It took the new president of Ukraine only six months after his inauguration to present his vision for the aerospace industry’s role in the country’s overall economic development. The decree President Victor Yushchenko signed June 10, “On Measures to Further Develop the Space Sector in Ukraine,” acknowledges the “defining role of the space sector in promoting high-tech development of the national economy and ensuring its competitiveness, in serving the state’s security and defense interests, and creating a powerful industrial potential while solving social problems, including the creation of new jobs and improving of living standards.”

The presidential decree order ed the government to draft the National Space Program for 2007-2011 by April 1 and submit it to the Parliament no later than June 15, 2006.

Implementing the president’s order, the National Space Agency of Ukraine (NKAU) approved Oct. 20 the draft Concept of the State Space Program of Ukraine for 2007-2011. The concept analyzes the main features of today’s market of space services, the main trends and priorities in space-related scientific research, as well as the role and place of Ukraine in the “family of space powers.”

According to the document, the main flaw of Ukraine’s current space program is the considerable gap between the enormous cost of some show-off projects and their low practical utilization and impact on the economic and social well-being of Ukrainian citizens. As such, the new concept names commercialization as the main priority of the country’s space program for the next five years.

The overall volume of the satellite-building industries in the world in the next 10 years will be around $25 billion to $30 billion, according to the document, and the total cost of the satellite-launch services for the same period will be about $20 billion to $22 billion. The authors of the document encourage Ukrainian space officials and company managers to aggressively pursue the satellite-manufacturing and launch-services markets .

The draft of the concept identifies the following domestic conditions as the factors that have prevented the country’s technological and industrial potential from being fully utilized:

– First, the government is reluctant to support projects which do not bear fruit immediately, marking long-term projects low on the priority list.

– Second, the pursuit of collaborative programs with other countries in lucrative and scientifically beneficial ways has not been sufficiently aggressive.

– Third, the general public often does not support space-related expenditures, arguing that those funds rather should be spent towards more acute economic and social needs. M any decision-makers do not see the connection between space technologies and solving economic problems “on the ground.”

As a result of those conditions, most of the satellite-building and launch-service projects for the past decade have been based on technological breakthroughs of the Soviet times. NKAU has failed to create a planned cluster of Earth observation spacecraft, has had to suspend a number of promising scientific projects and has failed to contribute much to national defense.

To remedy the situation, the draft concept outlines a half- dozen “strategic directions” for the period from 2007- 2011. It also lists a dozen “anticipated results.”

The proposed activities encompass practically all major aspects of space exploration — from building and launching satellites for Ukraine’s Defense Ministry to conducting research at the international space station to increasing launch services for foreign customers.

To accomplish all the listed tasks, NKAU will need a budget of about 750-900 million hryvnas annually ($150-180 million), or 0.2 percent of the Ukraine’s projected gross domestic product.

There is, however, one problem. Even such a moderate budget is still 10 times larger than the current level of state funding for space, and the draft concept does not specify how exactly such a tremendous NKAU budget increase will be possible.

During more than a decade of independence, the Ukrainian space agency has never received the funding slotted in the state budget. Although the Law of Ukraine on the State Space Program strictly obliges the government to provide NKAU budgeted funds, which averages about 360 million hryvnas annually, in reality the space agency has been provided around 90 million hryvnas a year. How is the Ukrainian government planning to come up with funding 10 times higher that that?

The rate of Ukraine’s economic growth is definitely insufficient to ensure the envisaged space program budget increase. Another way for NKAU to improve its funding situation is to sell space-related services and products to foreign customers and use the revenue that generates to finance the projects outlined in the concept.

Providing satellite launch services is Ukraine’s obvious strength, but even these advantages have not been as lucrative as expected. As of today, NKAU’s only stable outside source of revenue is the Sea Launch project, which generates about $100 million annually . Other international ventures that involve Ukrainian boosters have not become money-making machines as yet.

The Ukrainian space program is tightly connected with the Russian space agency Roskosmos’ current and planned endeavors, and in most of them Russia is playing a leading role.

For example, in the Ground Launch project, The success of Sea Launch prompted Ukraine and Russia to consider using the Baikonur launching facility for boosting various modifications of Zenit rockets. Three-staged ground-launched Zenit-3SLB rockets can be used for orbiting satellites contracted through the Sea Launch project. The first such contract already has been signed with PanAmSat to launch the PAS-11 satellite in the late spring or early summer of 2007.

However, Russia will be getting 70 percent and Ukraine 30 percent of the expected project revenue.

Roskosmos has been also contemplating the possibility of using the Ukrainian Zenit-3SLB launcher as a booster for the Clipper shuttle, a planned replacement for the Soyuz spacecraft currently used to transport people to the international space station.

But the so-called Orange Revolution in Ukraine in late 2004 worried some Russian officials.

Alexander Medvedyev, the former director of the Khrunichev Research and Production Center, proposed making the Clipper project to build a replacement for the Sozyuz launcher an all-Russian endeavor by using the Russian Angara booster instead of the Zenit , and Plesetsk instead of Baikonur as a launching pad.

Russian officials argued that dependence on other countries should be avoided to prevent the project from becoming a hostage of political stability in participating countries, namely Ukraine and Kazakhstan.

Although many Russian engineers are skeptical about practical feasibility of this idea, arguing that the Angara project is at the drawing-board stage now and the Zenit has been in the market since 1985, NKAU participation in Russia’s Clipper project remains uncertain.

The Russian-Ukrainian company Cosmotrans, which was established in 1997 to market Dnepr launch vehicles, also has not been as profitable as expected. Dnepr is based on the Soviet SS-18 liquid-fueled intercontinental ballistic missile, which was produced at the Ukrainian Yuzhmash plant and in Soviet times was deployed in Russia.

After the break-up of the Soviet Union, Russia decided to convert its 150 SS-18s into space launchers to reduce the existing nuclear arsenal. Ukrainian engineers, who built the missiles, provide extremely valuable expertise for converting them into spacecraft. But since 1997 , there have been only five Dnepr launches .

For 2006, Cosmotrans has signed a contract with the American company Bigelow Aerospace for two launches, and experts believe that competition will make it next to impossible to find customers to launch more than two rockets a year .

With the small number of launches and a rather moderate price tag for launch services — as well as the fact that the START Treaty requires SS-18s to be converted into space launchers by 2020 — it is unlikely Cosmotrans will be a major revenue generator for NKAU in the foreseeable future.

Another international venture is the joint Ukrainian-Brazilian project Cyclone-4 — Alcantara. In late 1999, Ukraine and Brazil signed an agreement on using the Alcantara launching site for orbiting Cyclone rockets. Originally, the first launch of the modernized Cyclone-4 rocket was scheduled for 2001, but a number of serious setbacks along the way significantly delayed the implementation .

If the project proceeds as scheduled, the first launch will take place in 2007, either as a trial launch without a commercial payload, or carrying a Ukrainian or a Brazilian satellite. And again, at this point, it is hard to say how lucrative this endeavor will be for the Ukrainian space program .

It also is hard to say what joint space activities may develop from the framework agreement on cooperation between NKAU and NASA, which is expected to be signed in the spring of 2006.

“We are very eager to join the programs that NASA runs today,” Ukrainian Prime Minister Yuri Yekhanurov said at the joint press conference after meeting with NASA officials in Washington in November . How eager NASA is to make Ukraine a participant in those programs remains to be seen, though.

The draft of the Concept of the State Space Program, which is currently being reviewed by relevant ministries and agencies in Ukraine, openly states the space program’s flaws and correctly describes their reasons. The statement of the goals and objectives for the next five years looks idealistic, though.

It does not provide a clear vision of what needs to be done or what is being done to ensure that the 10-times increase of domestic funding reaches those goals and objectives. Even assuming that technologically NKAU research institutes and production facilities are capable of implementing the outlined grandiose projects, the proposed unrealistic budget makes the concept look like wishful thinking .

Victor Zaborsky is a senior researcher at the Center for International Trade and Security at the University of Georgia in Athens.