Why Kyiv should care not only about U.S. assistance. Column by former congressman

Tuesday, 19 March 2024 — , six-time US Congressman (1983-1995)
Photo: AFP/East News

Maintaining political support for billions of dollars in annual aid to Ukraine in the United States and in the European Union will be challenging.

Foreign Aid has never been popular in the United States especially in the heartland. President Truman provided tremendous political leadership to persuade congress to approve the Marshall Plan after World War II.

There was strong political opposition to the Marshall Plan but thanks to Truman's leadership the plan was approved and Europe received the aid it needed to rebuild from the devastation of WWII and resist the spread of Soviet Communism.

Similar leadership will be needed in the U.S. and Europe if Ukraine is to receive the aid it needs to defeat the unprovoked Russian invasion and protect its national independence.

Putin is betting the West will lose interest in Ukraine and terminate aid.

He grossly underestimated the courage and determination of Ukrainians to defend their country. Now all friends of freedom around the world must work together and set aside political differences to prove Putin wrong again.

If the U.S. could fund the Marshall Plan and defend Korea for nearly 75 years we can certainly find the resources with our partners in the EU to help Ukrainians defend their country and protect the freedom of Europe.

The United States is now absorbed in domestic political issues, and the closer it gets to the elections in November 2024, the more complex it is.

I know it is hard for Ukrainians to understand how issues involving immigration and the U.S. border with Mexico are blocking a vote in the House of Representatives on aid to Ukraine.

It is especially frustrating for those of us who strongly favor aid to Ukraine because we believe that if permitted to vote at least 300 house members out of 435 will support the aid package approved by the senate with a large bipartisan vote of 70 out of 100 senators.

Republicans are demanding significant changes in the Biden administration's border and immigration policies as a precondition for approving aid to Ukraine. The senate responded with a compromise bill that contained historic improvements but when former President Trump expressed his opposition to the bill the Republicans withdrew their support.

This is hard to believe and hard to understand but it is clear Trump did not want to see Biden enjoy a political win on immigration before the election. It is not clear where Trump stands on aid to Ukraine but he has boasted that he could end the war in 48 hours. He has offered no details on how he proposes to do this.

The good news is that there are ongoing intense negotiations in the House of Representatives about how to approve future aid to Ukraine now that the Republicans have rejected the compromise immigration bill.

I remain confident that a major aid package for Ukraine will be approved in the next 30-60 days.

I am reminded that Churchill once observed that "Americans will always do the right thing but only after they have tried everything else". It is important for Ukrainians to know that between January 24, 2022 and January 15, 2024 the U.S. has committed $74.3 billion in humanitarian aid, financial assistance and military assistance. ($46.3 billion of the total is security and military assistance)

More good news comes from the European Union.

Since the start of the war, the EU and its member states have made available $96 billion in financial, military, humanitarian, and refugee assistance. In addition, on Feb 1, 2024 European leaders also agreed to commit up to $54 billion to support Ukraine’s recovery, reconstruction and modernization.

This will bring total EU commitments to over $150 billion.

As Ukraine’s partners in the U.S. and the EU debate future aid, officials in Ukraine would be wise to intensely work on increasing their national self sufficiency.

Ukraine has made amazing progress in increasing its domestic weapons and ammunition production. The West must assist this effort in every way possible. In the final analysis Ukrainians will win their battle for national independence from Russia.

The U.S. and the EU must assist with financial assistance and military aid but the battle will be borne and won by courageous freedom fighters in Ukraine. As this struggle continues, efforts to implement budget reforms, reduce financial risks, ensure financial transparency, manage public investments and root out corruption must be accelerated even during this time of national crisis.

These efforts will demonstrate to Ukraines partners in the U.S. and the EU that money being sent to Ukraine is being efficiently managed. All money in Ukraine is fungible today. In other words it all goes into the same budget bucket. So any money wasted or misused is money that Ukraines partners may have to cover.

Stories about waste, fraud or corruption will do more than anything else to undermine U.S. support for Ukraine. Putin’s agents around the world are digging day and night to find such examples and broadcast them to the world.

There is no margin for error in Ukraine.

Some economic observers in Ukraine maintain that "unshadowing" the economy could generate considerable revenues for the government without raising taxes. They contend the customs and trade operations and the tobacco and alcohol markets in Ukraine should be more transparent.

I have become personally aware of some individual lawsuits involving financial institutions that government officials should be aware of and work to settle as soon as possible.

Inconsistent court verdicts over the last few years have prevented a financial institution I am familiar with from collecting tens of millions of dollars in legal loans to borrowers who are capable of repaying their loans.

Net effect is that borrowers have had the benefit of loans for up to ten years without making any interest or principal payments. In one case this has prevented the bank involved from being able to repay the Guaranty Fund that had to spend millions of dollars to protect depositors when the Russian invaders destroyed or stole 35% of the bank’s assets.

I mention these cases because they may involve as much as $50-70 million. If these cases are handled properly the government of Ukraine working through the Guaranty Fund will be able to collect loans that were legally made to ongoing businesses about 10 years ago. If these cases are not handled smart and promptly it could cost the Ukrainian government $50-70 million and unscrupulous borrowers will be the winners because they will not be required to repay their legal loans.

This is the kind of thing that cannot be tolerated in modern day Ukraine.

Supporters of aid to Ukraine in the U.S. Congress care about these matters and will be following the outcome. If these cases are not settled promptly and in a manner that will result in the Guaranty Fund being repaid by the borrowers, from Washington it will look like either incompetence or corruption or both.

These are a few steps that government officials can take to modernize and enhance the credibility of the Ukrainian Government while making Ukraine more self-sufficient and attractive to foreign investors.

Publications in the Expert Opinion section are not editorial articles and solely reflect the author's point of view

 
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