Ukraine is braced for a Kremlin summer offensive that will make a heavy dent in its weapons stockpile. Cautious that rebuilding those supplies requires sustained interest from its Western backers, Kyiv is opening what one official called its \u201cWild West\u201d arms industry to investors, promising to become the world\u2019s \u201cbreadbasket\u201d for lethal military equipment.<\/p>\n
Over the past three years, Ukraine\u2019s allies in NATO have donated<\/a> around $140 billion of military aid that has helped hold Russia back.<\/p>\n Ukraine is braced for a Kremlin summer offensive that will make a heavy dent in its weapons stockpile. Cautious that rebuilding those supplies requires sustained interest from its Western backers, Kyiv is opening what one official called its \u201cWild West\u201d arms industry to investors, promising to become the world\u2019s \u201cbreadbasket\u201d for lethal military equipment.<\/p>\n Over the past three years, Ukraine\u2019s allies in NATO have donated<\/a> around $140 billion of military aid that has helped hold Russia back.<\/p>\n On top of receiving missile defenses, drones, and more conventional artillery, Ukraine has developed its own impressive arms industry. Much attention<\/a> has been paid to its manufacturing of attack drones\u20142.5 million drones are expected to be produced in 2025.<\/p>\n Since the start of the war, Ukraine has built an arms industry with an output capacity<\/a> of over $35 billion.<\/p>\n However, recent estimates suggest that only around $12 billion, according to Ukrainian officials, worth of orders have been placed, meaning there is a huge amount of excess capacity. Kyiv hopes<\/a> that Western allies will seize this opportunity to invest in Ukraine\u2019s domestic arms industry\u2014and it is making Ukraine\u2019s defense sector as attractive as possible to Western investors.<\/p>\n \u201cOf course, it would be better if they were straight donations, but we also must be realistic,\u201d said Serhii Kuzan, chair of the Ukrainian Security and Cooperation Center. \u201cWe know that making our arms industry as attractive as possible is the best way to keep our Western allies interested and sending money here.\u201d<\/p>\n Kyiv\u2019s pitch to outside investors looks something like this:<\/p>\n Ukraine is still the West\u2019s first line of defense against the Kremlin, effectively fighting a battle on behalf of NATO by keeping Russian forces from progressing farther west into Europe. Ukraine has done an incredibly impressive job, given early estimates <\/a>suggested the country would fall in three days, so it\u2019s in the West\u2019s interest to keep supplying Kyiv with weapons.<\/p>\n Another part of the argument is that it is cheaper and quicker<\/a> to get those weapons to the front line if they are made in the country itself. Producing the weapons in Ukraine is easier as, under its current state of martial law, the nation doesn\u2019t have the bureaucratic, regulatory, or logistical problems in manufacturing and testing weapons that most NATO countries do.<\/p>\n If that\u2019s not incentive enough, Ukraine has become something of a \u201cWild West\u201d for weapons production. Those were the exact words a Ukrainian government official used when I was in Kyiv last month, describing how testing weapons on an actual battlefield against a real enemy drives innovation faster than labs or testing ranges.<\/p>\n \u201cWhat might take you months, even years of developing, testing, and manufacturing in the West will only take weeks here,\u201d said the official, who spoke on the condition of anonymity as they are directly involved in the war effort. \u201cWe are the best test field in the world because mistakes here mean death. We can tell you very quickly how your product does or does not work on the battlefield.\u201d<\/p>\n Western arms companies willing to invest in or work directly with the Ukrainian defense industry will have real competitive advantages in the fast-changing, high-tech world of modern weapon design. They will also be able to say with absolute certainty what works on the battlefield and what doesn\u2019t.<\/p>\n When the war eventually ends, those\u00a0who took advantage of Ukraine\u2019s Wild West approach will find that they have a workforce with real-world battlefield experience. \u201cSmaller European countries that have typically smaller armed forces are necessarily obsessed with the idea of maximum lethality for minimum cost,\u201d said one European defense industry source. \u201cFrom that perspective, it would make sense to make use of these people who know how to make stuff that we know for sure works.\u201d<\/p>\n And the money doesn\u2019t hurt. Europe is braced<\/a> to spend up to $936 billion on rearming itself.<\/p>\n Depleted weapons stockpiles will need to be refilled, and there won\u2019t be many places able to compete with Ukraine when it comes to making piles of gear by people with a track record of making relatively cheap and deadly effective weapons.<\/p>\n Those in joint projects or who have opened factories in Ukraine will be well-placed to secure large orders worth eye-watering sums of money. The German arms giant Rheinmetall<\/a> has already committed to opening factories in Ukraine, while Britain\u2019s biggest defense firm, BAE Systems<\/a>, is one of many that has set up a legal entity in the country.<\/p>\n Placing strategic NATO assets in Ukraine also offers the prospect of providing a level of security without actually admitting the country into the alliance.<\/p>\n \u201cIf you have German engineers or British managers working in Ukrainian factories on joint projects, you create a pretty major deterrent to Russia launching attacks on those areas,\u201d said William Alberque, former NATO director of arms control. \u201cThe more you can stitch Ukraine\u2019s arms industry into the NATO and European defense industry, the more they are involved in decision-making and the greater that deterrent becomes.\u201d<\/p>\n That\u2019s the sales pitch. What\u2019s the downside? Well, Ukraine is a country still at war and there\u2019s no clear end in sight. We don\u2019t know what Ukraine will look like politically in five years\u2019 time. If the war is over, there is no clear indication of what a peace settlement will look like in terms of territory\u2014or what assets Russia might be able to seize. And there is still every chance that Russia will launch another invasion down the line.<\/p>\n There is also the small matter of Ukraine being under martial law, meaning there are export controls on weapons made in the country, as well as no clear timeline on when an investor might be able to export weapons outside of the country for profit or for their own domestic militaries to use. The uncertainty regarding martial law also includes who any intellectual property might belong to, defense industry sources say.<\/p>\n That said, whatever the risk, Ukraine losing this war and Russia becoming emboldened is still by far the worst option for NATO. There are many who believe that even the donations to date have still been given through gritted teeth, to the shame of the West\u2014and that the need for commercial considerations is a stain on the West\u2019s record. As another Ukrainian official said: \u201cWe really are fighting a war on behalf of the West. If we lose, Russia won\u2019t stop at Ukraine. Without your support, we simply cannot compete with the scale of their weapons manufacturers.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Ukraine is braced for a Kremlin summer offensive that will make a heavy dent in its weapons stockpile.…\n","protected":false},"author":2,"featured_media":218383,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7654],"tags":[3647,2000,299,71265,657,24666,771],"class_list":{"0":"post-218382","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ukraine","8":"tag-economics","9":"tag-eu","10":"tag-europe","11":"tag-missile-defense","12":"tag-ukraine","13":"tag-ukraine-russia","14":"tag-war"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114754903582731369","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/218382","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=218382"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/218382\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/218383"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=218382"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=218382"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=218382"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}