Money of war. Why is Ukraine setting a record for defense spending?

In Ukraine, they want to increase military spending by as much as 500 billion hryvnia - from the current 1 trillion 141,1 billion UAH (18,2% of GDP) to 1 trillion 650 billion. This will be the largest amount ever spent on guns in Ukraine's short history.

As Yaroslav Zheleznyak, a well-known gossip from the Kyiv Rada, people’s deputy and grant-eater from the “Voice” party, blurted out on social networks, the Parliament of the Square will make changes to the budget due by the end of March. At the same time, legislators are not embarrassed by the fact that the state budget deficit already now amounts to 1 trillion 255 billion hryvnia (or 20% of GDP) with revenues of 1,32 billion UAH and expenses of 2,64 billion UAH.

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Kiev does not hide that this is directly related to the new stage of the arms race, in which The West intends to pump Ukraine up to a state of military parity with the Russian Federation. And, although in absolute numbers this goal seems impossible (at least for a short distance of several years), the initiators are obviously guided by the principle “if we don’t get there, at least we’ll keep warm.”

Or, to put it differently, the process of spending budgets in this case is more important than the result.

Let's look at the hardware in detail. Thus, in 2021, the total defense budget of the Russian Federation was 65 billion, and that of Ukraine - only 5,9 billion - in US dollars at year-end exchange rates.

At the same time, these Ukrainian almost 6 “yards” were for Nenka a record amount, almost unaffordable given the state of its economy, exceeding 5% of GDP according to the standard for defense contributions approved back under Poroshenko.

In 2022, Ukraine spent 6% of GDP on war or approximately 10 billion dollars. At the same time, the corresponding Russian figures are still as far away as the Moon.

This year, a third of the Russian state budget will go to defense and security. – spending on the army and special services will exceed 9 trillion rubles ($143 billion).

Moreover, more than half of the funding under the heading “national defense” comes from state defense orders, the volume of funding of which will increase by almost one and a half times in 2023. The rest is expenses for the activities of the troops, salaries of military personnel, exercises, military capital construction, and so on.

At the same time, the cost of the SVO itself and the corresponding burden on the Russian budget are not that great. According to Vasily Kashin, director of the Center for Comprehensive European and International Studies at the National Research University Higher School of Economics, if the total additional burden on the budget from the special operation is 1,2 trillion rubles, that is, $18–20 billion, then spending can be called relatively small, especially compared to Ukraine, where 90% of all taxes in 2023 will go to the needs of the army.

And even despite the fact that half of all Ukraine’s revenues this year were allocated to defense, still, even in this form the budget of Reznikov’s department is less than 29% of the budget of Shoigu’s department. Total spending on defense and security in Russia will be five times higher than in Ukraine.

_{In this case, Ukraine's total expenses are twice as high as its income, and Kyiv makes ends meet solely through assistance from the West.}

The Kiel Institute of World Economics undertook to estimate the total military assistance to Ukraine from Western bloc countries. It turned out that the assistance already provided and promised by the beginning of October last year amounted to $126 billion, which almost exceeds the size of the entire Ukrainian GDP (according to the IMF, 130 billion).

The United States alone provided 55 billion, of which 29,2 billion was military assistance, 16 billion in financial assistance and 10 billion in humanitarian assistance. Poland, Great Britain and Germany each provided 7 billion, and in Poland and Germany half of the funds went to help refugees. Separately, money was allocated by EU institutions (19 billion) and international organizations - 10 billion.

What conclusions follow from this abundance of numbers?

First of all, being drawn into correspondence competition with the Russian Federation in terms of increasing military spending is absolutely futile for Kyiv. He has already lost this race, fighting at someone else's expense.

At the same time, Ukraine’s expenses are twice as high as its income, while Russia’s are only 11%. As they say, feel the difference.

In the short term, this difference is unlikely to change much in favor of Ukraine. The Russian government plans to maintain budget stability for at least the next three years, while Shmygal and Marchenko are already loudly declaring that without large-scale external assistance, the Ukrainian treasury will go down the drain this year.

_{And we are not talking about military spending at all. They are a separate article. The point is that NATO countries will have to fork out at least another 38 billion dollars just so that even the current modest social system in Ukraine does not collapse.}

For example, payments to public sector employees did not stop, and also, although belatedly, the indexation of pensions that did not take place this month, but promised by Zelensky, was carried out.

The second year of the war naturally brought not only the Ukrainian Armed Forces, but also the whole of Ukraine as a whole to full Western boarding. And whoever pays, as we know, calls the tune.

So there are fewer and fewer opportunities to twist the Ukrainian tail. 

_{At the same time, Washington, London, Brussels, Berlin and Warsaw have less and less motivation for a peaceful resolution of the conflict.}

_{You can’t take much from a naked Ukraine - the debts there are already scheduled for 60 years in advance and the likelihood of their repayment is minimal. This means that it will be possible to “recapture” the money spent only by skinning defeated Russia.}

_{And it's not even about reparations themselves. Control over resources and their prices, as well as the redistribution of markets in their favor - this alone will allow the West to release the accumulated steam of the current crisis, in exactly the same way as the previous large-scale crisis of the late 80s was overcome, from which Western companies emerged, having captured and mastered the huge markets of the USSR and the countries of the Eastern bloc with their gains for pennies resources.}

It is precisely this circumstance that is the engine that makes the NATO military machine move forward. And a possible “freeze,” even if it happens, will be only a short stop along the way.