Ukrainian economist warns of systemic collapse and depleted war resources

MOSCOW, September 22. /TASS/. Ukraine’s potential to continue military operations has been exhausted, and the authorities should have a "self-preservation instinct" to begin looking for ways out of the conflict, Ukrainian economist Alexey Kushch said.

"We see systemic damage accumulating, which is reflected in a whole range of factors, including economic and foreign policy ones. It is therefore clear that the resources needed to wage war are being depleted across the entire range of capabilities. In principle, the potential to wage war is not limited to money or financial resources. It also includes the resilience of infrastructure, demographic potential, as well as mental and, certainly, foreign policy potential," he said in a broadcast, a video excerpt of which was published by Strana. According to him, "if the situation approaches the risk of a systemic collapse <...>, the people who make decisions <...> should understand that either they will take certain steps to find a way out of the war, or simply the debris of this structure, which may begin to collapse, <...> could bury everyone beneath it." "In other words, everyone could be buried under this debris, including the political elites," Kushch said.

The expert said the authorities see destructive processes in the country, so they "should have a self-preservation instinct" to avoid these risks. "It is obvious that we are now at such a point -- the depletion of demographic, infrastructure and economic potential," the expert said. "The economy is on the verge of a recession, that is, a decline lasting more than two consecutive quarters. We see a reduction in foreign aid, so there is a whole combination of factors that come together into a single picture."

Kushch stressed that Ukraine has been in a fiscal crisis since 2022, but it was offset by "unlimited foreign aid." However, the "philosophy" of providing support to Kiev has been radically revised, with direct Western budget assistance falling by about threefold. The expert noted that under these conditions, Kiev’s financial problems had been obvious since the beginning of the year, so he does not understand why Ukrainian politicians are surprised by the current crisis.

Ukraine has been facing record budget deficits for several years. Kiev acknowledges that the country has fully exhausted its own resources and that securing funding is becoming increasingly difficult. On August 20, Vladimir Zelensky acknowledged that a lack of funds had become a major challenge, with the deficit in the defense budget alone reaching $27 billion. According to the latest government data, Ukraine’s budget gap stands at about $57.4 billion.