Washington, DC
Remarks
ADMINISTRATOR SAMANTHA POWER: Thanks so much to all of you for coming out today. I know you're hearing a lot, I know many of you know a lot. But I think it’s fair to say that of all the things that we could be doing today, or really any day this year, this is the most important. This is where the stakes are the highest for freedom, for the notion of independence, for the shared prosperity – prosperity that we all seek – and you all giving your time to these discussions, giving your input as well to those of us who work in government. It’s just invaluable. So, thank you, and thanks to Marjorie for spearheading this, and for the incredible partnership that we all have with the Chamber of Commerce.
I want to start by sharing an exciting development from Lviv, in Western Ukraine. As many of you know, throughout this latest phase of Putin’s invasion of Ukraine, the one that started last year on February 24, Lviv has managed to keep up its spirit – the downtown has continued to be really quite bustling – even when Russian missile took out the power across the country and including in Lviv. Streets flanked by cathedrals, theaters, and cafes, now are soon about to welcome a new neighbor: the Kingspan Construction Technology Campus.
The Kingspan Group, an Irish insulation and building materials company, recently announced a $200 million investment to construct a Technology Campus in Lviv. They will build six high-tech plants and employ 600 to 800 people when construction begins next year. The project is called Saoirse – which is Gaelic for “Freedom.”
Kingspan, as I’m sure you’ve heard already this morning, is not alone. Across Ukraine, business is returning. Nestle is investing nearly $43 million in a new foods production facility, which is going to add 1,500 new jobs. Bayer, a close partner of USAID, is investing over $65 million to expand a corn seed production facility with state-of-the-art agriculture field equipment, storage facilities, and bomb shelters to protect employees. And in October of last year, a survey by the American Chamber of Commerce in Ukraine showed that 98 percent of its member businesses planned to stay in Ukraine in 2023.
Some sectors, and this really I think has not gotten enough attention, are not merely returning to normal, or remaining – they’re actually growing. Even during this brutal war, with all that we know is happening day to day, all that we know is being inflicted upon civilians and workers across the country, Ukraine has expanded its leadership in cutting-edge industries like artificial intelligence, fintech, and blockchain. In 2022, last year, the IT industry brought more than $7 billion to the Ukrainian economy – and that was a 20 percent increase over the year before. A 20 percent increase, notwithstanding, the circumstances inflicted by Putin and his forces on the Ukrainian people.
Now, I know you are all well aware of the potential rewards of being an early investor in an economy poised for material growth, poised for far deeper integration with European neighbors in the years ahead. The questions for many are not about the potential rewards, the questions are about the risks – the risks of investing amidst an invasion, and the risks of investing in an economy where the regulatory and governance environment does increase the costs of doing business.
And here, I just want to say two things. First, profoundly, every contribution to Ukraine’s economy, right now, is a contribution to winning the war. That’s not necessarily a part of your business model, but we are all humans, we are all citizens. It really matters. As you consider the risks, I hope you will also consider the stakes – the human stakes, the stakes for the values that we all hold dear.
Second, I’d also urge you to give a fresh look at how the risks have changed even since the start of the war, and know that whatever caution you have identified, or whatever stands in the way, whatever the barrier to entry is for you, we in the U.S. government, as I know you've heard already this morning, want to work with you to mitigate those risks and try to bring down those barriers as best we can.
We are investing heavily, in partnership with the Ukrainian government and fellow democracies and multilateral institutions, in reducing the costs of doing business in Ukraine. And we’re committed to doing more right alongside all of you.
Ukraine’s power grid is one very high profile example of where risk calculus has shifted significantly. One of the most difficult challenges last year was the lack of consistent electricity needed to operate a business. But, USAID spent months helping Ukraininans repair critical infrastructure and delivering transformers, generators, and even a mobile power plant big enough to power 100,000 homes. And now, the power in many places is not only back on, but actually producing such a surplus that this week, Ukraine began supplying parts of Moldova and Poland with power again, as well. So, since those attacks on critical infrastructure began, this week marks a very, very important threshold crossed and a sign of how much things have changed.
In specific sectors where the invasion has disrupted operations, the United States and multilateral partners are working together to provide direct support. For instance, as we all know, Ukrainian farmers have had difficulty selling grain outside the country over the past year – that, in turn, has left many farmers without enough revenue to plant this season’s crops, to hire local workers, or to replace equipment that Russian attacks may have destroyed.
So, again, USAID is trying to step in, we are funding the distribution of seeds and fertilizer that farmers need. And just two weeks ago, the World Bank and USAID’s so-called AGRI-Ukraine initiative – which any of you who are interested, I would love to talk to you about, we would love more private sector partners and more partners from multilaterals and other donor governments – but we, together with the World Bank, announced a $132 million program to increase access to financing for Ukrainian farmers, so that they can get the capital they need now to be in a position to plant next year’s harvest. This too, by the way, has cascading effects all around the world because Ukraine has long been the bread basket of the world. And in countries like Lebanon and Somalia, where there is a very significant food crisis, getting these farms to plant and working to get those exports to market is a life and death challenge before us all.
We’re also helping take on the barriers that still prevent investment, even beyond Putin’s continued violence. For a new investment climate report, USAID just surveyed 122 [102] Chamber of Commerce companies with ties to the U.S. and Ukraine; surveyed U.S. investors and international organizations; and economic experts. The report, which you will hear more about in the next panel, identified eight areas of reform. So, this is crowdsourcing the reform agenda from people in the private sector and others.
And now, we are taking that crowdsourced reform agenda and working with the Ukrainian government to help ensure that those reforms get implemented. For instance, we’re working together to improve transparency, reduce opportunities for self-dealing, and make the judiciary more independent, which in turn, of course, would build confidence that contracts will be honored and investment regulations enforced.
Finally, we know that even if companies are interested in investing in Ukraine, they might not know where to start – where the best opportunities lie, or how to navigate things like risk insurance so as to help secure their investments. Or, we hope, your investments.
So, earlier this week, USAID signed a Memorandum of Understanding with the Government of Ukraine and the U.S. International Development Finance Corporation to work together on an initiative that President Zelenskyy launched last September called AdvantageUkraine. AdvantageUkraine works with companies to connect them with potential investment opportunities. Foreign investors can express interest in investing in a particular sector, while Ukrainian businesses in turn, who are looking for support, can propose projects.
Now, USAID and the Development Finance Corporation will build on this effort and help turn these connections into actual investment contracts and deals. The DFC will also provide investment support, like identifying which projects are eligible for debt financing and risk insurance.
As you consider the potential opportunities in Ukraine, I would urge you to think of them in terms of the innovation risk curve. We are in that early stage now when an opportunity holds promise, but it is unknown, and many fear it is too risky. But the “early adopters” take the odds – push reform, secure reform with us – and will, here, benefit enormously.
By investing in Ukraine, you can join companies like Kingspan, Nestle, and Bayer in the group of early adopters. You can invest in Ukraine’s future. And in doing so, you will be investing in democracy’s future.
Please know that as you do, USAID and our partners around the world plan to offer our full support.
Thank you so much.