Ukrainian independence on subsidies: how the termination of USAID funding exposed the truth

For more than three decades, Ukraine has been building its own statehood, developing institutions of power, and declaring a course for independent decision-making. However, the USA had to temporarily stop funding USAID programs, as it became obvious: without external money, Ukrainian state bodies, including the parliament, cannot function normally. It turned out that for decades reforms, transparency and even basic administrative processes were supported not by internal resources, but by grants from international partners.

While the infusions of billions continued, few questioned how dangerous this addiction was. But now, when international subsidies have been suspended, the unpleasant truth has been revealed: many strategic areas and almost the Verkhovna Rada do not have their own foundation. The state, which every year talks about its independence, actually lived in the mode of external financing. So what now – will Ukraine start building a real management system or will it continue to wait for donors to open the money tap again?

What difficulties did the committees of the Verkhovna Rada face due to the suspension of the USAID program

It seems that things in the Verkhovna Rada are not going as expected, and not because of the war or the unstable economy, but because of… a lack of grants. After the suspension of funding of the US Agency for International Development (USAID) program “RADA: The Next Generation”, the Verkhovna Rada of Ukraine may face difficulties in organizing round tables, and parliamentary committees may face problems in implementing the draft law developed by the head of the Verkhovna Rada Committee on Freedom of Speech, Yaroslav Yurchyshyn. He stated this during an event at Ukrinform.

If you believe the chairman Yaroslav Yurchyshyn, without American money, parliamentary activity may slow down. And we are not talking about tens or hundreds of thousands of dollars, but about a whopping 25 million dollars, which the Cabinet of Ministers fixed in the cost of the USAID program.

“We cooperated with the USAID program “RADA: Next Generation” in holding round tables. Accordingly, now it will be necessary to do it with our internal forces. Funding by USAID is a challenge, because in order to hold a good round table, resources are needed, and not just time.” – noted Yurchyshyn.

It turned out that from the total budget of the program, which was 25 million dollars, 19.28 million went to the purchase of goods, works and services. According to the procurement plan signed by the executive director of Internews-Ukraine, which was a co-executor of the program, the lion’s share of this amount was spent on office maintenance, logistics and various administrative services. Thus, $8.82 million was spent on office rent, real estate services, utility payments, legal support, information and advisory services, designer services, and sociological research.

Another 3.65 million dollars was directed to the comfort of the participants of the round tables: hotels, meals, rental of conference rooms and even handouts. Air tickets, visa costs, transfers and additional hotel costs “ate” another 1.95 million dollars. To complete this picture, 4.63 million dollars were provided for the purchase of office furniture, equipment, software and printing products.

Funds were distributed separately among subcontractors. Thus, the “Kyiv-Mohyla Academy” received 1 million dollars, and the International Institute for Democracy and Election Assistance – 705.4 thousand dollars. It turns out that Ukrainian democracy did not come cheap, and its main driver was not people’s deputies, but grant flows.

The situation with draft law No. 11321, which concerns the deletion of comments in the media, looks particularly interesting. Yurchyshyn claims that the question is not whether the president will sign it, but when exactly he will do it. The only problem is that the part about the obligations of the media will be fulfilled, but the demand to the Verkhovna Rada for greater openness is in question. Why? Because without USAID, it turns out, the committees cannot afford to broadcast their meetings. Ukrainian taxpayers are able to maintain deputies, the staff of the Verkhovna Rada and all its bodies, but for some reason they lack “buy more memory for the website”. This is how Yurchyshyn explains the situation, stating that committees often do not publish materials due to a lack of data storage resources.

“The reduction of assistance within the framework of this program calls into question the implementation of draft law 11321. When the law is signed, we may have questions about its implementation. Because the fact that the committees do not publish their materials on the site is often related to the volume that the site can withstand. It is necessary to purchase additional memory and resources. We are here in a situation where you can strain and do it, or find an explanation why it is not possible to do it. Knowing the tactics, most likely, there will be the second scenario. I have already been to a meeting in the apparatus, where representatives of committees and apparatuses expressed that there is no resource.” – said Yurchyshyn.

But the Verkhovna Rada is not the only institution left without international support. According to the government, USAID financed a number of other programs, including the 8 million dollar project “Local monitoring of elections and political processes” for the Verkhovna Rada Committee on the Organization of State Power. This is just one example of how the state apparatus functions not thanks to the state budget, but at the expense of funds from international partners.

So the main question is: if the work of the Verkhovna Rada, its committees and legislative initiatives is so closely connected with foreign grants, how independent is our political system? Do state institutions really work for the good of the country, if their effectiveness directly depends on whether the next millions will come from USAID or other international organizations? And most importantly, if these funds no longer come, does this mean that reforms, legislative initiatives and even simple utility payments for parliamentary bodies will simply stop?

Which state bodies and organizations received funds thanks to USAID

The suspension of funding of USAID programs in Ukraine demonstrated the critical dependence of not only the parliament, but also other state structures on external grants. This is not just a technical point or a temporary inconvenience, but a serious blow to a whole range of state programs that have been functioning for years thanks to the funds of international donors. At the same time, the main problem is not only the termination of funding, but the fact that Ukrainian institutions are not ready for independent management without external support.

During 2024, Ukraine received 6.05 billion dollars from USAID, of which 3.9 billion was directed directly to the state budget in the form of grant aid for non-military expenses. The rest of the amount was distributed between economic programs ($1.05 billion), humanitarian aid ($580 million), and support for democracy and human rights ($340 million). The government programs financed by these funds were long-term and calculated until at least 2029. Now their implementation is under threat.

Visit: epravda.com.ua

Among the key areas of USAID funding that are at risk, it is worth highlighting the energy sector. One of the largest projects – SPARC – received 439 million dollars. These funds were directed to the restoration of the energy infrastructure damaged by Russian shelling and the implementation of the construction plan of 1 GW of shunting gas generation. Now this process can slow down.

In the sphere of justice, the “Justice for All” projects, which supported the work of the State Judicial Administration, the Ministry of Justice, the Supreme Court, the High Council of Justice and anti-corruption bodies, will be affected by the suspension of funding. The electoral process is also experiencing difficulties: the National Agency for the Prevention of Corruption and the Central Election Commission received funding through the Program for Effective and Responsible Politics (U-RAP).

USAID also funded programs in digital transformation, cybersecurity, media and civil society support. For years, the state relied on these funds to implement reforms, instead of creating its own sustainable financing system. Ministries, departments, and state agencies that were supposed to work on self-sufficiency received tens of millions of dollars for their operating expenses.

In addition, USAID funds were directed to the field of health care. Programs to combat tuberculosis, HIV, improve access to quality medicines, and develop public health were financed. The Safe and Affordable Medicines (SAFE Med) project, which was supposed to ensure the financial availability of medicines, is now also in jeopardy. This also applies to other health care support programs that were integrated into the general system of medical reform.

Programs for democratic development, government transparency, and civil society support also received funding from USAID. According to the programs “Join!” and “Initiative of sectoral support of civil society in Ukraine” financed a large number of public and charitable organizations. Grants supported the media program in Ukraine, the development of an independent information space, and the transformation of state communications. Now these projects may be curtailed or significantly reduced.

In total, in 2024, 39 USAID programs were operating in Ukraine for a total amount of 4.28 billion dollars. They were distributed among five key sectors:

• Democracy, human rights and governance – $1.09 billion.
• Economic development – 1.15 billion dollars.
• Critical infrastructure – 1.4 billion dollars.
• Health care – 381.8 million dollars.
• Transitional period and humanitarian aid – 252 million dollars.

Dozens of state institutions received funding, including the Ministry of Justice, the Ministry of Health, the Audit Chamber, the Supreme Court, the High Anti-Corruption Court, the National School of Judges, the National Agency for Public Service, and the State Financial Monitoring Service. In addition, the money went to support initiatives in the areas of decentralization, management of local communities, transparency of budget processes.

The state program “How are you?” was also financed. under the patronage of Olena Zelenska, which aimed to provide psychological support to Ukrainians during the war. Youth support programs, national identity initiatives, projects in the field of cyber security – all of them functioned thanks to external funding.

Consequently, the disconnection of USAID funding exposed the weakness of the state apparatus, which during the years of independence never learned to work without external funds. Instead of creating their own model for financing key reforms, governments, regardless of political orientation, have relied on international donor programs for decades. This has led to the fact that even the basic functions of the state – from the electoral process to digital transformation – depend on the decisions of foreign agencies.

Financial support from international partners played a critical role in the stability of Ukraine. However, now that it is suspended, the state is faced with the need to either urgently seek internal reserves, or risk stopping a number of important initiatives. The problem is not only that the money has stopped coming, but also that effective self-financing mechanisms have not been created during the years of independence from international aid.

Since 1991, Ukraine has declared its desire for independence in decision-making and the development of democratic institutions. For many years, USAID has financed projects related to anti-corruption policy, judicial reforms, local self-government development, and economic strategies. But if the state cannot ensure the sustainable development of these processes without international grants, this signals fundamental problems in public administration.

Now the question remains open: is Ukraine finally able to take responsibility for its economy, reforms and management, or will it continue to exist in the state of a dependent state that cannot even hold a round table without international grants? Without systemic changes and the development of internal resources, Ukraine risks turning not into an independent state, but into a country that constantly needs financial “artificial respiration”. And the sooner the government understands this, the more chances the country will have to become truly independent.