Since the US government’s temporary funding bill does not include new aid to Ukraine, the Ukrainian government is facing major economic difficulties as the Russian war continues.
The Wall Street Journal said that cutting off US funding threatens economic stability in Ukraine, as the US pays government bills and public sector salaries in addition to arms supplies.
Ukrainian and American government officials said that the US funding system for Ukrainian salaries and Kyiv government expenditures is expected to run out in the next month absent a fresh infusion of money from Congress, according to the US newspaper.
The US government avoided a federal shutdown after Congress agreed, last Saturday, to pass federal funding, which provides funding for the US government until Nov.17, but does not include new aid to Ukraine.
“US Secretary of State Antony Blinken warned Senate Minority Leader Mitch McConnell on Sept. 24 that Ukraine would face a severe economic and political shock in the middle of the counteroffensive this fall if Congress cut off assistance to Kyiv,” the Wall Street Journal said, adding that the telephone call from Blinken was a plea for GOP lawmakers to include Ukraine funding in stopgap measures to keep the US government open.
It explained that the US and other donor nations pay the salaries of 150,000 civil servants in Ukraine and more than half a million teachers, professors and school workers, in addition to government expenses ranging from health care to housing subsidies.
Officials in Washington and Kyiv are now looking at what the drop in aid means for the countrys ability to keep its government running and its economy afloat.
The Washington debate over economic aid to Ukraine caused a division in Congress, with some Republicans saying US funds should support the American economy.
Former ambassador to Ukraine and current vice president at the congressionally funded US Institute of Peace Bill Taylor said, “I dont see alternatives U.S. funding is crucial for Ukraines survival.” The newspaper noted that the economic picture isnt rosy, since Ukraine lost an estimated 30 percent of its gross domestic product due to the 2022 invasion, with tax revenue falling as military expenditures rise.
Since the beginning of the war, most lawmakers and members of the public have focused on the hardware, including tanks, helicopters, advanced missile systems and millions of rounds of ammunition, all of which the US is uniquely positioned to provide, according to the newspaper.
Kiel Institute for the World Economy, a German research institute, pointed out that the World Banks “Peace” program formally known as Public Expenditures for Administrative Capacity Endurance has sent Ukraine $23.4 billion, with $20.2 billion funded by the US and $2 billion from the UK. Overall US aid to Ukraine since Russias military operations including humanitarian and military aid totals $72.8 billion.
However, Republicans who oppose all funding for Ukraine see federal dollars going to a foreign government as a symbol of not putting domestic priorities first.
Georgia Republican Rep. Marjorie Taylor Greene said on X, “were paying for just about everything” in Ukraine.
A Ukrainian official said that Ukraines finance ministry was expecting potential funding delays because of the US shutdown fight and has resources to deal with October budget needs, but beyond November the government could face decisions about what services or salaries to cut, or whether to attempt to borrow.
The officials added that ending the payments to Ukraines government could raise discontent in the country and potentially put political pressure on President Volodymyr Zelensky.
The US Agency for International Development will process an October funds transfer of $1.15 billion through the World Bank program, assuming Ukraine shows that it has appropriately spent the previous transfer, but future disbursements are unclear.
Another Ukrainian official said that after October, the Ukrainian government could use other funds earlier than planned to deal with November and December, but without fresh funding the picture turns darker in 2024.
The European Union is an even bigger donor than the US for civilian aid, and major economies such as Japan could step up if US aid disappears, officials said. However, the newspaper noted that American financial and military assistance which the EU cant match is seen as a barometer of the Wests ability to continue supporting the war.
Source: Qatar News Agency