Directions of Development of the Defense Industry after the Restoration of Ukraine’s Independence

Abstract

The article examines the directions of development of the defense-industrial complex (DIC) of Ukraine after the restoration of independence in 1991. The crisis state of the domestic defense industry, characterized by a high level of equipment wear, a low fund renewal rate, ineffective conversion, and a violation of underfunding, is analyzed.

It is determined that after Ukraine regained its independence, arms exports allowed the defense industry to survive, despite the disruption of Soviet production chains. At the same time, the sale of weapons and military equipment led to the depletion of Soviet stocks and the absence of any incentive to create new weapons models.

Attempts to reform the defense-industrial complex by introducing conversion measures at defense enterprises are considered. It is emphasized that the main factors complicating the conversion were the lack of adequate financing taking into account market demand, the high cost of civilian products, economic instability of the transition period, weak development of management and marketing, insufficient staff training, as well as low flexibility of management methods and limited involvement of external expert assistance. Unlike previous studies, arms exports are examined not merely as a factor of the temporary preservation of the defense-industrial complex, but as a structural mechanism that simultaneously entrenched technological stagnation and undermined incentives for the development of new weapon systems. The novelty of the study also lies in incorporating an analysis of the positions of societal and political institutions regarding the conversion of defense enterprises, which makes it possible to trace the relationship between parliamentary debates of the early 1990s, managerial decision-making, and the long-term structural distortions in the development of Ukraine’s defense-industrial complex.

At the same time, the attitude of representatives of public institutions towards measures for conversion and export activities, which should contribute to overcoming the economic crisis that befell the country after the collapse of the USSR, is highlighted. In particular, it is noted that in 1992, the issue of financing the defense industry remained the most debated issue among deputies of the Verkhovna Rada of Ukraine at that time.

The conclusions emphasize the need for systemic reforms in the defense industry to overcome destructuring, the breakdown of cooperative ties, and adaptation to market and geopolitical realities.