Strategic autonomy in practice: Ukraine’s critical raw materials, growth accounting and shift-share evidence, 2010–2023

Abstract

This article examines whether Ukraine’s endowment of critical raw materials (CRMs) – here, graphite, titanium (ilmenite) and manganese – can support post-war growth while advancing Europe’s strategic autonomy. Two transparent tools are combined. First, a resource-augmented growth-accounting identity attributes real-GDP growth to a composite CRM production index, defined as a fixed-weight quantity index (2018 = 100) for graphite, ilmenite concentrate and manganese concentrate, alongside the residual productivity term. The estimated CRM contribution is positive in 2014–2021 but turns negative in 2022–2023 as production and logistics deteriorate; signs are robust to plausible income shares and alternative basket weights. Second, a shift-share decomposition of CRM exports (2018–2023) shows a large negative competitiveness effect in global markets, consistent with wartime disruption, but a positive competitiveness effect inside the EU-27 despite a contracting EU market – evidence of selective de-risking toward proximate, trusted suppliers. Read together, deposits create options, yet durable leverage depends on mid-stream capacity, verifiable compliance and resilient corridors. Policy follows: prioritize domestic processing (concentrates into chemicals/metals) under CRMA-compatible rules and bankable offtakes; embed OECD-type due diligence; design financing and logistics to absorb shocks. Limitations include a deliberately narrow mineral basket and incomplete capital/employment series.