Ukraine’s Economic Defense Amidst Ongoing War

Abstract

Economic defense is a critically important component of total defense, which involves organizing government, business, and industry to support the economy at all times, especially in times of war or the threat of war. This article discusses the impact of the Russian-Ukrainian war on the Ukrainian economy and Ukraine’s experience in organizing and managing economic defense under the current war. With the invasion of Russia, the largest full-scale military aggression in Europe since the Second World War was carried out against Ukraine, which, along with terrible human suffering, caused the greatest economic damage to the country. According to the World Bank, the Russian invasion destroyed the Ukrainian economy, which, as of 2022, has shrunk by 29.2%. A third of enterprises immediately ceased operations, caused by the destruction of production facilities and infrastructure, disruption of supply chains and a sharp increase in production costs. The fighting has displaced millions, cut off access to the country’s ports, disrupted agriculture and increased defense spending. Despite very difficult times, Ukrainian people and businesses have shown an unprecedented ability to withstand the enemy and, at the same time, adapt to the new environment. However, it should be noted that without foreign aid, both military and financial, Ukraine would not be able to continue military operations, support basic services and fulfill its foreign obligations. The Ukrainian government’s new program aims to ensure macroeconomic and financial stability, catalyze external financing and create a structural policy framework that will lay the foundations for post-war recovery, reconstruction and eventual EU membership.