Ukraine’s defense budget up by 28 percent in 2018

Ukraine will allocate Hr 165.3 billion ($6.1 billion) to defense and security in 2018, according to the budget bill passed by the Verkhovna Rada on Dec. 7.

In comparison with 2017, when spending was Hr 129 billion ($4.9 billion), next year’s spending on the army, police and special services in Ukraine is 28 percent higher, and a new record-high amount.

The new defense budget is likely to rise beyond 6 percent of the nation’s nominal gross domestic product (GDP), which is forecast by the National Bank of Ukraine for 2017 to hit Hr 2.7 trillion ($100.1 billion). Meanwhile, the nation’s Defense Doctrine stipulates that a sum equal to at least 5 percent of annual GDP be spent on security and defense, including at least 3 percent on the army.

Next year, Ukraine’s Armed Forces alone will be assigned Hr 86 billion ($3.1 billion), an increase of some 25 percent. Of this, Hr 59.8 billion ($2.2 billion) is to be spent on provisioning and training army personnel, while Hr 16.3 billion ($603 million) is allocated to the purchase, repair and modernization of military hardware and equipment. According to a post on Facebook made by Ukrainian President Petro Poroshenko late on Dec. 7, spending on weapons and military vehicles will grow by 34 percent compared to last year.

Another Hr 2.3 billion ($85 million) will be allocated to medical support for army servicemen. And according to the bill’s explanatory note, more Hr 2.7 billion ($100 million) in confiscated bribe payments is to be used to buy more weapons and equipment for the army in 2018.

However, while the country’s defense spending for 2018 sets a new record amid the ongoing war in the Donbas, the government provided only 60 percent of the amount the Defense Ministry requested. Ukrainian Defense Minister Stepan Poltorak told the Narodna Armiya newspaper on Dec. 5 that the ministry had requested Hr 143 billion ($4.9 billion) in funding for 2018.

“Of course, the state’s capabilities are limited,” Poltorak said. “But I believe we have reserves. Even with such a sum, real improvements in the army are possible – primarily through the efficient use of funds and conducting transparent procurement deals.”

In particular, a considerable amount of funds are to be spent in 2018 on safety measures at the army’s ammunition depots, where some 400,000 tons of munitions are stored, the minister also added. In 2017 alone, two large depots – in Balakliya near Kharkiv and in Kalynivka near Vinnytsia – were badly damaged by massive explosions caused by fires in March and September respectively.

Wages for servicemen are also to rise next year. Today, the average private soldier serving in the Donbas war zone earns about Hr 17,000 ($630) per month, while those deployed elsewhere in the country get upwards from Hr 7,000 ($260), the minister said.

Other Ukrainian national security agencies will also see their budgets increase next year.

Spending on the Interior Ministry is set to increase by 20 percent, to Hr 65.9 billion ($2.4 billion). Some Hr 9.3 billion ($344 million) will be allocated to the State Border Service, while the National Guard and the National Police will get Hr 10.9 billion ($403 million) and Hr 24.4 billion ($902.8 million) respectively.

Financing was also increased for the country’s special services. Ukraine’s SBU security service will be allocated a total of Hr 7.6 billion ($282 million) and the Foreign Intelligence Service will get some Hr 1.7 billion ($63 million).