After negotiations collapsed in February, Ukraine's critical minerals deal with the United States is slated to be signed this week. Kyiv and Washington will set up a joint investment fund for postwar reconstruction, with Ukraine contributing half the revenues generated from exploiting natural resources.
However, granting the U.S. partial economic and governance rights has led critics to characterize the deal as extortion. In reality, it's an investment in Ukraine's survival and future.
Without comprehensive post-war reconstruction, Ukraine will become a failed state. Its greatest obstacle to rebuilding and safeguarding its borders remains entrenched corruption. Yet the fund's design integrates stringent American standards of transparency, accountability, and anti-corruption, ensuring the revenues serve the nation's broader economic and social revitalization rather than filling the pockets of oligarchs.
The corrosiveness of corruption cannot be overstated. It weakens national security, corrodes public trust, undermines military preparedness, and deters critical foreign investment. In the 1990s, after the Soviet Union's collapse, Ukraine followed a path similar to Russia's descent into corruption and oligarchy, with chaos and weak institutions allowing a small elite to seize control of vast swathes of the economy. Despite years of reforms, Ukraine's anti-corruption agencies have repeatedly fallen short.
After Russia's annexation of Crimea in 2014, Ukraine's international partners were unwilling to send substantial aid without stronger anti-corruption safeguards. As a condition for their support, Ukraine established new bodies like the National Anti-Corruption Bureau of Ukraine (NABU), independent of the compromised judiciary. Although these new agencies initially demonstrated promise, they've increasingly succumbed to political interference.
All too often dismissed as Russian disinformation, these concerns were explicitly shared by the Biden administration, as leaked confidential documents confirm. But the then-U.S. president refrained from voicing them publicly for fear of undermining the war effort and emboldening Republicans who were critical of Ukrainian aid.
These concerns are also deeply felt within Ukraine itself. Indeed, more citizens view corruption as a greater threat to their country's development than Russian aggression.
Daria Kaleniuk, executive director of the Anti-Corruption Action Center, a prominent local NGO, places much of the blame on Andriy Yermak, President Volodymyr Zelenskyy's powerful chief of staff. She notes that while the war has disrupted Ukraine's old oligarchic networks, it has unfortunately given rise to a new oligarchy centered around Yermak and built under the protective cover of martial law.
Allies of Yermak frequently receive government contracts at inflated prices. Despite a litany of allegations, top officials in the president's office remain seemingly immune from anti-corruption prosecutions. A NABU investigation implicating Yermak himself in selling government positions was shelved, fueling fears of political influence.
Meanwhile, NABU is accused of being weaponized against political opponents, with recent cases disproportionately targeting reform-minded individuals for corporate governance breaches rather than genuine corruption.
Under these conditions, meaningful reconstruction becomes next to impossible. Indeed, the massive influx of funding and large contracts required to rebuild Ukraine's infrastructure would create a bonanza for corrupt networks. If these funds are diverted, Ukraine will lose a historic opportunity to strengthen itself, becoming even more vulnerable in the future.
Secondly, if the country's vast resources fall into the hands of a new generation of oligarchs, Ukraine risks entrenching the same corrupt system that has hampered its growth from the start.
It holds significant deposits of minerals critical to the global economy — lithium, graphite, cobalt, titanium, and rare earth elements — as well as reserves of oil, gas, and coal. And as history shows, once strategic resources are captured by a powerful few, breaking their stranglehold becomes notoriously difficult.
U.S. oversight will guard against this as Ukraine begins to exploit its critical minerals. The deal is designed to ensure that mineral revenues benefit broader Ukrainian society — not just a privileged elite.
It also has the potential to disrupt existing oligarchic monopolies. Consider that corrupt networks struggle to compete on a level playing field with the private sector, diluting their power and weakening their grip on state institutions.
It will also boost Ukraine's credibility in international markets, attracting essential foreign investment and strategic partnerships necessary for genuine economic revitalization. With responsible stewardship of resources, this initial American-assured investment can act as anchor capital, signaling confidence and attracting other investors to Ukraine's wider economy.
U.S. oversight could represent the decisive intervention Ukraine desperately needs to break its persistent cycle of corruption. While concerns about economic independence are understandable, there is even less autonomy under a corrupt oligarchy — one that systematically weakens the nation from within.
This minerals deal is not a threat to Ukraine's independence; it is an investment in it.
Ivan Sascha Sheehan is a professor of Public and International affairs and the associate dean of the College of Public Affairs at the University of Baltimore. Opinions expressed are his own. Follow him on X @ProfSheehan. Read more here.
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