Monday, December 12, 2022

America's Military Aid to Ukraine - Will It Lead to Unintended Consequences?

Since the military actions began in Ukraine in February 2022, the Biden Administration has made it very clear that it is using Ukraine as a proxy in the existential battle against Vladimir Putin's Russia.  The Administration has made repeated announcements about supplying arms to Ukraine, however, unless American taxpayers are paying attention, they have no real idea about the actual volume of arms.  Fortunately, the United States Department of Defense and the Congressional Research Service have kept track of America's security/military assistance to Ukraine.


Let's start with this Fact Sheet from the U.S. Department of Defense releases which inventories the materiel that has been committed to the fight against Russia remembering that this does not include the materiel which has been sent by NATO partner nations:


In its U.S. Security Assistance to Ukraine report which was updated on December 7, 2022, the Congressional Research Service notes that fiscal year 2022 and 2023 security assistance packages are mainly funded using $28 billion in supplemental appropriations which, thus far, can be broken down as follows:


1.) $14.05 billion to replenish DoD equipment stocks that have been sent to Ukraine by way of presidential drawdown authority


2.) $9.3 billion for DoD's Ukraine Security Assistance Initiative (USAI)


3.) $4.65 billion in Foreign Military Financing for Ukraine and nations impacted by the situation in Ukraine.


Here is a table showing the presidential drawdowns (which allow the president to authorize the immediate transfer of articles and services from U.S. stocks) for Ukraine going back to fiscal 2021 prior to the Russian military actions:



If we go back even further, after the 2014 Maidan uprising and prior to February 24, 2022, the Obama, Trump and Biden Administrations provided Ukraine with:


"...nonlethal security assistance, such as body armor, helmets, vehicles, night and thermal vision devices, heavy engineering equipment, advanced radios, patrol boats, rations, tents, counter-mortar radars, uniforms, medical kits, and other related items. In 2017, the Trump Administration announced U.S. readiness to provide lethal weapons to Ukraine.


According to DOD, USAI packages prior to FY2022 provided sniper rifles, rocket-propelled grenade launchers, counter-artillery radars, Mark VI patrol boats, electronic warfare detection and secure communications, satellite imagery and analysis capability, counter-unmanned aerial systems (UAS), air surveillance systems, night vision devices, and equipment to support military medical treatment and combat evacuation procedures."


Here is a table showing selected U.S. Security Assistance to Ukraine for the period between fiscal 2016 and fiscal 2023:


According to the CRS report, Ukrainian officials have sought to acquire other advanced systems, including fighter aircraft, anti-ship, and additional air defense and anti-missile capabilities, however, the Biden Administration is concerned that this could lead to escalation.  For example, back in June 2022, Washington announced that it would send four of its HIMARS (High Mobility Artillery Rocket System) medium-range rocket system but with a reduced range that will make it difficult for Ukraine to attack Russian territory.  Additional HIMARS were announced as part of a $625 million package in October 2022 as shown here:



And, on the upside for the military-industrial complex, Lockheed Martin, manufacturer of HIMARS, will increase its production of the units from 60 launchers per year to 96 launchers per year to replace those that have been sent to Ukraine since June 2022 as quoted here in the company's third quarter 2022 earnings call:


"About six, seven months ago when we saw what was beginning to happen in Eastern Europe, I went over to visit some of the senior officials in the Pentagon and basically took them to letter and said  we're going to start spending on capacity for a few of these systems, including the ones you just asked about. And now, we've got a lot done already. So for example, on HIMARS specifically, we've already met with our long lead supply chain to plan for increasing production in 96 of these units a year. We advance funded ahead of contract $65 million to shorten the manufacturing lead time.


That was without a contract or any other even memo or whatnot back from the government. We just went ahead and did that because we expected it to happen. So those parts are already being manufactured now. The third thing we did was we've determined where we could open up another modern manufacturing facility to be able to produce the products and got it ready early, and we're cross-training our skilled workforce across a bunch of product lines so as the demand grows and shifts across some of these products over the next few years, we're going to have people that can kind of fungibly move between them."


On December 9th, 2022, the DoD released this information on its latest military assistance:



The greatest concern that the world should have about the massive transfer of arms to Ukraine is that there is no accountability from Ukraine's leadership about where the arms end up, a potential unintended consequence of sending tens of billions of dollars worth of materiel to a nation whose government is barely in control of large parts of the nation and its own forces.  One would think that the United States would have learned its lesson from the insurgency in Iraq where insurgents availed themselves of arms inadvertently supplied by departing forces which were then used to attack American forces and military contractors and in Afghanistan where the U.S. military left behind $7 billion worth of military equipment that is now in the hands of the Taliban....but, apparently not.

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