Ukraine Resumes Arms Exports

Ukraine is resuming limited, “controlled” exports of certain types of Ukrainian weapons that are produced in excess of the needs of the Defense Forces, including maritime drones.

This was announced by President of Ukraine Volodymyr Zelensky in his evening address.

“We will cover the deficit in funding for weapons production starting this year, including through the controlled export of some of our weapons. Thanks to such controlled exports, we will increase the production of drones for the front line,” he said.

According to him, Ukraine can produce certain types of weapons in much larger quantities than it can finance the production. And certain types of weapons are already produced in much larger quantities than the actual needs of the Defense Forces. For example, there is a surplus of maritime drones, as well as anti-tank weapons and “some other types.”

According to the President, the first priority will be to meet the needs of brigades at the front, the second will be to replenish Ukrainian arsenals, and only the third priority will be “controlled exports.”

The concept of arms exports – three new export platforms – is to be presented within two weeks.

According to an analytical report by the Technological Forces of Ukraine and the Better Regulation Delivery Office (BRDO), 97% of Ukrainian private arms and military equipment manufacturers expect export restrictions to be lifted.

According to the report, the median capacity utilization of Ukrainian manufacturers is only 55%.

According to Ihor Fedirko, executive director of the Ukrainian Defense Manufacturers Council, the window of opportunity for the Ukrainian defense industry is one more year before the West catches up with Ukrainian developments and creates extremely strong competition for Ukrainian companies.

According to him, despite the interest from outside, the situation for private producers is difficult inside the country. Closed exports, limited domestic financing, regular attacks on defense companies and the liquidation of the Ministry of Strategic Industries, which was a major lobbyist for Ukrainian manufacturers, create uncertainty.

“And we understand that the limited purchasing power within the country, even with all the international aid, is implied by the Danish model and so on. We will close a maximum of 50 percent of our capabilities this year. Our planned defense budget is now 17.5 billion. This is about 50 percent of it.”

In his opinion, the key step to maintaining positions in the international market should be the opening of exports. Otherwise, he warns, Ukrainian companies risk being sidelined when global players, already armed with our experience, fill the market.