On Feb. 24, 2022, the Russian Federation started an attempt to annex Ukraine which had achieved its freedom upon the collapse of the Soviet Union in 1991. Though not an official member of the North Atlantic Treaty Organization (NATO), Ukraine’s strategic importance and close military ties to NATO had made the country a de-facto ally, one of the only states in the region to hold such a position.

As such, on May 9, 2022, the United States of America (US) signed into law The Ukraine Defence Lend-Lease Act, which allowed the US government to lend or lease military equipment, technology, and ammunition to Ukraine for self-defence against the on-going invasion.

The act entails the US leasing military equipment, weapons, tanks, and other forms of firepower and lending consumables like rations and ammunition to allies throughout an ongoing conflict. As the name suggests, these weapons have to be returned after the conflict ceases, and all other consumables are converted to loans that are expected to be paid back.

Though not recently, the Lend-Lease Act has been mobilized by the US before during the Second World War, when the US started a similar service to the United Kingdom when it faced a threat of invasion from the Axis powers. This extension of military support appears to posit the global superpower as a morally righteous supporter of its allies within its foreign policy. However, historically, this form of US military support has been more of a double-edged sword, which may end up crippling the Ukrainian economy once and if the invasion ends.

When the act was implemented previously, the wartime US government was aware of the UK’s exhausting financial resources as the war against the Axis powers waged on. As a result, instead of directly selling military equipment to the UK, they allowed it to be loaned for a specific time period in exchange for scheduled payments once the war was over. In case the UK needed to utilize this equipment beyond the scope of the agreement, the same leased equipment would be purchased and the US would convert the value of the military equipment into loans. The interest rate on these loans was kept relatively low at an annual 2 percent.

This created some major problems for the UK economy. In the post-war period, these loans had already reached unaffordable levels for the UK economy, which was still recovering from the vast fallout of the Second World War. With the limited resources available to the government, it had to choose between repairing widespread destruction caused by the war and repaying their loans. Unsurprisingly, it chose the former and as such the interest on the loans continued to accumulate. When the government did start to pay off the loans in the 1950s, the UK’s dwindling foreign currency reserves further drove the value of the pound down.

Not only did many countries who previously held their foreign reserves in British pounds start to convert them to US dollars, due to a lack of trust in the sterling’s strength, but the UK had to print more pounds to pay off its debts. As a result, in this post-war period the sterling fell against the dollar from 4.02 USD dollars to 2.80 USD(see CAB128/10). For the British economy, this effectively increased these loans by 44 percent. We know now that these loans did not permanently cripple the British economy, but they still took over 70 years to pay off. The same cannot be expected in the case of Ukraine.

It is crucial to note the difference between the economic and political conditions of the UK at that time and present-day Ukraine. The UK was a former superpower with a wealthy economy. However, Ukraine remains the poorest country in Europe. Its currency continues to plummet by the day, having dropped 28 percent in the past year alone. Ukraine will eventually face the same issues of repayments that the UK did, except on a much larger scale. The predatory nature of the US Lend-Lease Act is also crucial to understand. The act assumes that the equipment should be returned promptly after the cessation of the war. However, in this case, Ukraine will almost definitely need to retain the equipment to ensure its defense in the post-war period, so as to create a deterrent to further aggression from Russia. Since the leased equipment will then be adjusted in the repayments, the act begins to appear even more harmful in the long-term. If the US does not allow for the conversion of a significant portion of the loans to military aid or to waive them off in their entirety, it is a stark possibility that once Ukraine has staved off the invasion, the loans cripple the economy’s ability to rebuild.

To assume this is the first time the US has adopted similar policies to ensure a state's long-term indebtedness would be naïve and disingenuous. It is just another symptom of the US’s decades old jingoistic approach to world politics. In the last year alone, the US began military financing for the Philippines for what it perceives to be a concerning situation in the South China Sea. Understanding the timing of these loans provides insight of the intentions behind them. The South China Sea conflict has been brewing for the better part of a decade now, and it did not warrant any attention from the US until US-China relations began to decay in recent years. In the 1980’s, it followed a similar policy of military dominance during the USSR’s invasion of Afghanistan. This entailed, at first, knowingly arming a military dictatorship in Pakistan to fight Soviet influence in Afghanistan, then quickly after calling for repayments and the demilitarization of the country. Even though these analogies might not directly resemble the situation in Ukraine, they lay bare the exploitative mechanisms of the American military-industrial complex.

At this point, the hypocrisy of NATO and the US is notable. These stakeholders have claimed that the military assistance was provided in this form due to the urgency of Ukraine’s military needs. They also argue that aid packages are more difficult to pass through the bureaucratic channels of such institutions. However, the reality of the situation remains that this ‘solution’ is to further destabilize a country that it has used as a key strategic ally against Russia since before its independence. This convenient use of Ukraine’s political struggles is also historically grounded as the US has previously capitalized on Ukrainian nationalist movements to conduct covert operations against the Soviet Union during the Cold War.

Though US American citizens, NATO and the EU have praised the US government for its continued military support to Ukraine, the nature of this support is questionable. In this case, a key non-NATO ally warranted unconditional support rather than an assistance that puts its economic future in jeopardy and indebts them to the US for the next hundred years.