Ukraine defence faces dilemma after Georgia crisis

By Pavel Polityuk - Analysis

KIEV (Reuters) - Ukraine's defence sector has called for a big rise in funding for the military after Russia's war with Georgia but its reliance on Russian supplies of weapons and parts poses a dilemma.

Ukraine's leaders backed Georgia in the war over breakaway South Ossetia and expressed anger that Russia used ships from its fleet stationed in Ukraine's Crimea region.

Politicians have voiced fears Ukraine could be Russia's next target, although analysts say an imminent invasion is most unlikely.

"Russia's actions have compelled our generals to look at the possibility of using force and this has handed them the argument that we must strengthen the armed forces," military expert Serhiy Zgurets said.

But Ukraine has limited options to overhaul its military. If it meets its aim of joining NATO, Russia is likely to withhold the components it still needs to assemble its weapons. Switching entirely to NATO weapons would be hugely expensive.

Ukraine is among the world's top 10 arms exporters. After the collapse of the Soviet Union it inherited a defence industry producing tanks, planes, anti-aircraft and radar systems and technological backup.

However, it has not been able to afford to buy what it exports. Ukraine's defence budget this year is just 10 billion hryvnias (1.1 billion pounds) or 1 percent of gross domestic product.

"The Ukrainian army buys nothing new. Financing goes only towards feeding soldiers and supporting their battle-worthiness at whatever level," said Serhiy Bondarchuk, head of the state arms export company, Ukrspetsexport.

The 200,000-strong armed forces still use ageing Soviet-designed fighter jets such as the MiG-29 and Su-24 and tanks like the T-62.

"Formally, all our technical resources are obsolete," Zgurets said. "This does not mean that we will not use them."

Artillery cannon, for example, last 15 years but Ukraine has had no new supplies since the Soviet days almost 20 years ago.

Bondarchuk says unless the army receives a minimum of 3 billion to 5 billion hryvnias per year for modernisation and new purchases, soldiers will be coming out "on horses wielding sabres" at military parades.

CONUNDRUM

Defence Minister Yuri Yekhanurov, supported by President Viktor Yushchenko, hopes this year's budget will be amended to add another 5 billion hryvnias to buy new weapons. He wants to triple the defence budget to more than $6 billion in 2009.

According to defence industry publication Jane's Industry Quarterly, Russia's defence budget is $37 billion this year, Britain spends $80 billion, and the United States $700 billion.