Ukraine could earn billions from defence exports this year after authorising its first wartime foreign sales and is considering an export tax to fund its own military needs.
KYIV: Ukraine could export several billion dollars worth of military goods and services this year. A senior official revealed the potential after Kyiv authorised its first foreign wartime sales.
The state commission approved the majority of 40 applications from defence producers for exports. Deputy secretary of the National Security and Defence Council Davyd Aloian confirmed the development in an interview.
Ukraine halted all weapons exports following Russia’s full-scale invasion in February 2022. The country has since heavily relied on arms supplies from international partners for its defence.
READ MORE: Ukraine’s new defence minister vows army reform, innovation
Kyiv simultaneously poured resources into developing its domestic armaments industry. This focus has led to a defence technology boom, particularly in drones and missiles.
“Taking into account ready-made products, spare parts, components, and services that can be provided, it amounts to several billion dollars,” Aloian said regarding this year’s export potential. He added that the overall potential is now “significantly higher” than pre-war levels.
Aloian played down expectations of an immediate export boom for weapons producers. He stressed that Ukraine’s own pressing military needs must remain the absolute top priority.
Russian troops are currently advancing in eastern Ukraine. Airstrikes also continue to hit towns and cities far from the frontline.
Ukraine’s allies have expressed strong interest in obtaining its cutting-edge defence technology. Aloian named Germany, Britain, the US, Nordic countries, three Middle East nations, and at least one Asian country as among the keenest.
One Middle Eastern country with a long history of arms trade with Ukraine is exploring opportunities in drones and heavy vehicles. Aloian declined to name the specific nation involved.
Priority for exports will be given to countries that are Kyiv’s strongest backers in the war. The official stated this is a key consideration for the commission.
Kyiv also aims to prioritise joint ventures and other forms of cooperation with foreign partners. Aloian said attracting financial resources and creating new supply chains is more important than simply exporting finished products.
Defence manufacturers had been pressing Ukraine to resume exports. They argued the country risked losing opportunities on the global arms market, with some already creating overseas subsidiaries.
“There is no desire or goal to lock all manufacturers in here and just keep our own,” Aloian said. “There is an approach, and it is focused on making a system that prioritises the frontline and national interests. And then come commercial interests.”
Ukraine is also considering introducing a tax on defence exports. While no final decision has been made, Aloian believes such a measure could help justify the resumption of sales.
Revenues from an export tax could be spent on Ukraine’s own underfinanced military needs. The official highlighted this potential benefit for the state.
Among the applications approved by the commission, none involve the export of ready-to-use weapons. Aloian clarified this point for Reuters.
The majority of approved applications are aimed at reimporting arms to Ukraine for use on the frontline. Some are related to equipment for the Ukraine-US FrankenSAM program.
The FrankenSAM program develops surface-to-air missile systems by combining Soviet-era systems with Western missiles.
The Sun Malaysia
