Strengthening Partnerships: Updates on Ukraine’s Economic Recovery

THE WASHINGTON FOREIGN PRESS CENTER, WASHINGTON, D.C.

MODERATOR:  Okay, we’ll go ahead and get started.  Good afternoon, and welcome to the Washington Foreign Press Center’s briefing on Strengthening Partnerships: Update on Ukraine’s Economic Recovery.  My name is Doris Robinson, and I am the briefing moderator.  As a reminder, this briefing is on the record.  We will post a transcript later today at fpc.state.gov.  For journalists joining on Zoom, please make sure that your name and media outlet is in your chat window.  

And now I will introduce our briefer.  Our briefer today is Penny Pritzker, U.S. Special Representative for Ukraine’s Economic Recovery.  She will start us off with opening remarks, and then after that we will take your questions.  Over to you.

MS PRITZKER:  Great, thank you.  And good afternoon, everyone.  I just got back from two trips to Ukraine over the last two weeks.  The feeling on the ground has changed remarkably even since my last trip in January.  There are real consequences to our failure to get Ukraine the assistance that it needs.  Vladimir Putin is attacking Ukraine’s energy system, hitting thermal and hydropower generation facilities, substations, and transmission and distribution networks – leaving hundreds of thousands without power.  Ukraine is losing ground on the battlefield because of the congressional inaction, and every single day is only further emboldening Putin’s aggression.  

This is a critical week on the Hill.  Let me be clear – 784 days into Russia’s full-scale invasion, the House must act to provide the crucial security, economic, and humanitarian lifeline that Ukraine needs.  And they must act now.  The American people support Ukraine, and we cannot abandon them in their time of need.  

We must also stay united and coordinated with our G7, European, and other partners through this challenging period.  On my trip to Kyiv last week, the Multi-Donor Coordination Platform, or MDCP, held its first steering committee meeting there since the war.  This group is a testament to what the international donor community is able to do when it collaborates.  I’m proud to say that with our efforts, the MDCP is on track to launch a business advisory council at the Ukraine Recovery Conference in Berlin in June.  

In order to defeat Putin, it is not only going to take a sustained commitment from governments, but also increased private sector engagement, like a business advisory council, to be more agile and responsive to the complex and rapidly changing environment in Ukraine.

I also want to underline that supporting Ukraine is a vital interest for both the United States and its allies.  Ukrainians are fighting bravely to protect not only their sovereign and territorial integrity, but the European Atlantic system of democracy, and the very values that allow the U.S. and Europe to live in freedom and prosper.

The threat from Putin does not end at Ukraine’s borders – he has said as much.  Part of Putin’s war strategy is to try and destroy Ukraine’s economy.  Since my appointment as special representative for Ukraine’s economic recovery by President Biden, I have been working with the Ukrainians, our allies, and other partners, as well as the private sector, to strengthen the enabling environment for private sector investment, and working across key sectors to boost Ukraine’s economy now.  Why now?  Because a functioning Ukrainian economy is both key to its war effort and to its achieving its Euro-Atlantic goals.  

I’m pleased to say the Ukrainian economy, just like its military, remains alive, active, and resilient.  The GDP is expected to grow at around 4 percent in 2024, after 5 percent growth last year.  State revenue increased 25 percent in January 2024 over the previous year, and 2023 saw investment up 17 percent with over 37,000 new businesses registered in Ukraine – more than half founded by women.  Such results do not just happen.  They’re the result of close collaboration and partnership across governments, international financial institutions, NGOs, the private sector, and more.  

I just arrived yesterday from Chicago, where Prime Minister Shmyhal and I met with a diverse group of Chicago and midwest business sector leaders.  We want to work together across key sectors to mobilize investment, leverage private sector expertise, and accelerate Ukraine’s economic transformation.  It is not going to be easy, but we are already seeing positive impacts now.  From agricultural producers like ADM and Cargill that are continuing to support Ukrainian farmers, to insurance brokers like Marsh and Aon that are providing war risk insurance and insurance for – hull insurance.  

The American private sector has played a key role in the Black Sea miracle, allowing nearly 1,400 ships to export around 40 million tons of goods to 40 countries through the humanitarian corridor.  American tech companies, from Google to Cisco to IBM, have been a part of Ukraine’s growing tech sector at every level, through cloud services, data analytics, digital upskilling, and hardware provisions.  

And while I was in Kyiv last week, we were proud to announce a $156 million deal to provide 40 diesel locomotives for Ukraine’s national railway, UZ, and its 200,000 “iron people.”  That deal was enabled by the EXIM bank financing, the first such deal since the full-scale invasion.  The private sector will be a key underwriter of Ukraine’s economic recovery, but security and economic recovery are intertwined.  The Ukrainians desperately need more air defenses and interceptors to protect their people and critical infrastructure against Russian missiles and Iranian-supplied drones.  

General Cavoli got it right in his hearing last week when he said, and I quote, if one side can – “If one side can shoot and the other side can’t shoot back, the side that can’t shoot back loses.”  The House must pass the supplemental.  We simply cannot delay any further.  And with that, I’m happy to take your questions.

MODERATOR:  Thank you, Special Representative.  We’ll start the question-and-answer session now.  We’ll start taking questions in the room.  Please raise your hand and wait for me to call on you, and please state your name and your media outlet.  And let’s go here to Alex.

QUESTION:  Thank you so much, Doris.  Madam (inaudible), thank you so much for your time.  Can you please help us put Ukraine damage — 

MODERATOR:  Alex, can you say — 

QUESTION:  Alex Raufoglu from Turan News Agency.  Can you please help us put Ukraine damage into numbers?  It used to be (inaudible); we heard that a couple month ago.  What is the current number, by your calculation?  And you also said this morning that Ukrainians are ready to drive the country from economic resilience to recovery.  Help us – can you help us decode it a  little bit?  What did you mean by that?  Thank you so much.  

MS PRITZKER:  Well, first of all, the estimates of damage are getting close to $500 billion.  I think that number the World Bank uses is $486 billion of estimated damage to Ukraine’s infrastructure, residential buildings, businesses, schools, cultural facilities.  And now also – and then on top of that the most recent damage that’s been done to the energy infrastructure, I’m sure, will raise those numbers.  

In terms of going from resilience to recovery to renaissance, really what I was talking about is the notion that, with security, Ukraine has every right to be able to not only just recover but also build into a thriving Euroatlantic-oriented country that has the potential to provide goods and services to the global markets.  

And what I meant by that was if you think about the six sectors of the economy that we’re working on with the Ukrainian Government – whether it’s ag, or it’s critical minerals, mining, or steel, or it’s energy, or defense production, or technology – in each of these sectors, Ukraine has the talent, the ingenuity, the capability, and frankly, the track record to be successful and to provide those products and services to the global markets where there’s – this morning we had a meeting with a number of businesses, including in the infrastructure area, where businesses are saying there’s a shortage of capacity around the world in general to solve the problems that are being – that are arising all over the world.  

Ukraine has talented people, it has well-trained people, it has natural resources, it has really a well-developed tech services sector, so it – there’s no – and it’s applying all of these capabilities right now not just to – in business or in commerce, but also in war.  And out of that pressure of war comes ingenuity, and so I think that that’s what I meant by renaissance.  There’s an opportunity for the country to emerge from this terrible situation much, much stronger and really being a vibrant contributor to the global economy.

MODERATOR:  Thank you for that.  Let’s take our next question online.  Let’s go to Dmytro Anopchenko Inter TV, Ukraine.  Dmytro, go ahead and unmute yourself and turn on your camera, if you would like.

QUESTION:  Oh, thank you very much.  Dmytro Anopchenko, Ukraine and U.S. correspondent.  Thank you for taking my question.  Ma’am, I am really interested in your vision of how to use the Russian money frozen in the United States.  And to – you possibly know better than me that there are different ways.  I spoke to World Bank ex-president Robert Zoellick, and his idea – and I know that there are a lot of supporters – that those money have to be given to Ukraine right now, even we should not wait until the end of the war.  You definitely heard about the congressional idea to use those money as a loan guarantee.  So I’m really interested in your vision.  What is the way, what is the best way, to use that money to help Ukraine, to support Ukraine?  Thank you. 

MS PRITZKER:  Thank you.  I think that, first, Russia has to pay for the damage that it’s caused, and as we were just discussing, that damage is now estimated to be over $486 billion, according to the World Bank.  And that damage is not only to the energy sector but also to other infrastructure, to residential buildings, businesses, schools, and cultural facilities.  And the G7 partners have looked at various mechanisms to take action to utilize the $300 billion in Russian sovereign assets.  And as Secretary Yellen has said, it’s necessary and urgent for our coalition to find a way to unlock this value of these immobilized assets to support Ukraine’s continued resistance and long-term reconstruction. 

So to me, we are – first of all, we are in active discussions with the G7, and I think those discussions are making great progress to come up with an exact structure of how to use, at a minimum, a portion of those assets at this time.  And that is, I believe, essential in order to provide critical support needed to begin to address this hundreds and hundreds of billions of dollars of damage that’s been done. 

And the need is urgent, as you know.  What types of things should those assets be used for?  I believe it should be used for reconstruction and building the future, and making this notion of resilience to recovery to renaissance a reality. 

MODERATOR:  Thank you.  We’ll take another question from the room.  I believe – let’s go to Italy here. 

QUESTION:  Yes, yes.  The asset question was mine, but I’ll switch to another question.  I would like to ask you which are the priorities in —

MODERATOR:  Can you say your name? 

QUESTION:  Yeah, sorry, Alberto Simoni from La Stampa, Italy.  Which are the priorities in your reconstructions project, because you said energy has been destroyed, also subways, schools.  So would you have a list with the place to start with? 

MS PRITZKER:  So one of the things that we’re doing is working with the Ukrainian Government to begin to develop what’s called a set of priorities for reconstruction.  And what we’ve proposed, and are in the process of having conversations about, is really what we’re calling pre-project planning, which is really – there needs to be – if you take the six sectors that I talked about as areas of opportunity, what do you do first?  Where do you focus?  How do you make sure that the resources are used effectively and efficiently?  That’s right now – there’s an agreement that – of which sectors.  

But now there’s a question of how do you prioritize and who participates?  Frankly, from everything that I’ve heard from the private sector, there isn’t enough private sector capacity or government capacity to do everything at once.  And so we’re – there’s a need to figure out if you’re going to, for example, hook your energy system into the West, which is – the grid is now – parts of it are interlinked with European – the European grid, which in fact is a big part of help that’s going on right now under the current situation that’s been threatened, the energy situation that’s been threatened by Russia.  Now one has to figure out, okay.  We know that’s true.  Where – what kind of systems do we want to have?  What – how decentralized?  Where to focus?  

And I’ll just take, for example, energy.  It’s – they have – too much of their generation is centralized, and that’s made it vulnerable to Russian attack.  Modern systems are more decentralized and definitely greener.  That’s an aspiration of the Ukrainian Government.  But how do we go from that aspiration to actual projects?  That requires pre-project planning.  And we’re now working with some of the largest companies in the world, and it’s – and to advise Ukraine as to how they might then begin to execute on – that’s just energy.  Then you can imagine rail or road systems, bridges, and other types of infrastructure.  

And then you can imagine a need for additional schools and housing, et cetera, as more and more of their refugees return, which they do.  I was in Bucharest in the last 10 days and met with a group of refugees; 93 percent of the refugees in Romania want to go back to Ukraine.  Many of them are women with children.  They’re grateful to the Romanians, but they would like to ultimately return home.  That’s going to mean there’s a need for more schools, more housing, et cetera.  

And so how does one proceed in an efficient manner?  There are – and this is where a public-private partnership will need to exist to do the planning.  And this is where governments and NGOs can come in; and this is not just the U.S.  It will also involve European companies, Japanese companies, et cetera, our allies that are all participating in – who want to participate in the reconstruction.  And then the question is how do you do the logistics so you don’t end up with a situation where you run out of either steel or you run out of concrete or you don’t – so all of that is – are – is the kind of work that should start now.  

MODERATOR:  Thank you.  Let’s go here.  

QUESTION:  Thank you for your time today.  So —   

MODERATOR:  Please, say your name.  

QUESTION:  Talia Rose from Yomiuri Shimbun.  What would you evaluate partner countries’ efforts in supporting Ukraine’s recoveries, specifically with regards to Japan as well?  Thank you.  

MS PRITZKER:  How would I evaluate them? 

QUESTION:  Yes. 

MS PRITZKER:  Well, I think – I think that there will be – it will be up to the Ukrainian Government to figure out the prioritization.  And then my – I suspect what they will do is then ultimately run RFPs and be matching countries or – excuse me – companies that are desirous of providing services or construction or other things with various projects, and those will be evaluated on the specifics of those projects.  There are companies from all of the partner countries in the MDCP who have the capacity to contribute to the reconstruction of Ukraine.  And frankly, we’re helping the Ukrainians to figure out how to access all of that because it’s all going to be needed.  

MODERATOR:  Thank you.  And we have time for one last question.  Let’s go here.  

QUESTION:  Thanks.  I’m Margret Johnson with Radio Free Europe.  The question is if you would be able to just elaborate a little bit on what you said in your opening remark about an announcement that’s coming in June in Berlin.  Is that – could you – would you elaborate on that?  Just explain if that’s a new development and how it fits in with some of the partner countries that you’ve already mentioned? 

MS PRITZKER:  Sure.  So a big opportunity is the Berlin Ukraine – it’s called the Ukraine Recovery Conference.  It’s being hosted by Germany in Berlin in June.  It’s an opportunity to – for the Ukrainians to showcase their progress, let’s say on reforms, their opportunities in terms of their various sectors.  It’s an opportunity for all the partner countries to talk about what kind of support they’ve got available.  It’s an opportunity for the private sector to showcase what it can bring to the table.  And so the Ukraine Recovery Conference, I think, is – has the potential to be an important moment in both envisioning and brining to reality some of the future ideas about Ukraine’s recovery and reconstruction.  

MODERATOR:  And we do have one last question.  A journalist just e-mailed: “Will President Biden participate in the Ukraine Peace Summit in Switzerland?”  

MS PRITZKER:  I’m sorry.  I didn’t hear that.  

MODERATOR:  I’m sorry.  

MS PRITZKER:  The Ukraine what? 

MODERATOR:  Will President Biden participate in the Ukraine Peace Summit in Switzerland in June? 

MS PRITZKER:  I really have no idea whether he’ll participate.  I – my guess is, though, the America, – I was participated in the one in January and my guess is there will for sure be American representation.  But I have no idea whether he personally will participate.  But that doesn’t mean – President Biden has been absolutely clear in his support for Ukraine, and that is unwavering.  And he, in fact, has – I think has his pen out and is waiting to sign a bill from Congress, the supplemental, which I’m very hopeful that since we’ve gotten – the supplemental now has been introduced in the House, which is a good sign, and we know that the Speaker has said that he wants to have a vote before the weekend.  Leadership has said that they want to have a vote by this weekend.  

And I am – I’m going to take them at their word.  So I’m hopeful that we’ll have things to talk about in – shortly because once that supplemental passes, I think that – I mean, the situation has been quite dire, and I think that Ukraine is very much – has been quite clear they are definitely need our support, and our military support as well.  And so I’m hopeful about that.  

MODERATOR:  Thank you so much.  This concludes the question-and-answer portion of today’s briefing.  I would like to thank very much Special Representative Pritzker for taking the time to brief us today, as well as to the journalists for joining us today.  This concludes today’s briefing.  Thank you all.  

MS PRITZKER:  Thank you.