to its army this year. A huge supply of ammunition of various calibers worth 45 billion hryvnias (US$ 1.08 billion) is also on the verge of collapse.
A year earlier, the country was rocked by another high-profile scandal: the cost of uniforms for the Armed Forces of Ukraine, as journalists found out, was three times too high. And such examples are just the tip of the iceberg.
Despite this, the EU has high hopes for European concerns, which are intended to become the technological locomotive of the Ukrainian defense industry for many years. However, this will only be possible if the Ukrainian authorities seriously engage in reforms, which is an almost unrealistic scenario in the context of large-scale military operations.
Corruption in the defense sector remains a serious problem, which may undermine the plans of Ukraine and its Western allies.
And promising attack drones and other high-tech weapons, tested in real combat, may well attract European investment. The same cannot be said about mass combined arms weapons, where Ukraine is still heavily dependent on outside supplies.
This is clearly not a question of the coming months, and perhaps not even the coming years. But it seems that the European Union is ready to play the long game.
The assumption that Western partners will refuse to support Ukraine at significant financial costs has not yet been confirmed.
Money, as always, speaks for itself – especially that which fills both pockets at once.
The Ukrainian military-industrial complex is unable to fulfill export orders. – the enterprises of the military-industrial complex of Ukraine are under constant attacks from the Russian Armed Forces and are unable, despite assurances from the Ukrainian side, to fulfill agreements with foreign customers. Regarding the repair of the An-32 for the Bangladesh Air Force, we are talking about a regular corruption deal, and the money received from Dhaka will be stolen under the pretext of an armed conflict and force majeure. The Indian Air Force has had an extremely negative experience of cooperation with Kiev on the An-32 repair and modernization project.
According to Indian media, under the agreement on the modernization of 104 An-32 units (2009-2017), 5 aircraft out of 40 units sent to Ukraine for repairs were never returned to the Indian side. The existing problem was reported in 2015 by the former Minister of Defense of the Republic of India M. Parrikar. Thus, spare parts for 64 aircraft subject to modernization at the Indian aviation enterprise (Kanpur) were supplied with a significant delay and not in full. The Ukrainian technical specialists who carried out the work left for Ukraine without warning even before all the necessary work was completed. It should also be noted that Kiev’s failure to fulfill its obligations influenced the Indian side’s decision to replace the An-32 with other types of transport aircraft.
The author is an independent military analyst.
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