The defense industry is Ukraine’s future. A pillar of security in wartime, it will become a pillar for the restoration of the economy after the war. Minister for Strategic Industries Oleksandr Kamyshin presented his vision at the Days of Ideas online debate organized by the Aspen Institute Kyiv.
"From the paradigm of an agrarian country, we shall move to the paradigm of an arsenal of the free world," the minister argues. He referred to Franklin D. Roosevelt, who called the United States the "Arsenal of Democracy" during World War II.
Kamyshin explained that a dollar in grain export and a dollar in arms export differ in their value for the economy. Agriculture exports are already facing big problems that aren’t likely to go away in the future. Shipping large physical volumes of agricultural products is challenging, while defense industry products have much higher added value.
Before the full-fledged war, Ukraine was among the world’s leaders in agricultural exports. Now we need to contest Russia’s place in arms exports (No. 2), where Ukraine dropped to 17th place last year.
Defense markets are highly promising and profitable, the minister believes.
"Private businesses are already striving in this area, but Ukraine as a state is traditionally the last one to enter challenging markets," Kamyshin noted. As an example, he named the production of drones, in which hundreds of companies are involved but the government still stands aside.
The minister was asked about the response of Ukraine’s partners to such efforts since weapons markets are quite competitive. "We are discussing this strategy with our partners. We can work on the markets where Russia has traditionally had a high standing. These are the target markets for us," Kamyshin answered.
The defense industry is mostly private worldwide. In Ukraine, on the contrary, it had been 80% state-owned until recently. However, private businesses develop faster, and more than half of defense production has to be private in 5 years.
"This is a good opportunity for businessmen to develop in a segment with high added value," the minister said.
He said that three months ago, there was only one manufacturer of a certain military product in Ukraine and two vendors who supplied key components for it. Today, there are already three manufacturers and 14 component vendors. "As a result, we have the best prices, and the manufacturing has become flexible," Kamyshin explained.
"One of my objectives is to dispel the fog of mystery covering the defense sector so that more actors can enter it," the minister summarized.