Ukraine is in worse shape than you think

While Ukraine is flush with weapons and other military supplies and equipment, however, Ministry of Defense officials and volunteer fighters are both quietly admitting that they lack the capacity to absorb so much aid. Much of the equipment and weaponry requires new training to be used. Even when that is available it takes time. Similarly, the influx of 16,000 or more foreign volunteer fighters would seem like a decisive boon, but in fact almost none of them had any military experience or training. They proved little more than extra mouths to feed in most cases, according to Ministry of Defense staff and some of the volunteer foreign special forces soldiers on the ground.

Economically, Ukraine is surviving, but only that. The sanctions on Russia that are expected to cause a less than 7% contraction in GDP compare rather unfavorably to the 45-50% GDP collapse Ukraine is facing. At least 25% of businesses are closed, although the number that have completely stopped has fallen from 32% in March to 17% in May. But a Black Sea blockade of Ukraine’s ports—Mariupol, Odesa, Kherson, and others—by Russia’s navy is preventing both the import of fuels to power the agricultural sector, and also the export of grain and other Ukrainian products. The inability to export is costing Ukraine’s economy $170 million per day. Meanwhile, Russia is targeting Ukrainian fuel storages, grain silos, and agricultural equipment warehouses, damaging already tattered supply chains. The power sector is facing default because so few Ukrainian citizens and companies are able to pay their electricity bills.

Not only is May a critical agricultural month, but it is when Naftogaz usually starts buying natural gas to store it for the cold Ukrainian winter. The state-owned energy giant was already in bad shape before the invasion, with the CEO asking the Ukrainian government for a $4.6 billion bailout in September 2021. Now, with very tight gas markets and no funds, it is unclear how the country can prepare for winter, when temperatures can fall to below 20 Fahrenheit. Adding to the prospect of a tragic 2022-2023 winter, most of Ukraine’s coal mines are in the Donbas, where Russia’s offensive continues.