War in Ukraine Opens Market for Arms Sales and Food Aid

By Walter Pincus

Pulitzer Prize Winning Journalist Walter Pincus is a contributing senior national security columnist for The Cipher Brief. He spent forty years at The Washington Post, writing on topics that ranged from nuclear weapons to politics. He is the author of Blown to Hell: America's Deadly Betrayal of the Marshall Islanders. Pincus won an Emmy in 1981 and was the recipient of the Arthur Ross Award from the American Academy for Diplomacy in 2010.  He was also a team member for a Pulitzer Prize in 2002 and the George Polk Award in 1978.  

OPINION — The $40 billion Ukraine Supplemental Appropriations Act which has passed the House and is expected to be approved this week by the Senate, contains far more elements than most people realize.

It authorizes the Treasury Department to loan up to $21 billion to trusts run by the International Monetary Fund to help foreign countries reduce reliance on Russian oil and gas and support zero interest loans to the world’s poorest countries faced with rising food insecurity.

The measure also provides $67 million to the Justice Department’s KleptoCapture operation to investigate, seize and sell, forfeited assets of sanctioned Russians, and then use the funds to pay for damages caused by Russia’s invasion. Another $52 million will go to the Treasury Department’s FinCEN group for special agents to trace Russian financial activities and protect Ukraine’s vulnerable financial system.

Some $950 million goes to the Departments of Labor, Health, and Education, plus related agencies, to pay for support of Ukraine refugees who arrive in the U.S., to include covering medical screening, housing, case management and even English language classes.

The State Department gets almost $9 billion for its Economic Support Fund, most of which is to aid the Zelensky government in Kyiv’s immediate operating needs. Another $500 million will go through State to the European Bank for Reconstruction and Development (EBRD) as part of at least $3 billion the ERBD has raised to support infrastructure like electricity, road, and rail transport.

Ukraine has said it needs about $5 billion a month to cover its budget deficit.

A return to the Kyiv U.S. embassy, will cost the State Department another $310 million. A big chunk of that is for upgrading infrastructure to secure the facility. State also gets another $400 million for its International Narcotics Control and Law Enforcement element to investigate and document Russian war crimes and human rights atrocities.

The measure contains $5 billion in global food aid with the bulk going to the U.S. Agency for International Development, to provide disaster assistance shortages caused by Ukraine’s inability to ship grain and agriculture products through the Black Sea because of Russia’s blockade of key ports.

Subscriber+Members have a higher level of access to Cipher Brief Expert Perspectives on Global Issues. Upgrading to Subscriber+ Status now.

The $40 billion Ukraine supplemental was discussed at last Wednesday’s Senate Foreign Relations Committee, where State Department officials spoke of the upcoming threat of a worldwide food shortage, which I will discuss in a moment.

First, I want to focus on what Assistant Secretary of State for Political-Military Affairs Jessica Lewis told the Senators, “Russia’s war against Ukraine presents strategic challenges – but also strategic opportunities.”

By that, she meant having countries that had been buying Russian military equipment switch their purchases to U.S. or other European arms manufacturers.

As Lewis put it, “Depending on our policy choices, we have the opportunity to off-ramp countries from Russian defense materiel to meet the increasing concerns that Allies and partners have in terms of obtaining support (i.e., spare parts, technical assistance) for the Russian weapons systems currently in their inventory.”

As of 2020, Russia was the second-largest arms exporter in the world, although it was far behind the amount sold by United States. Some 90 percent of Moscow’s exports went to 10 countries, the biggest customer being India. Next was China followed by Algeria, Egypt, Vietnam and Kazakhstan, according to the Stockholm International Peace Research Institute.

 “Additionally, off-ramping worldwide dependence on Russian-origin defense production,” Lewis added, “has the added benefit of decreasing Russian influence while increasing our own. We will encourage partners to diversify their equipment inventories away from Russian systems.”

Looking at the situation more broadly, Lewis said, “It is imperative that we provide affordable or subsidized U.S. solutions, not only to off-ramp partners from Russia, but also to ensure that any global military capability gaps that emerge are not filled by People’s Republic of China.”

Lewis also noted that “the poor performance of the Russian military…gives us the opportunity to actually send that message around the world to our partners and allies and friends about Russia’s reliability as a defense partner.”

There is $4 billion in the supplemental for the State Department’s Foreign Military Financing Program, to help support purchases of American military equipment by Ukraine, NATO Eastern flank partners and other partners in the region. In addition, there is $9.05 billion for the Defense Department to replenish the American equipment already sent to Ukraine under drawdown authority.

Today’s constant barrage of information makes it easy for countries to wage disinformation campaigns and your emotions are the weapon of choice.  Learn how disinformation works and how we can fight it in this short video.  This is one link you can feel good about sharing.

To support Ukraine’s military for the coming months, there is $6 billion for the Pentagon, for weapons, training, salaries, equipment, logistics, supplies and services, plus intelligence support.

An unusual fact: When the new Ukraine supplement becomes law, the total U.S. aid to Ukraine will almost equal Russia’s entire military budget for a year.

At last Wednesday’s Senate Foreign Relations Committee hearing, several Senators brought up the world food problem that has begun to appear because tens of millions of tons of wheat, barley, maize and vegetable oil produced by Ukraine, remains trapped in Black Sea ports that Russian ships have effectively blockaded. Back in late February, after the invasion began, Ukraine closed its ports amid the fighting, and the combination of Russian warships and floating mines have prevented reopening them.

Ukraine sells nine percent of the world export wheat market and 14 percent of the export corn market.

At Wednesday’s hearing, Sen. Chris Coons (D-Del.) said, “I’ve concluded that if we can’t reopen the Black Sea ports, it allows Russia to slowly strangle the Ukrainian economy and puts tens of millions at risk.” In response, Assistant Secretary Lewis responded that State was working closely with the United Nations and others and added, “As you know, it’s an incredibly complicated issue in terms of the Black Sea and Russian presence there and other issues around the ports. So, while we don’t have an answer for you at this time, we are working hard with our U.N. colleagues to find a way forward.”

USAID Assistant Administrator Erin McKee divided Ukraine’s grain problem into two parts, “What are we doing to ensure that growth and production continues safely; and then there’s the issue of how we get it out.”

McKee illustrated one wartime effect saying, “In those areas where the Ukrainians have retaken land, we have to go in with our colleagues and de-mine that farming space, so that they can actually plant safely.”

Karen E. Donfried, Assistant Secretary of State for European and Eurasian Affairs told the Senators that the grain situation was scheduled to be the focus of Secretary of State Antony Blinken’s meetings this week at the United Nations Security Council, where the U.S. is currently serving in the presidential role.  

Blinken will “spotlight the issue,” Donfried said. “We need to make clear to the world who is responsible for this, and it is Vladimir Putin and his unprovoked war that he has started in Ukraine.”

At a news conference on Saturday in Weissenhaus, Germany, after a G-7 meeting of foreign ministers, German Foreign Minister Annalena Baerbock said, “Russia has now expanded the war against Ukraine to many states as a war of grain. It is not collateral damage.  It is an instrument in a hybrid war that is intended to weaken cohesion against Russia’s war.”

Ukrainian Foreign Minister Dmytro Kuleba, who attended the meeting, said Kyiv was prepared to talk to the Russians about ways to ship the 28 million tons of grain stuck in Ukrainian ports, but so far had received “no positive feedback” from Moscow.

Let’s see if the Blinken effort is more successful.

Read more expert-driven national security insights, perspective and analysis in The Cipher Brief because National Security is Everyone’s Business.

Related Articles