'Ukraine may be indebted to U.S. for 100 years': economist warns of consequences of mineral deal

Oleh Pendzin, a member of the Economic Discussion Club, stated this on Espreso TV.

He explained that the main goal of the so-called “mineral agreement” is to have Ukraine recognize a debt to the U.S. for past grant aid provided during Biden’s administration, which currently amounts to $100 billion.

“Ukraine’s annual rent payments from mineral extraction total about $2 billion. If 50% of these payments were directed to an American-controlled fund, it would amount to about $1 billion per year. Given that Ukraine has received $100 billion in grants since 2022, this would mean Ukraine would be paying the U.S. for the next 100 years,” Pendzin said.

Currently, Ukraine’s total debt stands at $166 billion, while its annual GDP is approximately $180 billion—meaning sovereign debt already amounts to about 80% of GDP.

“If any Ukrainian politician were to accept this debt, Ukraine’s total liabilities would skyrocket to $266 billion, with a GDP of just $180 billion. We have never had a $100 billion debt. Under Ukrainian law, this would cause significant damage to the state budget,” Pendzin warned.

He also revealed that the U.S. aimed to establish a fund in Ukraine that would be fully controlled by Washington and financed by revenues from extractive industries such as oil, gas, and coal—specifically, 50% of Ukraine’s mineral rent payments.

“If that revenue were insufficient, additional contributions would come from leasing port infrastructure and other sources. This American-controlled fund would effectively siphon money from Ukraine in amounts equal to past grant aid. However, grants are supposed to be free assistance, not loans—Ukraine received them in accordance with U.S. congressional decisions,” Pendzin emphasized.

Yesterday, President Zelenskyy made Ukraine’s stance clear: there is no discussion of recognizing even half a trillion dollars in debt—such a sum never existed. He clarified that of the $100 billion figure, $70 billion was military-technical aid and $30 billion was macro-financial assistance. However, these grants were provided under U.S. law, and acknowledging them as debt would be “an absolutely absurd decision,” Pendzin concluded.