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Ukraine Hikes Defense Spending Amid Crimea Crisis, Expands Arms Exports

Mar. 31, 2014 - 01:51PM   |  
By JAROSLAW ADAMOWSKI   |   Comments
Ukraine Foreign Minister Speaks On Ukrainian Crisi
Yatsenyuk: 'Today we are talking about protecting our country. All other expenses are not worth anything if the Ukrainian Army, the Ukrainian Armed Forces are not able to protect the state.' (T.J. Kirkpatrick/Getty Images)
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WARSAW — Ukraine’s government has decided to set aside an additional 6.8 billion hryvnia (US $697 million) for defense spending to mobilize troops, modernize weapons and improve the operational capacities of the country’s armed forces, Ukrainian Prime Minister Arseniy Yatsenyuk said.

With Ukraine’s military power considerably less imposing than that of Russia, the latest move could launch a much-needed string of arms modernization and acquisition programs, local analysts said.

The prime minister said in a statement that the need to boost his country’s defense expenditure is related to Russia’s military intervention in the Crimean peninsula.

“Today we are talking about protecting our country,” Yatsenyuk said.” All other expenses are not worth anything if the Ukrainian Army, the Ukrainian Armed Forces are not able to protect the state.”

Ukrainian Defense Minister Ihor Tenyukh said March 17 that there were an estimated 60,000 Russian troops stationed at Ukraine’s border with Russia and in Crimea.

In 2012, Ukraine had a defense budget of 13.3 billion hryvnia, an increase of 20.7 percent compared with a year earlier, according to figures from the Ukrainian Defense Ministry. The funds for the military will be reallocated from a number of other government programs, including social aid.

Since the collapse of the Soviet Union, Ukraine has underinvested in its armed forces. Between 2006 and 2011, the military was downsized to 144,000 troops , according to the Defense Ministry’s White Book 2011. In 2012, the Ukrainian Land Forces Command was said to operate 735 tanks, 2,155 armored vehicles and 72 combat helicopters. The Air Forces Command had 208 combat aircraft and 39 transport aircraft, and the Naval Forces Command operated 26 combat vessels, eight anti-submarine helicopters, four anti-submarine aircraft, 177 armored vehicles and 41 tanks, the white book said.

In comparison, the Russian Armed Forces operates 1,142 combat aircraft and 481 transport aircraft, according to the global research group IHS. Russia’s helicopter fleet of 1,100 is almost 10 times bigger than Ukraine’s. In addition, the Russian Black Sea Fleet has 40 vessels stationed in the Crimean peninsula.

Moreover, a significant share of Ukraine’s tanks consists of Soviet-built units in need of an overhaul, and it is unclear how many fully operational tanks the country’s military would be able to deploy. And Russia’s plan to spend $650 billion on new arms and military equipment by 2020 is likely to further widen the military power gap between the two countries.

“The data provided by the Ukrainian Ministry of Defense does not reflect [Ukraine’s] actual military capacity,” said a Warsaw-based analyst from a government-run think tank. “The Ukrainian Armed Forces are in desperate need of a modernization, and this could be a one-time opportunity to launch an actual modernization program.”

The analyst said that, in light of the recent developments in Crimea, the priority for the Ukrainian military should be to achieve maximum independence from Russian defense technologies.

An example of such an arms procurement is the contract to supply four patrol boats to the Ukrainian Navy. The deal was placed by the US Navy under the Foreign Military Sales program in February.

The 11-meter and 7-meter aluminum boats will be supplied by Willard Marine. The Ukrainian Navy is to use the craft for visit, board, search and seizure operations, and the contract includes an option for a fifth boat, Willard Marine said in a statement.

Despite Ukraine’s issues with upgrading its military, a report by the Stockholm International Peace Research Institute, “Trends in International Arms Transfers, 2013,” indicates that the country has become the world’s eighth-largest exporter of major conventional arms.

From 2009 to 2013, Ukrainian defense companies held a 3 percent share of international arms exports. China was responsible for as much as 21 percent of their exports, followed by Pakistan with 8 percent and Russia with 7 percent. However, there is evidence that Ukraine’s defense industry is increasingly looking to expand its presence in other prospective markets, such as Southeast Asia and Africa.

In March, Ukraine’s state-run defense giant Ukroboronprom announced that one of its subsidiaries signed a contract to supply five BTR-4 armored personnel carriers to Indonesia’s Navy. If the first batch is positively evaluated by the country’s military, the Indonesian Defense Ministry will order a further 50 armored vehicles, according to the group.

The contract marks another example of the rising tensions between Ukraine and Russia and the ongoing conflict’s spillover effect into various domains. Ukroboronprom emphasized in a statement that its offer was chosen by the Indonesian government over bids by Russian manufacturers.

In Africa, Ukraine’s defense giant received an order for 50 T-64BV-1 main battle tanks to an unnamed country. The contract, signed in February, was reportedly awarded by the Democratic Republic of Congo, according to Russia’s leading news site, lenta.ru.

The African deal is a significant step in the manufacturer’s expansion into the world tank market, said Vadim Fedosov, director of the armored vehicles, artillery, automotive, engineering and special equipment division at Ukroboronprom.

While Ukraine’s arms trade with Europe still does not match its potential, local defense manufacturers are also working toward expanding their presence in the European defense market. Last year, the Croatian Defense Ministry ordered seven Mikoyan MiG-21Bis jet fighters from Ukraine with deliveries scheduled for 2014, while five more aircraft are being upgraded by Ukroboronprom’s subsidiary, Odessa Aircraft Plant.

The Kiev-based group was established in 2010 with the aim of consolidating Ukraine’s fragmented defense industry. Ukroboronprom comprises about 130 companies.

Email: jadamowski@defensenews.com.

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