OPINION: Providing Support to Ukraine Is a Bargain

Last month, on Dec. 11, Mark Rutte sounded the alarm in his first speech  as NATO-chief. Russia, he warned, is preparing for a protracted confrontation with Ukraine and NATO, in order to establish a new autocratic world order in cooperation with China, North Korea and Iran.

“It is time to shift to a wartime mindset. And turbo-charge our defense production and defense spending… If we don’t spend more together now to prevent war, we will pay a much, much, much higher price later to fight it. Not billions, but trillions of euros.”

In a Q&A with the Director of the Carnegie Europe think tank, Rosa Balfour, Rutte also said that Ukraine needs more ammunition and air defenses in order to negotiate from a position of strength.

Rutte did not talk about the specific financial implications of a Ukrainian defeat for the West. This in contrast to the Kiel Institute for the World Economy and the American Enterprise institute. Not coincidentally, two think tanks from nations that provide the most military and humanitarian support to Ukraine. 

According to a recent Kiel Institute policy brief, Europe, with an economy nine times larger, should be able to deter Russia but not without a substantial increase in its defense production and provision of aid to Ukraine. Which is not only essential from a moral but also a financial perspective, the Institute argues.

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A Russian victory in Ukraine would amount to an estimated 10-20 times higher cost for Germany than its current military support - which, incidentally, is still only one-sixth of its contribution to the First Gulf War in 1991, even though that took place considerably further away geographically. 

Should Ukraine come under Moscow’s sphere of influence again, it would require massive defense investment, including a radical increase in Germany’s contributions to NATO and for Baltic security. It is estimated that between 9 and 19 million Ukrainians would seek refuge abroad, of which as many as 4 million would move to Germany which already hosts 1 million Ukrainians. In addition to increased military spending, it will also have to spend significantly more on refugee assistance, housing, healthcare, etc.

The “knock-on” effects of a Ukrainian loss

To repeat what is apparently not yet obvious to everyone:  a Russian success would signal to the world, including China, that military aggression pays off. That would in turn lead to more armed conflicts and destabilization of the world order along with immense costs to and implications for the global economy. 

In addition to Kiel’s analysis in its recent A World out of Balance annual report, the International Rescue Committee (IRC) identified that there is already a record global rise in armed conflict and coups or attempted coups.

The US will also make financial savings through its continued support to Kyiv. The American Enterprise Institute (AEI) argues that the cost of a Russian victory in Ukraine will also be exorbitant for the US in a report to be published in January.

Without US military aid, Ukraine will ultimately not hold out, Russia will conquer Kyiv and open a new 4,000-plus-kilometer border with NATO. AEI estimates that it would require the US to spend an additional $808 billion on defense than currently budgeted for over the next five years. While aid to Ukraine, which is largely spent on arms production in America itself, would cost Washington seven times less than defending Europe against a victorious Russia.  

Elaine McCusker, one of the authors of the AEI report provided a concise breakdown of the estimated additional investments: land forces, navy, air defense, air force, drones, European arms depots, etc.

In contrast to what is claimed globally on the left and right, both the Kiel Institute and the AEI stress that ending military aid to Ukraine will not enable peace talks, but only encourage further Russian aggression. Such aid thus serves not only transatlantic security and is both morally right and legitimate, but also a sensible financial investment.

Ukraine a source of raw material

In short, a bargain. Not least because, as shown in a 2022 report by Canadian geopolitical risk analysis company SecDev, Ukraine is not only the world’s granary but hosts 117 of the world’s 120 most important minerals and metals.

Ukraine has the largest uranium reserves in Europe, the second largest iron ore, titanium and manganese reserves as well as untapped large fields of lithium, graphite and rare earths - natural resources worth an estimated $26 trillion.

This is undoubtedly a major reason which Russia has concealed under multiple pretexts, for its full-scale invasion. Since February 2022, Russia has already plundered billions in Ukrainian raw materials needed to produce essential goods such as aircraft, mobile phones, EV batteries, steel and nuclear power.

Allowing Putin and his friend Xi Jinping to gain control of Ukraine’s resource wealth is not in the strategic interest of the US, according to Washington Post columnist Marc Thiessen. Especially not since Beijing already dominates the world’s rapidly expanding battery market. The US relies heavily on crucial minerals from China which recently flexed its economic muscle, by restricting graphite exports to the US.

In short, the US should continue to arm Ukraine to force Putin into serious negotiations and to ensure a lasting peace through credible deterrence. By assisting Ukraine to exploit its natural riches, to the mutual benefit of Ukraine and the US.

Whether Trump heeds that advice is, of course, highly questionable. But if he did, it would be all the more reason for Europe to step up military aid, secure a place at the negotiating table and speed up Ukraine’s  accession to the EU. But that can only happen once the war is over, martial law is lifted and state institutions are once again independent of the executive. For the EU cannot compromise on the quality of the rule of law. Especially not given the grave institutional decline in Hungary and Slovakia, nations that make a mockery of Europe’s fundamental values and serve as Russia’s Trojan horses disrupting EU unity.     

Nevertheless, the other EU-members should do all they can to ensure that Ukrainian wealth does not end up in the hands of Russians and Chinese, Trump’s business friends, local oligarchs or rich Europeans, but first and foremost benefits the entire Ukrainian population.

The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post.