Executive Summary:
Ukrainian President Zelensky’s announcement pushing to legalise private military contractors (PMCs) represents a major policy shift for the Ukrainian government. It is, however, the result of an economic rather than military necessity. Ukraine faces major challenges in reintegrating its returning soldiers into civilian life and rebuilding its economy. Legalising PMCs would serve the dual purpose of easing soldiers’ transition into the civilian economy and generating taxable revenue to fund the Ukrainian state. It also serves as a cheap and effective Ukrainian foreign-policy tool for building relationships through security cooperation with other states. However, legalisation poses the risk of PMCs operating independently and politically destabilising Ukraine due to insufficient oversight and accountability. Ultimately, legalising PMCs, while a major policy shift for Ukraine, is a practical solution to an emerging economic problem rather than the basis for a new model of Ukrainian economic development.
Key Points:
- Zelensky has framed the bill as an explicitly post-war economic policy: “Our export of security, after this war and for veterans, must be a real business opportunity”
- Critics argue that legalising private military companies could create a security risk if oversight remains unclear.
- Ukraine’s Ministry of Defence has proposed a new contract-based military service system with guaranteed rights to demobilisation.
Analysis:
Zelensky’s push to legalise PMCs and reform Ukraine’s military service laws represents a policy aimed at tackling the economic problems facing post-war Ukraine. The proposed guaranteed right to demobilisation brings with it the challenge and expense of reintegrating hundreds of thousands of veterans from Ukraine’s million-strong armed forces into an economy facing extreme stress from 4 years of war and a 53% employment rate. Legalising PMCs in Ukraine would be a sensible short-term solution to the problems of demobilisation, employment, and national income post-war. NATO countries have already hired Ukrainian drone pilots to serve as opposition forces in training exercises, while PMCs in Bulgaria already hire, train, and deploy Ukrainian fighters globally without Kyiv’s sanction. By tapping into global demand for its combat experience and setting up companies that employ veterans and generate taxable income, Ukraine can help bolster its post-war economy. Additionally, legalizing PMC’s can give Ukraine a cheap but effective foreign policy tool to build strong relationships with states outside of Europe through security cooperation and assistance programs.
However the current plan for legalisation lacks a clear framework to regulate and oversee these companies, posing substantial risks to Ukraine’s stability. Yevgeny Prigozhin’s abortive 2023 coup attempt in Russia highlighted the destabilising effect unregulated PMCs could have on a state’s domestic politics. Facing substantial challenges in reintegration and reconstruction post-war, Ukraine cannot afford to create new unregulated armed groups which can challenge the Ukrainian government and exacerbate political and separatist tensions by pursuing their own agendas.
Policy Implications:
In the short term, legalising PMCs in Ukraine would be a potential economic and political boon, enabling the economy to better absorb a glut of demobilising soldiers and generate much-needed tax revenues. While also providing itself with a relatively low-cost foreign policy tool to build security and economic relationships with the broader international community. For the international community, legalisation offers an opportunity to better tap into Ukrainian combat experience and expertise and apply it to their own security problems. However the impact of legalisation in the long term depends on the kind of framework Ukraine constructs to regulate and oversee PMCs. Tight regulation and oversight could enable Kyiv to exert greater control over PMC actions at the cost of customers and flexibility. While a looser framework brings greater flexibility and a broader customer base, it also risks PMC’s potentially becoming independent and destabilising political forces. However, the policy of legalising PMCs and monetising Ukraine’s military experience should only be seen as a bridge policy, a stepping stone on the way to full reintegration and recovery, rather than as the basis for a new form of security-led economic development.
Bibliography:
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