Economic value of US aid to Ukraine is two times lower than official estimates, study finds

A study has found that the true value of US military aid to Ukraine is much lower than officially stated. Washington puts this at more than US$60 billion, but the actual amount has been estimated at US$18.3 billion.

Source: a study by Economists for Ukraine

Details: The study says the main reason for the discrepancy is the overvaluation of old US arms stockpiles. The Department of Defense has said the equipment supplied is worth US$31 billion, but the economists estimate its real value at US$12.5 billion. Much of the equipment had been decommissioned and is of limited use in combat, further reducing its value.

About US$20 billion in defence investments were indirect transfers of equipment through allied countries, specifically Poland, but only US$340 million of this has reached Ukraine directly.

Over the three years of the war, the United States has provided Ukraine with US$50.9 billion. Of this, US$32.6 billion was spent on budget support – salaries, pensions, and other expenses reimbursed through World Bank and USAID mechanisms.

Public statements about aid to Ukraine often fail to take into account the difference between appropriations and actual aid provided, Economists for Ukraine noted.

Secondly, a significant portion of the funds is spent on ordering new weapons systems from the US, but deliveries are severely delayed. Of the US$12.1 billion allocated for the procurement of new equipment, the actual value of the aid to Ukraine is estimated at only US$5.5 billion.

In addition, part of the US aid comes in the form of loans and guarantees. For example, the United States used frozen Russian assets as collateral for US$25 billion in loans to Ukraine and Moldova.

A US$156 million loan enabled Ukraine to purchase US-made locomotives, supporting 800 jobs in Pennsylvania.

Overall, the study concludes that the actual value of US military aid to Ukraine is US$18.3 billion, while a further US$32.6 billion was provided in the form of direct budget support, mostly through expense reimbursement mechanisms.

Thus the total value of the aid provided over the three years was US$50.9 billion – an average of about US$17 billion per year. According to the study, this corresponds to just 0.25% of the US federal budget – roughly the amount Washington spends on maintenance and energy for federal buildings.

The authors of the study also emphasised that Ukraine carefully monitors all revenues. Thanks to Ukraine’s eGovernment system, every hryvnia spent – from civil servants' salaries to the purchase of office paper –  can be tracked. Audits have revealed no abuses or anomalies in the use of international aid.

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