The Best Defense Is Good Governance

Even though it's the most important part of the Ukrainian government—consuming half the state budget in its vital management of national mobilization—the defense and security sector is almost entirely neglected by Kyiv’s international partners, who support reforms in essentially every other sector of Ukrainian governance. 

Ukrainians recognize this priority and are working on it without Western assistance. 

• Civil society experts are conducting oversight of the Ministry of Defense (MOD) and building digital tools to support national security governance. But they're having to do this work in their spare time on nights and weekends out of patriotic duty, because most donors have not yet found a way to fund their projects. 
• The reputable reformer who now leads the MOD's defense procurement agency is being smeared and doxed on Telegram and other channels by the illicit intermediaries she's cutting out of the arms market. But except for one successful pilot grant from Denmark, the allies are neglecting to stand by this this well-run procurement agency by funding some of its contracts for purchasing weapons. 
• Economic aid from the IMF, EU, USAID, and other donors is tied to conditionality in most Ukrainian ministries. But not in defense and security. 

The G7 has a unique opportunity to right this wrong through deliberate distribution of the $50 billion in loans to Ukraine from interest on frozen Russian assets. The $50 billion—which will be spent partly on military needs and partly on economic assistance—can fill the gap in foreign aid supporting Ukrainian defense and security governance reforms in three ways: 

• Assistance: Fund a five-year, $100 million technical assistance and civil society support program targeted exclusively at defense and security reforms. 
• Procurement: Direct some military spending to the MOD's two well-led procurement agencies. 
• Conditionality: Leverage economic aid to advance defense and security reforms. 

Joe Biden’s legacy will turn on whether he leaves Ukraine with the internal capacity to march forward on its own feet as a well-governed democracy pursuing victory over Russia. An essential capstone of that policy program would be setting up the Ukrainian defense and security sector for governance reforms that will foster greater resilience in the years ahead. That could also hand off to the EU and G7 a sophisticated and ongoing Ukraine support project that will remain essential going forward. And it could be done with Russia’s money. But the decisions to pursue this path must be taken immediately so that the aid structures can be established within the next few months. 

This report sketches out this policy proposal and recommends why and how the US government, the European Commission, and the G7 sherpas and ambassadors should agree to do this and select institutions to task.