Lend-Lease hasn't started working in two years. Do we need it at all?

What is Lend-Lease?

Russia's full-scale invasion of Ukraine has opened the gates to the inferno of the largest armed confrontation in Europe since World War II. It is noteworthy that this is only the second time since 1945 that the United States has used the tool of the Lend-Lease.

After the retreat of Russian troops from the Kyiv, Chernihiv, and Sumy regions in the spring of 2022, it became clear that Ukrainians were capable of resisting a strong aggressor and even defeating it in major battles, such as the confrontation for the capital. However, it was obvious to the Western allies that Ukraine was in dire need of the latest weapons to continue its resistance.

Since February 24, 2022, the United States has become the largest donor of military aid to Ukraine. The US government stepped up its military support at a time when the Ukrainian Armed Forces had almost exhausted their ammunition and were holding the front lines in the east and south of the country with the last of their strength.

For more than two years, the United States has been providing Ukraine with free military assistance under three major programs:

• Ukraine Security Assistance Initiative;
• Presidential Drawdown Authority package (PDA);
• Foreign Military Financing (FMF).

The procedure for providing military support by the United States has not changed much. Sometimes it works with creaks and delays, but eventually, the weapons cross the ocean and reach the Ukrainian coast. Even despite the growing resistance of opponents of aid to Ukraine in Congress.

So what is the Lend-Lease, under which of these items is it hidden? The fact is that it was lost in the shadow of Capitol Hill. Even though it was another effective mechanism of military assistance, giving the US president expanded powers to transfer defense equipment to Ukraine under an expedited procedure.

This mechanism differs significantly from all the others. On the one hand, it is the least bureaucratized procedure for obtaining military assistance in the shortest possible time. On the other hand, Lend-Lease provides for reimbursement by the Ukrainian government of the costs of military support under this procedure.

So why didn't the Lend-Lease work?

Initially, there was a long wait for the Lend-Lease. In the context of a full-scale invasion, it seemed that the United States was taking too long, although we now realize that the pace was still quite good for American lawmakers.

In April 2022, the upper and lower chambers of the U.S. Congress, the Senate and the House of Representatives, supported the Ukraine Democracy Defense Lend-Lease Act. President Biden signed the bill into law on May 9, the day the Victory Day parade was held in Moscow's Red Square.

The symbolism of this gesture of the American leader was that during World War II, the United States provided the Soviet Union, in particular, with the necessary weapons and equipment, without which it would have been impossible to resist Nazi Germany, through the Lend-Lease program. President Franklin D. Roosevelt first signed the Lend-Lease Act 83 years ago, on March 11, 1941. Now, this mechanism has been turned against Russia and in favor of Ukraine, which, as part of the USSR, played a key role in winning the war in 1945.

However, it is not entirely correct to compare these decisions. For the United States, the Lend-Lease during World War II was one of the main tools to help its allies in the anti-Hitler coalition. The modern version of the Lend-Lease rather served as an auxiliary legal safeguard in case of domestic political changes after the by-election to Congress, Oleksandr Kraiev, an expert on American studies at the Ukrainian Prism analytical center for foreign policy and international security, said in a commentary to hromadske.

In 2022, Congress was consistent in its pro-Ukrainian stance, so the US president did not need to use the Lend-Lease mechanism to provide military assistance to Ukraine. When the situation changed, the law on lend-lease had already expired.Oleksandr Kraiev, expert at the Ukrainian Prism analytical center

The Ukraine Democracy Defense Lend-Lease Act was intended to cover the fiscal years 2022 and 2023 in the United States and expired last October. However, the law can still be extended by Congress if it votes to introduce a corresponding amendment to the US defense budget for 2024.

However, we should not count on the extension of the Lend-Lease right now. Recently, the topic of Ukraine has become a real stumbling block in the U.S. parliament. Especially in the House of Representatives, where the position of supporters of US presidential candidate Donald Trump in the Republican Party is gaining ground. They demonstrate a categorical unwillingness to help Ukraine at the expense of American taxpayers.

In a year of presidential elections in the United States, any attempt to extend the Lend-Lease law for Ukraine will be overshadowed by a fierce domestic political struggle. Therefore, we should not expect that Congress will return to this issue in the near future, believes Oleksander Kraiev.

However, while the upcoming presidential election is being discussed in America, diplomatic negotiations on this issue are ongoing. Last October, Ukraine's Ambassador to the United States, Oksana Markarova, spoke about this. She said that she was actively working to convince congressional representatives to extend the term of the Lend-Lease Act. Markarova emphasized that Lend-Lease “is an important backup tool for obtaining weapons in addition to irrevocable programs”.

Why didn't Ukraine take advantage of the Lend-Lease while it was in effect? Ukraine's fault in this situation is minimal. Our representatives should have signed bilateral agreements with the U.S., which would have detailed the amount of military assistance and the specific conditions for its provision. After that, the U.S. government should have made an inventory of the weapons Ukraine needs, estimated their cost, and started deliveries.

However, there was no need for this, as the White House has repeatedly stated that it sees no need to start supplying weapons to Ukraine under this particular program. The United States intends to continue to provide military assistance to Ukraine on a pro bono basis.

According to Roman Bezsmertnyi, a Ukrainian diplomat and PhD in political science, the Ukraine Lend-Lease program was not activated because the US presidential administration does not have a clear strategy for the Russian-Ukrainian war and does not realize the need to launch mass production of weapons. The US defense industry is not ready to significantly increase arms production to replenish the army's military stockpile, due to the lack of government orders.

Washington still did not believe that the Russian-Ukrainian war was an element of the unfolding global conflict and continued to perceive this confrontation as a local conflict with the potential for an even greater narrowing of the geography of hostilities, noted Roman Bezsmertnyi.

Apparently, the White House sees no need for a radical increase in military production and the launch of a Lend-Lease program. Any financial aid is much cheaper than launching weapons production. You can assemble thousands of Ramstein meetings, but if there is no clear strategy and plan, there will be no corresponding production.Roman Bezsmertnyi, historian and politician

Since assistance to Ukraine depends on the American strategic vision of the prospects and consequences of the Russian-Ukrainian war, the future of the Lend-Lease may depend on whether the US government can develop an effective concept of support for our country with clearly defined priorities.

It is noteworthy that the $61 billion Ukraine Security Assistance Act, which Congress passed and President Joe Biden signed into law in late April, explicitly requires the U.S. government to develop such a strategy for long-term support for Ukraine. It requires the Secretary of State and the head of the U.S. Department of Defense to formulate a concept of a strategy to support Ukraine in its fight against Russian aggression, which should happen no later than 45 days after the law comes into force. That is, as early as June 2024.

The strategy to support Ukraine will be submitted for consideration and approval by the Senate and House Appropriations, Armed Services, and Foreign Affairs Committees in June. However, it is not yet clear what the new strategy will look like and whether it will help move the Lend-Lease forward.

Does Ukraine even need a Lend-Lease?

It's worth mentioning how this procedure can work if used skillfully. In the early years of World War II, Lend-Lease became an effective tool that helped the UK and the USSR to stay on their feet at the most critical moment of the war, when Nazi Germany's troops were rapidly advancing deep into the Soviet Union and the UK suffered the most from the naval blockade and massive bombing by German aircraft.

The Lend-Lease program was created to quickly replenish the military stockpiles of US partners and provide them with all the support they needed to defeat Germany and its allies. Lend-Lease provided for the conclusion of long-term agreements between the US government and American defense companies, which then launched mass production of weapons ordered by the state.

At the time, America was not yet a direct participant in World War II and did not take part in the fighting. However, when Adolf Hitler declared war on the United States in December 1941, he mentioned the Lend-Lease as one of the key factors that influenced the German dictator's decision to engage in direct military confrontation with the overseas power.

According to the Lend-Lease Act, from March 1941 to September 1945, the United States provided military assistance to the United Kingdom, the Soviet Union, France, and China in the amount of $50.1 billion, which is equivalent to an astronomical $690 billion today. The United Kingdom and the Soviet Union received the largest amounts of U.S. aid under the Lend-Lease program — $31.4 billion and $11.3 billion, respectively.

During the 4 years of the war, the United States produced and supplied the Allies with millions of artillery shells and ammunition, large quantities of military equipment, clothing, and food, hundreds of thousands of tons of fuel, as well as critical materials and equipment for the defense industry.

The impact of the Lend-Lease on strengthening the USSR's defense capabilities can hardly be overestimated. For example, the main chassis of the famous Katyusha multiple rocket launcher systems, which became a symbol of the victory over Nazi Germany, was a Studebaker US6 truck, which the United States supplied to the USSR on an industrial scale: as part of the Lend-Lease program, the United States sent about 20,000 Studebakers to the Soviet Union. For comparison, the USSR produced only 600 of these vehicles during the entire war. The United States also provided the USSR with more than 664,000 tons of canned meat (8% more than the USSR produced during the entire war), about 127,000 tons of gunpowder, and 7,056 tanks.

After the war, the “Marshal of Victory” Georgy Zhukov admitted that without the American Lend-Lease, the USSR would not have been able to establish tank production and form the reserves necessary to continue the long armed struggle. Secretary General Nikita Khrushchev also recognized the role of American aid, citing Stalin's words. In the postwar period, however, Soviet historiography began to downplay the importance of the Lend-Lease amid difficult negotiations with the United States over aid reimbursement. According to the terms of the Lend-Lease, the provided military equipment had to be returned if it was not destroyed during the fighting.

However, most of the American military equipment provided to the allies under the Lend-Lease program was disabled or lost during the war. Sometimes even intentionally, to avoid paying for it to the Americans. The U.S. government mostly insisted on compensation for the costs of manufacturing and supplying civilian equipment and dual-use goods, such as railroads, power plants, steamships, and trucks, which the Allies received under the Lend-Lease program.

In the 1950s, the US government even reduced the amount of payments to the Soviet Union twice. In the end, the Soviet debt for the aid received under the Lend-Lease was reduced to $800 million, but the USSR was able to pay only about 50 million.

In 1990, during negotiations between U.S. President George H.W. Bush and Soviet President Mikhail Gorbachev, the Soviet debt was restructured, with the final amount of $674 million. Shortly afterward, the Soviet Union disappeared from the world map, having failed to pay the full amount of its debt for the American aid received during World War II.

After the collapse of the USSR, the Lend-Lease debt was reassigned to the Russian Federation, which eventually paid it off in August 2006. In December of the same year, the last payment to the United States was made by the British government, repaying the entire $4.33 billion Lend-Lease debt 61 years after the end of World War II.

Despite many years of disputes over the reimbursement of funds spent by the US government on military assistance to the allies in the anti-Hitler coalition, the Lend-Lease mechanism proved to be surprisingly effective and had a significant impact on the course of the war in Europe. The supply of American military products under the Lend-Lease allowed the UK and the USSR to withstand the attacks of Nazi Germany and to establish the production of their own weapons.

Unfortunately, today the Lend-Lease does not serve Ukraine as it did the Allies during World War II. Today, it has more of a symbolic meaning as a political gesture of solidarity with the victim of aggression. However, according to Oleksandr Kraiev, it is beneficial for Ukraine to have the Lend-Lease as an available fallback option that can be used if opponents of assistance to Ukraine in Congress intend to block the supply of American weapons in the future.

Ukraine needs the Lend-Lease for a scenario where let's say, Joe Biden remains president, but Congress becomes Trumpist and refuses to allocate funds for aid. In this case, the US president could use the Lend-Lease to ensure the continuity of aid to Ukraine.Oleksandr Kraiev, expert at the Ukrainian Prism analytical center

At the same time, the launch of the American “loan aid” flywheel could be a marker of a change in strategy in favor of Ukraine's early victory in the war, as the classic lend-lease mechanism involves a significant increase in the production of weapons and ammunition that the Ukrainian Armed Forces lack to liberate the Russian-occupied territories.