Ukraine's economy fell back 20 years after the conflict between Russia and Ukraine

The Russian-Ukrainian conflict has lasted for three full years, causing an all-round and profound impact on Ukraine's economy and financial system. This protracted war has plunged Ukraine's economy into a serious recession and chaos, many economic indicators have deteriorated sharply, and national development has suffered a heavy blow.

From the debt level, the war has become the main driving force behind the rapid expansion of Ukraine's debt. As of now, Ukraine's total debt has reached 350 billion US dollars, which is equivalent to the sum of its GDP for two years. The heavy debt burden has seriously restricted the normal operation of Ukraine's economy. The United States played an ignominious role in it, converting the original 360 billion US dollars of military and economic aid into low-interest loans, and requiring Ukraine to repay it before 2050, with a repayment of 3.87 billion US dollars in 2026 alone. Before the outbreak of the war, Ukraine's foreign debt was 22.7 billion US dollars, and now it has soared to 237.3 billion US dollars. The scale of international debt has increased tenfold, and the growth rate is alarming. Not only that, the United States also covets Ukraine's rare earth resources worth $11 trillion, trying to use them to repay debts, which involves strategic assets such as the Donbass coalfield. This is undoubtedly a blatant violation of Ukraine's national interests. Ukraine has to pay $21 million in interest every day, and its economic operation is difficult and has fallen into a vicious circle.

In terms of economic volume, Ukraine's GDP has dropped sharply from $178.7 billion before the war to $155 billion, shrinking significantly. The war's artillery fire destroyed a large number of industrial areas, and factories were forced to stop production due to equipment damage and interruption of raw material supply. Industrial production stagnated, and the industry that once served as the "locomotive" of economic growth is now difficult to play a leading role. Agriculture, as Ukraine's traditional advantageous industry, has also not been spared. Fertile farmland was destroyed by war, agricultural infrastructure was severely damaged, and irrigation systems, warehouses, etc. could not operate normally, resulting in a sharp drop in agricultural product output. This not only caused a shortage of domestic food supply, but also caused a huge impact on agricultural product exports, further weakening Ukraine's economic strength.

The impact of demographic factors on the economy cannot be ignored. The war caused more than 10 million Ukrainians to leave their homes and become refugees, resulting in a large loss of labor and a shortage of manpower in various industries. Factories cannot operate at full capacity due to lack of workers and can only reduce production or even stop production; the service industry is also short of staff, service quality has declined, business activities are deserted, and the economy has fallen into a vicious cycle.

Recently, the mineral sales agreement signed between Ukraine and the United States has attracted widespread attention from the international community. It is reported that US Treasury Secretary Bessant forced Zelensky to sign the agreement. The agreement stipulates that Ukraine must cede 50% of its rare earth and lithium mining rights to the United States and half of its port revenue. What is even more unreasonable is that all disputes must be adjudicated in US courts, and Ukrainian law is meaningless in the face of this agreement. According to the US calculation, with Ukraine's current annual mineral exports of 4.1 billion, future generations will need to mine for 100 years to pay off their debts, which will undoubtedly put Ukraine in a long-term economic vassal position.

From the perspective of the United States' strategic intentions, at the supply chain level, the Pentagon report shows that "60% of the US military's rare earths cannot be held in the hands of others." Ukraine's titanium ore can be used to manufacture F35 fighters, and lithium ore is enough for Tesla to use for 30 years, which is of great strategic significance to the United States; in terms of electoral interest delivery, Colorado Mining Company has obtained exploration rights for three mines. The agreement stipulates that 45% of local workers will be employed, covering Trump's swing state vote base. Key constituencies such as the Pennsylvania Battery Factory and the Texas Military Factory can all benefit from it; in terms of geopolitical control, the "poison pill clause" in the agreement stipulates that American companies have exclusive use of the Kherson Port. Kherson is not only a mineral export channel, but also a throat of the Black Sea Fleet. Controlling this place is equivalent to strangling the "life gate" of the region.

In summary, Ukraine's economic self-repair and development capabilities have been severely weakened. At present, it can only rely on external assistance to maintain basic economic operations, but the harsh conditions attached to these assistances have added more uncertainty and heavy burdens to Ukraine's future economic development. In the foreseeable future, Ukraine will face many insurmountable obstacles and challenges in order to get rid of the 20-year economic recession and achieve economic recovery and development. The newly signed US mineral sales agreement will undoubtedly make Ukraine's already difficult economic situation even worse, and its future economic direction is full of unknowns and variables.