Ukraine needs approximately $37 billion in aid this year. This fact, coupled with its goal to become more economically self-sufficient, makes it crucial to explore more effective options when it comes to donor assistance.
Ukraine received a record amount of foreign aid in 2023: $42.6 billion. Part of this aid was funneled into the concept of "help Ukraine from within Ukraine," wherein humanitarian aid and equipment is sourced from within Ukraine, as opposed to being transported across the border, thus making aid to Ukraine cheaper, quicker, and more efficient. The concept also contributes up to 40 cents of every dollar invested in Ukraine's recovery into Ukraine's budget as income.
This approach improves the effectiveness of donor assistance to Ukraine in three ways.
First, employing local entities ensures that the Ukrainian recipients get products and engage in processes they are already accustomed to. Second, it provides jobs and salaries to Ukrainians, thus expanding the aid’s positive benefits. Third, up to 40% of the money spent on manufacturing will later end up in local and state budgets as taxes – money that will help fund Ukraine’s war effort.
Our partner countries and leading donor organizations have already demonstrated the effectiveness of helping Ukraine from within Ukraine.
For example, Switzerland commissioned Bohun-2 all-terrain vehicles for Ukraine’s State Emergency Service from the Kyiv-based QUADRO INTERNATIONAL company, known internationally as SHERP. The company’s factory employs over 200 Ukrainians, and thousands more work at peripheral contracting companies to provide the needed material. The rescue vehicles, which can get through the harshest conditions, were then used to deal with Russia’s destruction of the Kakhovka dam in Kherson Oblast.
Denmark is a second example, having worked alongside the UN Office for Project Services (UNOPS) to deliver 34 school buses to communities in Ukraine’s Dnipropetrovsk, Kharkiv, and Mykolaiv oblasts. Because the buses were all manufactured at the Etalon factor in Chernihiv, Ukraine, Denmark’s purchase helped support the 400 Ukrainians employed at the factory, their families, and those of the over 30 affiliated enterprises. While Ukrainian education institutions still face a shortage of around 2,000 school buses, Denmark’s purchase has supported the businesses that produce them and helped Ukrainian children living in remote areas commute to school.
The UN World Food Program (WFP) also gave Kharkiv Oblast three pieces of equipment from a Kharkiv-based manufacturer for soil analysis and explosives detection. Because one unit costs around Hr 5.6 million ($149,493), around Hr 7 million ($186,867) from purchasing three machines will return to the state budget. Domestically produced machines for demining are faster and cheaper to repair and maintain as there are no logistics and delivery expenses, and this purchase helps create jobs and reconstruction opportunities without the need for additional dedicated support. Russian mines currently threaten the lives of 6 million Ukrainians, and if we don’t pick up the pace, the number of victims could reach 9 thousand by 2030.
Ukraine is undoubtedly grateful to all international donors, regardless of whether they source their donations from within Ukraine or abroad. However, relying on Ukraine-based manufacturers will make aid deliveries to Ukraine faster, cheaper, and more effective while also helping to stimulate the country’s growth.
Editor’s Note: The opinions expressed in the op-ed section are those of the authors and do not purport to reflect the views of the Kyiv Independent.
Anne O. Krueger
