GP Short Notes

GP Short Notes # 633, 1 May 2022

US and Ukraine: Biden's 33 billion assistance package aims at a long term relationship
Ashwin Immanuel Dhanabalan

What happened? 
On 28 April, US president Joe Biden proposed a USD 33 billion package of assistance to Ukraine. The package would be inclusive of the military (USD 20 billion), economic (USD 8.5 billion) and humanitarian aid (USD 3 billion) to the country. Biden further insisted that they were not trying to attack Russia by proposing this enormous package. He added: "We are helping Ukraine defend itself against Russian aggression." However, the package has to be approved by Congress, with Biden proposing to sell the assets of the Russian oligarchs and donate the proceeds to lead reconstruction efforts in Ukraine.  

On the same day, the US House of Representatives approved legislation, making it easier for the country to export military equipment to Ukraine. The House passed the "Ukraine Democracy Defence Lend-Lease Act of 2022" with unanimous support, similar to the "Lend-Lease Act" during World War Two. Democratic Representative Mary Gay Scanlon said: "Today the Ukrainian people are standing on the front lines in the fight for democracy and against tyranny, and the US needs to provide them with every possible measure of humanitarian and military aid."

Also, on 28 April, Ukraine's president Volodymyr Zelenskyy claimed that the total damages of war inflicted upon Ukraine totalled USD 600 billion. Furthermore, damages to the infrastructure resulting from the war itself have reached USD 90 billion and most of the damage inflicted was on railways, roadways and bridge infrastructure. 

On the same day, Russia's president Vladimir Putin warned against any foreign intervention in Ukraine. Putin added: "If someone from the outside tries to intervene in Ukraine and create strategic threats for Russia, our response will be lightning fast." BBC's analysts suggest that Putin made such threats to deter the allies from increasing their support to Ukraine and deter them from intervening more in the conflict. Russia's foreign ministry spokesperson said Western military support for Ukraine also threatened the continent's security. 

What is the background?
First, decrypting US support. The US has consistently continued as Ukraine's most prominent supporter by approving and implementing its USD 13.6 billion aid package to Kyiv in March. The US administration has spent nearly USD four billion in military aid, USD one billion in financial assistance and USD five billion in humanitarian assistance to the country. The recent proposal majorly supports Ukraine's military assistance as out of the USD 33 billion, USD 20 billion is allocated for military aid. 

Second, reviving the lend-lease act. The Senate approved the lend-lease act on 6 April and passed it in the House of Representatives. The program was initially created to be a game-changer in the Second world war as it allowed the US to resupply its allies without a bureaucratic hurdle. The war in Ukraine also exposed bureaucratic hurdles, slowing down US support,  as Zelensky has constantly sent out appeals, urging the US to react swiftly in the crisis. This also comes as Zelenskyy mentioned how Ukraine would need about USD seven billion a month to keep its economy afloat. Biden's proposal to Ukraine assures a longer-term commitment as the last lend-lease program ended decades after world war two. In addition, the program would boost the morale of the Ukrainians as they continued defending against the Russian forces. 

Third, Putin's immediate response. Putin's warning resonates with the possible use of ballistic missiles and nuclear arms to deter  Western intervention in Ukraine. Biden is concerned about a nuclear confrontation as Russia's foreign minister Sergei Lavrov warned of a severe risk of nuclear war over Ukraine. In addition, Russia recently tested its next-generation intercontinental ballistic missile (ICBM) Sarmat, which has a range of 18,000 kilometres and can overcome modern missile defence systems. Biden added how Putin's remarks on using nuclear weapons should not be taken lightly as this could possibly lead to a spillover of the conflict.

What does it mean? 
First, a renewed commitment to support Ukraine. Biden's proposal of the USD 33 billion aid package and the House of Representatives reviving the lend-lease programme reaffirmed the US support to Ukraine. With the latest package, the US would authorise a total of USD 47 billion in Ukraine since the war began on 24 February. This is twice as much as the US had extended to Afghanistan, which indicates the US is here to stay in Ukraine.  

Second, a stronger transatlantic partnership. The previous lend-lease program with the UK started in 1941 and ended only in 2006. Thus, with the US extending such facilities to Ukraine, one could see a more extended period of the US presence in Ukraine and the European continent. Moreover, this commitment would add to the beginning of a longer-term relationship between the US and Ukraine, just as it did with the UK in World War-II.

Third, the possible spillover of the conflict. With the US allocating USD 20 billion for military aid and Russia testing its new ICBMs, a possible direct confrontation between the two has significantly increased. As a result, the threat of the war spilling over from Eastern Europe is imminent.