Ukraine’s strong economy is a great asset, but the US mineral deal shows how fragile it could be | Luke Cooper
www.theguardian.com
Wed, 07 May 2025 07:00:04 +0300
Kyiv still relies heavily on foreign support for its war effort, and it has agreed to difficult terms to keep the US on sideDespite Russias occupation of its territory, missile attacks on its infrastructure and the enormous human costs of the war, Ukraines economy has been impressively resilient.
Its effective military resistance against a much stronger adversary is in fact underpinned by this successful economic management.
Rather than face institutional sclerosis or even collapse, Ukraines state capacity has been strengthened by the conflict.
Through a combination of tax revenue collection and substantial networks of voluntary fundraising, the state has dramatically increased the size of its armed forces, invested in defence production and maintained a decent level of public infrastructure.State spending on soldiers wages, infrastructure and logistics including public sector procurement from private firms has had a positive knockon effect, supporting demand in the civilian market economy.
Soldiers on the frontline earn well above the national average wage.
An innovative military industrial complex, combining traditional stateowned enterprises with an ecosystem of drone startups, has been developed.
These policies have stabilised the Ukrainian economy and directed it to the goal of the countrys basic survival.Luke Cooper is an associate professorial research fellow in international relations at LSE Ideas, the inhouse foreign policy thinktank of the London School of Economics and Political Science, and the director of PeaceReps Ukraine programme Continue reading...
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