NEW: Ukraine's MoD to merge with Ministry of Strategic Industries

BLUF: The MoD will oversee not only the procurement of necessary military equipment but also its production. Until now, the Ministry of Strategic Industries has been responsible for this, and acted as a bridge between industry manufacturers and the government.

President Zelenskyy has announced a shuffle of Cabinet of Ministers, and in the shakeup, the Ministry of Strategic Industries will become part of the Ministry of Defense.

One of the main priorities of the next Prime Minister, Yuliia Svyrydenko, is scaling up Ukrainian weapons production.

Zelenskyy said that she has been tasked with contracting the necessary numbers drones and conducting “significant deregulation [to] release the internal economic potential of our country."

Export control reforms and other changes to the Ukrainian defense regulatory ecosystem have been in the works for months.

In the next six months, the new government should increase the level of Ukrainian weaponry on the front from 40 to 50 percent, said Ukraine’s president.

“Today, I have already signed documents to the Verkhovna Rada regarding Denys Shmyhal as the new Minister of Defense. Strategic industries will also be managed through the Ministry of Defense,” stated Zelenskyy.

He also added that Herman Smetanin, who has been the minister of Strategic Industries, will return to Ukroboronprom, a state-run association, as the new head. He held this position before the appointment as the minister of Strategic Industries.

Denis Shmyhal, who has already submitted his resignation letter as prime minister, will become the new head of the Defense Ministry.

"Denis Shmyhal's colossal experience will definitely be useful in the position of Ukraine's Defense Minister – this is exactly the area where the country's maximum resources, maximum tasks, and a great deal of responsibility are now concentrated," Zelenskyy said in his address on July 14.

What was the Ministry of Strategic Industries in charge of? 

The Ministry of Strategic Industries served as a bridge for communication between the Defense Ministry, the Ministry of Internal Affairs, and other agencies with manufacturers, Hanna Gvozdiar, Deputy Minister for the Ministry of Strategic Industries, said during a recent Invest in Bravery event.

"Our task is to come to the Ministry of Defense with the list of products, with the list of our capacities. And so the Ministry of Defense could plan the budget, and understand what is possible to buy right now and what will be available for purchase in the next year," she said.

The ministry is also responsible for forming regulations and maintaining a list of critical defense enterprises. Employee conscription deferment issues have also gone through them.

Denys Shmyhal has previously commented on the creation of new enterprises and the development of the defense industry.

He made no direct statements about the need to lift export restrictions, focusing instead on the Danish model (Read our report on how the Danish model works here).

"We currently produce about a third of the weapons we need. Our goal is at least 50%. We have transformed Ukroboronprom. Today, it ranks in the TOP-50 strongest defense companies in the world. The Ukrainian defense industry is integrating with the global one," Shmyhal said in March regarding industry development.

For now, it remains an open question how the merger will proceed and what impact it will have on defense contracts.

The MoD currently oversees the Defense Procurement Agency, which in charge of legal supplies to the army, and the State Operator for Non-Lethal Acquisition.

Thanks to our media partner: