On June 13, a group of MPs from Volodymyr Zelensky’s ‘Servant of the People’ party introduced to the parliament a bill that, if passed, would allow companies to pay a monthly tax of 20,000 hryvnias (about $500) per employee in order to exempt said employee from mobilization into the military.
I’ll immediately say that just because the bill made its way to the parliament doesn’t mean it will actually be voted—I doubt it will be, despite intense lobbying from several business groups (the General Staff is reportedly not exactly thrilled about an initiative that could make the mobilization process even more difficult).
But what interests us isn’t so much the bill itself as the debate it has generated, a debate that goes beyond the simple issue of whether literally giving the possibility of paying to avoid being drafted is a good idea, and delves into Ukraine’s wartime social contract and whether it should be changed.
There are, to be sure, been discussions about the bill itself: proponents have pointed out the Ukrainian state’s desperate need for funds in a situation where it cannot use Western financial assistance on its military, with some claiming economic exemption would be more efficient than raising taxes; others noted that money is already being spent on bribes to dodge the draft, and the law would therefore draw into the legal economy money currently spent in the shadow economy; or that the bill is necessary to save businesses increasingly threatened by the lack of manpower happening because of mobilization.
Criticism, meanwhile, has largely revolved around the signal sent by the bill in a country where the perception that mobilization hits the poorest first and foremost is already widespread. “If we speak in simple terms, it is clear that [with this law], we draw a line between the highly-qualified and highly-paid workers, 99% of whom live in the cities, and the others who mostly live in towns and villages” admitted Ukrainian MP Fedir Venislavskyi in an interview to radio NV.
“Exemption should only apply to companies supporting our defensive capabilities, or which are indispensable to keep the state running (medical, education, energy, etc.)” political activist Yuriy Hudymenko wrote on Facebook. “The issue of justice is absolutely crucial for the continuation of the war. Same conditions for everyone. The war is for everyone.” As an indication of how hotly debated the issue is, that post gathered close to 500 comments, a good part of which expressed support for the bill.
“You can talk a lot about the economic benefits of keeping an IT guy working at his computer, bringing money in without risking his life on the frontline, but at the end of the day it’ll look like this: if you have money, you can avoid fighting, if you don’t, you’ll be forced into a bus [and mobilized]” wrote on Facebook blogger Serhii Marchenko. “The law on economic exemption undermines the unity of society and divides it along a poor/rich line”
My bubble of successful and wealthy people mostly supports [the bill]. It is quite strange that smart and experienced people could make such a childish mistake—war is not an economic phenomenon, and the economy does not play a key role in it, otherwise Ukraine would have ceased to be a long time ago […] War is not an economic phenomenon but a social one. It is society, the Ukrainian people that was able to stop an enemy who is, economically speaking, ten times bigger than us.
Obviously, the economy is very important […] and thank God that we have allies who provide us with weapons and financial support that our economy would have never been able to give us, even in the most favorable of times. […] The only thing that our allies cannot provide us with is the determination of our society to continue the war.
But really, the discussion is about the current social contract, a contract Volodymyr Zelensky made explicit back in January: “you can’t just be in Ukraine to breathe fresh air” he said during a panel of the Davos forum. “You can work and not be at the front, but you have to pay taxes”.
It’s an idea that the government and broader society have been pushing since the early days of the Russian invasion—that supporting the war effort can be done by joining the military, or by supporting that same military through donations or simply paying taxes. Crucially, the argument is that both ways of supporting the war effort are equally valid and equally important, that the “economic front” matters just as much as the “military front”. The thesis is neatly summed up in a piece by Ukrainian outlet Ekonomicheska Pravda about the dilemma between supporting business and increasing mobilization: “Ukraine can only find money to support the war within its own economy, so the ability of business to work and pay taxes is as important for victory as the ability of the state to mobilize people into the army”.
That contract has played a major role in keeping society united while maintaining a semblance of normalcy in the rear. There are, however, a lot of people (particularly in military circles) who vehemently disagree with this—who snide at any mention of the “economic front”, which they argue doesn’t exist (see the very first issue of this newsletter nearly one year ago for more on this). Some are pushing for a total or near-total mobilization of the country’s resources, others don’t want to go that far—but all disapprove of a situation where the country is divided between two classes of Ukrainian men, those who fight and those who don’t.
Economist Taras Yemchura made this explicit argument in a Facebook post by looking at it from the business lens: “it can often happen that an entrepreneur has volunteered to protect us all while his competitor has the opportunity to keep growing his company, slowly pushing the ‘headless’ business out of the market. By keeping people at the frontline with no prospect of return [demobilization], the state essentially punishes patriotism while favoring those who haven’t stood up to protect it.”
Yemchura’s suggested solution is one shared by many people who have been critical of the economic exemption bill: a mix of increased mobilization, increased rotations for frontline units and allowing the demobilization of those who have already been fighting for a long time: “everyone is going to have to get military experience in the coming decade […] there should be a complete overhaul of the mobilization process to ensure rotations and acceptable length of service […] we need to think strategically and build a state where every citizen is ready to hold both the ‘economic’ and the real front.”
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