The Economic Side of Veteran Policy
Former presidential advisor Oleh Ustenko has highlighted the significant economic implications of veteran policy. Drawing on international examples, he noted that the peak financial, psychological, and political burden on a state typically arrives about five years after a war ends. According to his estimates, supporting 1.5 million veterans will cost Ukraine’s budget roughly $15 billion each year—equivalent to 7% of the country’s gross domestic product (GDP).
These veteran-related expenses are substantial. To put it in perspective, spending 7% of GDP on veterans is one and a half times greater than what NATO member countries allocate to their security and defense sectors. Notably, those nations only plan to reach a defense spending level of 5% of GDP by 2037. Ustenko also pointed out that if Ukraine’s economy grew by 10% over two years—compared to the current annual growth rate of 5% discussed by policymakers and experts—the veteran expenditure ratio could drop from 7% to 6% of GDP.
Key Areas of Veteran Policy
Several critical aspects of veteran policy require attention, including:
- medical care for veterans
- healthcare for those disabled in war
- rehabilitation with psychological support
- retraining and acquiring new professions
- prosthetics
- sanatorium and spa treatment
- housing provision
Ustenko emphasized that inclusivity must extend beyond major cities. He also stressed the importance of incentivizing employers to hire veterans and people with disabilities through tax breaks and other benefits.
To cover veteran costs, Ukraine needs strict budget discipline, a thorough review and prioritization of all expenditures, and possible tax system reforms. Ustenko remarked that
“just building a ramp at a crosswalk on Khreshchatyk is nice, but it certainly doesn’t solve everything—because not all veterans, and especially not all people with disabilities, live in cities.”
He further noted that
“sentimental talks with flags, songs, and dances are not enough. People need a material foundation for their present and future lives. They have done so much for the state.”
As Ukraine’s war drags on, veteran policy is becoming increasingly vital—not only for the social well-being of former soldiers but also for the country’s economic stability. The costs of supporting veterans could heavily strain the budget, making it essential to find effective ways to balance these expenses with other socio-economic priorities. Given Ustenko’s call for reforms in this area, veteran policy is emerging as a critical issue for Ukraine’s future, particularly as it plans for post-war recovery.
As Ukraine navigates the complex financial landscape of supporting its veterans, recent developments highlight the government's commitment to addressing housing needs. The recent approval of housing assistance for veterans reflects a proactive approach to improve living conditions, which is crucial given the projected annual costs of $15 billion for veteran support. This step not only underscores the importance of comprehensive veteran policy but also demonstrates the urgency of prioritizing budget allocations in light of the increasing number of veterans requiring assistance.