Brock Bierman, Assistant Administrator for Europe and Eurasia: NARUC Winter Energy Policy Forum

Speeches Shim

Monday, February 11, 2019
USAID Support for Energy Independence in Europe and Eurasia

Remarks by Brock Bierman, Assistant Administrator for Europe and Eurasia: The Journey to Self-Reliance and the Challenges of the Twenty-First Century

(as prepared for delivery)

Europe and Eurasia is at a critical time in its history. It has been 30 years since the Wall fell. Many of the Eastern Block and former Soviet republics are still deciding which paths to take.  These decisions will have consequences for global security for at least the next generation.  Energy plays an incredibly important part of that decision.  Our work shows that energy independence allows nations to make clear choices which enable society to live free and flourish. 

In 2002 when I made my first trip to the region, it faced an energy crisis.  To be more specific, electric generation, transmission and distribution were in chaos from 3 generations of communist and Soviet rule, exacerbated in many areas by recent armed conflict. 

What sticks in my mind most vividly is the lack of basic services available to the rural population - even an inability for basic electricity.  Picture walking into a village and seeing exposed power lines hung up with clothespins and dangling low enough for children to grab.  What we had in the 1990s and early 2000s was a crumbling legacy that has taken nearly a generation to put back on track. 

It is actually quite remarkable when you think about the last 25 years, when we opened our first mission, what we have accomplished.  But we must also keep in perspective what can be achieved in 25 years.  You cannot fix what took 3 generations to destroy in one generation, the legacy of which still lives on. 

What we didn’t have in the 1990s was malign influence. Given current circumstances in eastern Europe, we could see a return of chaos, and I’ll address that directly.  Fast forward 17 years and now you have a nascent developed energy sector on the verge of breaking out of dependency, but one that is captured by Vladimir Putin and his government for the purpose of influence, if not outright control. 

What sets the United States and USAID apart is simple. While we work to help make lives better and people more independent, the Kremlin is more interested in gaining influence and promoting the subservience of its neighbors.  That is why I feel grateful to serve in the Trump Administration, which views self-reliance as an intrinsic right and a guiding force of its foreign policy.  As USAID Administrator Mark Green puts it, “the purpose of foreign assistance should be ending its need to exist.  We must measure our work by how far every investment moves us closer to that day.”

USAID’s approach is to help countries chart their own futures. We believe in inclusive, accountable, enterprise-driven assistance which move countries from being recipients to partners, to fellow donors.  We want to work ourselves out of a job and build collaborative partnerships around the globe.  There isn’t a day that goes by where I don’t try to put myself out of job. 

In that spirit, it is worth reflecting on how much we have achieved with our partners in the short period of time since USAID started working in Europe and Eurasia.  We started with 24 partner countries in the region in 1991. 22 have joined the World Trade Organization, 12 have joined NATO, and 11 have acceded to the EU and have become fellow donors.

Now let me tell you about those successes.

During that same time, U.S. experts helped countries throughout the region such as Georgia –now a thriving democracy and U.S. ally - restore defunct power systems, moving from limited service - often just a couple hours per day - to reliability standards closer to Western Europe.  We established free market mechanisms and worked with international financial institutions to invest billions of dollars in energy infrastructure in the region, which has had the follow-on effect of establishing new segments of national economies.  In Southeast Europe, we brought former national adversaries together to collaborate on region-wide energy network planning and development, spurring over $10 billion in energy sector investment since 2005 alone.  

We have improved the capability of utilities and upgraded countless schools, hospitals, and other buildings, enabling citizens to access modern services and avoid having to deforest their countries for firewood.  We have broken energy monopolies around the region, and U.S. state regulators have helped their counterparts in Europe and Eurasia draft and adopt laws and regulations that have opened markets to new suppliers; establish wholesale and retail competition; and set environmental standards to protect consumers. 

USAID has also helped to establish regulatory institutions in over 15 countries, and helped found the Energy Regulators Regional Association, which brings together over 30 national regulators to accelerate energy reform and further the goal of open, transparent markets across the region.  

As evidence of the American spirit of generosity and our desire to help others lift themselves up, many, if not all of these successes were achieved with the help of volunteers, working to better the world and not to achieve political leverage.  It should be recognized that U.S. energy sector leaders, often through volunteer efforts in collaboration with USAID and organizations such as NARUC and the United States Energy Association, have had a profound impact on the region.  

These volunteers improved the quality of lives by imparting the skills necessary to provide reliable heat, allowing citizens to focus on building democratic institutions rather than trying to stay warm. They also helped electric utilities rehabilitate power plants and improve their operations, leading to reliable power necessary for small businesses to thrive.

The transformation of the energy sectors in these nations was crucial to their collective success and should be acknowledged as one of our greatest achievements.  On behalf of USAID, I would like to thank NARUC, USEA, and the nearly 4000 regulatory and utility volunteers that have worked hundreds of thousands of hours in our region over the past 30 years for your mission driven commitment, your expertise, and your dedication to the cause of making Europe and Eurasia self-reliant.

Now, let me contrast this approach with those promoted by the Kremlin and by China. While China pushes countries to accrue escalating and unmanageable debt, the Kremlin takes it one step further by employing fear and intimidation for political gain. 

The authoritarian approach to development is predatory, treating assistance as a tool to transform nations into dependents, drained of their own choices and resources.  In recent years, the Kremlin’s intentions in the region have become clear: to re-establish an authoritarian sphere of influence in Europe and Eurasia that would strip these nations of their independence.  The Kremlin supports fuel contracts at below-market pricing, allowing countries to accumulate debt or become dependent on cheap fuel, which is in turn used for political leverage.

Similarly, the Chinese Belt and Road Initiative became known as “China’s debt trap” for a reason.  And it is making its way into small countries, where they offer uncompetitive funding for unsound projects to secure Chinese access to local markets or resources, by trapping them into debt and vulnerable to Chinese influences.  For example, cash-strapped Sri-Lanka handed over its Chinese-financed port to a Chinese state company for a 99 year lease.

Our region is not immune.  We are already seeing Chinese investment in infrastructure in Bosnia and Herzegovina and Serbia.  And where finance isn’t an available means of leverage, the Kremlin uses more blunt methods, resorting to frozen conflicts to cripple energy resources, such as the cases in Ukraine, Moldova, and Georgia.  The Kremlin has also shown a willingness to cut off fuel supplies and has threatened countries in the region with “facing a cold winter” during disputes -- a threat leveled against Moldova in the past few years. 

This model of subservience runs counter to the democratic values of the United States and the free world.  You cannot be accountable to your citizens and serve a foreign master.   

Energy independence is vital to preserving democracy in the region.  Nations should be able to choose where their power comes from and how much they are willing to pay for it.  If they are stripped of that choice, their entire economy, and their entire government, become fully dependent on the whims of foreign actors who may not have their best interests in mind.   

We are committed to giving these nations the freedom to make their own choices.  However,  many interests want to limit these choices.  Using covert measures to damage energy systems and slow European integration, and offering tempting solutions counter to free market principles – they force countries into a deal with the Devil, trading national sovereignty for cheap fuel.

That is why we must continue to help our partner nations to reduce their dependence on imported energy, increase their integration with regional energy markets, and bolster the integrity of their energy systems to safeguard them from malicious attacks.

Our partnership with NARUC continues to be essential in this fight.  With NARUC’s support, USAID’s assistance not only enhances the independence and security of these countries but also establishes the groundwork for tomorrow’s private sector business opportunities.  Removing barriers to market entry and enabling competitive and transparent electricity and natural gas markets opens the door for US manufacturers and service companies to gain access to European and Eurasian markets. 

Good ideas translate across international boundaries, and the knowledge sharing has gone in both directions. In one particularly innovative program, collaboratively developed solutions to improve energy sector cyber security in some of our partner countries have already informed our work here in the United States, and we expect that it will continue to help our regulators and utilities harden the U.S. electricity grid.  

In closing, I should note that while we have made tremendous progress in the region, the new challenges we face are grave, pressing, and complex.  External malign influence, cyber threats, and corruption -- all emerging from or aggravated by the Kremlin -- are manifesting themselves in new and insidious ways.  As Putin tries to glorify Soviet Communism, we should never forget what outright dysfunction it brought to the world.  

As my favorite author David McCullough reminds us and I think this really sums up Vladimir Putin,  “The past after all is only another name for someone else's present.”  Putin is clearly trying to relive the past.    

Despite these new difficulties, I am confident we will prevail because we have a winning strategy. By advancing our partners’ self-reliance, we are empowering our partners and promoting peace, prosperity and security in the region for the good of  the American people.  

Our continued leadership on creating competitive energy markets, enhancing cyber security, and facilitating investments in the energy sector are mainstays of that strategy to support and empower the countries of the region.  This work also serves as one pillar of a broader initiative to confront the Kremlin’s efforts to isolate, polarize, and weaken countries across the region.  

As it turns out, what is good for the region is also good for Americans, who are USAID’s ultimate stakeholders.  It is also good for U.S. private enterprise.  American businesses reap the dividends of our development work through the generation of new and transparent business opportunities.  American citizens benefit from a more resilient electricity grid, made safer and more reliable based on lessons learned from abroad.  And we all benefit from a win/win approach that lifts us all up for generations to come. 

Thank you for your continuing commitment to our shared Mission: to build more secure, prosperous, and well-governed communities -- both at home and abroad.  

Last updated: December 13, 2019

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