Private Ukrainian arms manufacturers are facing serious challenges due to the ban on exporting their products, leading to business relocation and a decrease in the share of defense equipment in the country’s overall exports. According to the statement by the Executive Director of the Technological Forces of Ukraine (TFU), Kateryna Mykhalko, this negatively impacts Ukraine’s economic potential and its defense sector.
This is reported by Бізнес • Медіа
Loss of Export Potential and Business Relocation
According to Mykhalko, over 85% of surveyed arms manufacturers have already relocated or plan to do so. Just last year, the volume of unused export potential amounted to 2 billion dollars. This concerns the production of weapons and military equipment that TFU member companies could have manufactured, but this product remained uncontracted by the state. If these foreign currency revenues had reached the state budget, it would have contributed to increased economic stability and growth of resources for the development of the defense industry.
Government Efforts to Enhance Defense Capability
“Due to a lack of funding, Ukrainian defense enterprises are operating at only 60% of their capacity, although this figure was even lower before — 10%. Additional funding could significantly strengthen the defense sector and ensure more effective development of Ukraine’s military industry,” emphasized Volodymyr Zelensky.
The President of Ukraine added that increasing funding for the defense-industrial complex to 100% would help enhance the country’s defense capability and ensure its strategic development.