Kiev faces economic collapse if new funding isn’t approved, an aid agency official has warned US lawmakers
USAID assistant administrator Erin McKee testifies in January to a US Senate committee in Washington. © Getty Images/Bill Clark/CQ-Roll Call
The US aid agency overseeing Washington’s humanitarian relief program for Ukraine has warned lawmakers that funding has run out, putting Kiev at risk of economic ruin if more money isn’t allotted amid the former Soviet republic’s conflict with Russia.
“We have no more direct budget support,” Erin McKee, an assistant administrator for the US Agency for International Development (USAID), testified on Wednesday to the Senate Foreign Relations Committee in Washington. “The last tranche was disbursed at the end of the fiscal year. This jeopardizes, particularly over the coming months, Ukraine’s ability to maintain its economic stability while it continues to fight the war. It’s urgent.”
The US government’s latest fiscal year ended on September 30. Ukraine has relied on Washington not only as its biggest provider of weaponry, but also for money to meet its non-military expenses. President Joe Biden has proposed a $106 billion emergency spending bill that combines aid to help Ukraine fight Russia and Israel fight Hamas. It also includes $9.2 billion in humanitarian aid tied to both conflicts.
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McKee said USAID’s help has enabled Ukraine to spend all of its own government revenue on its defense, including soldier salaries. “That means they don’t have any resources to take care of their own people and govern,” she added.
Such outlays as paying teachers, police and health care workers would be suspended without new US funding being approved, McKee said. A prolonged funding disruption would cripple the Ukrainian economy, she claimed, giving Russian President Vladimir Putin the upper hand in the ongoing conflict. “If their economy collapses, Putin will have won.”
Congressional opposition to Biden’s Ukraine policy has grown in recent months. The Republican-controlled House of Representatives passed a $14 billion aid bill for Israel alone last week, leaving new funding for Ukraine to be decided separately. The Democrat-controlled Senate blocked the House bill on Tuesday, demanding that Biden’s bundled aid package be approved instead.
Congress previously approved $113 billion in Ukraine aid in four rounds of legislation. McKee warned that without the approval of a new tranche of funding, Ukraine’s government “would need to use emergency measures, such as printing money or not paying critical salaries, which could lead to hyperinflation and severely damage the war effort.”
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