AMBASSADOR OKSANA MARKAROVA: Thank you again for coming and, it's difficult to start this with, “good day”, because this day is, is a difficult day of course. And one year ago, Russia started a full-fledged war, and it's almost nine years since Russia attacked us the first time in 2014.
And, and of course, today, we are talking about all the horrible destruction and deaths and, war crimes and atrocities and everything that happened. And unfortunately it still goes on in Ukraine. But we will not focus on that. We will focus on saying that not only we were able to stand and fight back and liberate more than half of what Russia attacked and occupied since February 24th.
But we, together with the United States, the strategic friend number one, I wouldn't even say partner or ally because during this year we have seen what we knew before that the U.S. is a strategic friend number one. We are talking about this year as victorious year and that we can, and we must win. So, I will just open with saying how grateful we are to the people of the United States, to President Biden, to all [the] Administration, to Congress, on a very strong bipartisan basis, for the support which has been invaluable.
And whether it's security support, humanitarian support, budget support, it's not just the line in the budget. It's the lives that have been saved. It's the food that has been delivered. It's the best investment in the people of Ukraine who are defending not only our homes, not only our loved ones, but also freedom and independence and democracy, and I would like to specifically say thank you to Administrator Power. My good friend Samantha, who has been with us long before this full-fledged war has started. But during this year, the team of USAID here and especially a brave team on the ground have worked tirelessly, helping not only Ukraine as a state, not only Ukrainian people, but also our NGOs.
And we have to say very loudly today that it's of course our brave President Zelenskyy, who's fighting and who's leading, and who's showing remarkable example of leadership. It's of course our brave defenders on the front lines who are holding the line and defending our people, but it's also all Ukrainians, all 40 million of us, and it's all the civil society. Something, unfortunately, that we do not see in large numbers in authoritarian Russia. That has been a secret element of our success. So it's about Ukraine but it's much bigger than Ukraine. And today, as we mark one year and as we remember everyone we have lost during this year and all the 14,000 that we have lost during the previous eight years, we also want to say that we will win. We will win this war, and then we will focus on winning the peace after that. And building Ukraine that will be the best country for Ukrainians but also an example of something innovative and inspiring – vibrant democracy.
ADMINISTRATOR SAMANTHA POWER: Thank you so much. Thank you all for gathering on what is really a solemn occasion. And I, like Ambassador Markarova, want to focus very much on the hopeful story of Ukraine's fight, the – against the odds – resilience, courage, success on the battlefield, on the military battlefield, but also on the battlefield to strengthen democracy. And I think we can do so.
But it is important to remember that a year ago and one day this invasion hadn't happened. Putin hadn't decided to go across the border and pulverize civilians, pulverize the electricity grid, pulverize maternity wards, theaters, apartment buildings. And this was a war of choice and it was a horrible choice. And Ukrainians have sacrificed so much in the last year to defend their country, to defend their independence, to defend their democracy, to defend their freedom. And you are very kind to express gratitude to the United States or to USAID but honestly, we are grateful to you. We are awed by your commitment to the values that we cherish here in the United States – freedom, independence, democracy, dignity,-- but you have had to sacrifice too much and it's wrong. And, even if you have done it brilliantly and awe inspiringly, it is still important to say on this day just how wrong it is that you have to fight for these values.
I am here to tour the Ukraine house, to see my friend, and to talk about the road ahead, of course, as we do so often. But also, to announce that today we have begun dispersing the resources – the 9.9 billion in additional direct budget support – that we will be providing, thanks to the bipartisan support from Congress. So that has started today.
As many of you know, direct budget support helps pay the salaries of healthcare workers, of educators, it helps pay for medical procedures in medical institutions. It helps pay first responders who are the people who rushed to the scene of the crime, more often than not, when an apartment building or another civilian infrastructure has been hit. What Putin has done is tried to decapitate the Ukrainian economy. And this direct budget support provided by the American people is absolutely critical to keeping the government going, to keeping Ukrainian society – Ukrainian institutions – functioning as the brave fighters on the front take back the territory that was unjustly robbed from them, taken from them.
I'm also here to announce, today, that the United States – USAID – will be working with Congress to provide an additional $250 million to strengthen Ukraine's energy sector. And we know that this is important. Even as the Ukrainians have shown unbelievable resilience in a bitter cold winter as Putin's forces have tried to deliberately take out critical energy infrastructure deliberately weaponizing winter – weaponizing that bitter cold. Even as we start to see the glimmers of spring on the near horizon, the conditions are still extremely difficult in Ukraine and building resilience into Ukraine's energy infrastructure is mission critical.
So this $250 million will go to doing everything from additional generators – USAID has already provided more than 2,000 generators, boilers, mobile power plants, pipes, to replace those pipes that have been destroyed. And as with everything Ukraine tries to do, they bring to recovery and reconstruction efforts a goal, as well, to build back better, as they put it. And we are very much a part of that thinking in terms of the now, but also in terms of the long term and that peaceful, stable, and prosperous Ukraine that is going to outlast this war and be an inspiration to the world when the fighting has stopped.
I also wanted to note that we will later, today, announce plans to provide, again in consultation with Congress, $300 million in energy security support to Moldova, as well. It is no secret, the kinds of actions that the Russian Federation are taking in an effort to destabilize Moldova, including using energy blackmail but other forms of destabilization as well. This energy security support is going to be extremely important for Moldova, as Moldova has, of course, stood side by side with Ukraine on behalf of freedom, self-determination, and independence.
So, to wrap all this up, before we take your questions, I would just reiterate what President Biden has said – and what, I gather, has had great resonance in Ukraine, especially, in the wake of his visit – which is the United States and the American people will stand with Ukraine for as long as it takes.
Thank you so much.
MODERATOR: We will start questions. Please introduce yourself.
REPORTER: Is there a deadline or time period for which the $ 9.9 billion will cover Ukrainian needs? And also, how are you making sure that U.S. assistance is being spent, for its correct person, uh, purpose – that this money are not misused?
ADMINISTRATOR POWER: That's a great question. First let me say the $9.9 billion, as you probably know, grows out of the supplemental that was passed at the end of last year. And that is money that is meant for direct budget support to last, through the end of the fiscal year, so for the first nine months, effectively, of 2023. And that is in keeping with the $1.5 billion we provided every month to help Ukraine manage what amounts to a $5 billion monthly deficit, at least, going into this year. That was roughly the gap between the revenue that Ukraine was able to bring in and the expenditures that the government was confronted with, in terms of, again, just running the government and, and paying salaries, and pensions and the like.
One thing I want to do is put that number of $9.9 billion in additional context because the United States is not only working hand in glove with our Ukrainian partners to decide sort of what allocations make the most sense at what time, but we are also drawing on the incredible coalition that has come together in support of Ukraine's defense.
And so people focus a lot, again, on the latest military system and security support but it is absolutely essential that the European Union at the end of last year, as well, announced 18 billion euro for direct budget. Norway recently announced a $7 billion package as well, which includes direct budget support. Japan is providing support as well as loans. The United Arab Emirates has just announced it's providing mobile power plants to help in the energy sector. So, you know, while we are here, proudly, to talk about support from the American people, I think it's really important to note just how thick this coalition is, how broad-based it is, and how enduring it is as well.
With respect to your question about verification, this is an absolutely critical question. In no country where USAID works, do we rely on goodwill or personal relationships. We rely on institutions, and we rely on checks and balances, and we do a lot of verification.
In the case of Ukraine, we have worked with the Ukrainian government to decide upon a set of categories for which expenses can be billed against the direct budget support. And those are some of the categories I've mentioned, and those vary depending on the tranche and depending on the needs at the time. We are working through the World Bank, which has a set of safeguards and verification measures that they have put in place. We have also dispatched a Deloitte team to assess the strength of the systems and identify any gaps or weaknesses.
We do not have evidence of any U.S. assistance being misused or misspent. But that doesn't mean our vigilance is down in any way. And the last thing I want to stress, is that this is about kind of what USAID does within its traditional channels, but in many ways the most enduring and essential work that we are doing alongside this is the work to strengthen Ukraine's own checks and balances. So working with the anti-corruption prevention agency, working with the specialized anti-corruption court, working with civil society and independent media because it's the Ukrainian people, above all, who don't want this money to go anywhere other than its desired end state.
So, the investments that the United States and USAID have made over time in judicial integrity in this ecosystem of anti-corruption bodies are – those investments are now really bearing fruit in terms of there being scrutiny from inside Ukraine. And that is how indeed, even some of the issues and the problems that have been exposed in recent weeks have been brought to light. It is by independent media. It is by civil society. It is now making its way through the Ukrainian courts to be prosecuted in Ukrainian courts. So again, corruption doesn't disappear from any society ever, really. There's corruption in every society. What is key is that the responses are systemic and not episodic. And that is the goal of USAID's work over a long period of time with our Ukrainian partners. And I think you're starting to see those institutions kick in and do their work. But again, we cannot relax our vigilance anymore than those who want to see this support continue, can relax theirs.
REPORTER: Madam Ambassador, there have been concerns from Republicans about the rising cost of support. Some of the Republicans, particularly among the presidential candidates, seem to be kind of going soft on Russia, for lack of a better way to put it. What arguments are you making to Republicans in particular to convince them to keep support going and how much do you worry about it?
AMBASSADOR MARKAROVA: Well, thank you. I think the argument to American people – and they are the same, regardless of whether they are Democrat, Republicans, or independents – is first supporting Ukraine in this fight is the right thing to do. We are fighting for the values on which this great country is built. We were a peaceful country. We are a peaceful country. We never planned to attack Russia, even after they attacked us in 2014. We spent eight years trying all kinds of instruments of democracy and diplomacy in order to reach a diplomatic solution and restore our territorial integrity. We have been brutally attacked on the 24th of February. It was a violation of all international laws. So if we, both of the countries that believe in the same values, it is the right thing to do.
The second element of that is by attacking Ukraine, Russia literally destroyed the global security architecture that was put in after the World War II. So it's important for Ukraine. It's existential for Ukraine to win this war, but it's existential for everyone who believes in the international rule of law. And if Russia is not defeated for what they have done to Ukraine and before us, what they have done to Georgia and what they have done to the passengers of the MH-17 and what they have in Syria, what they have done poisoning people in UK – and we can go on and on and on – then all of us are not safe. It's the question of the national security for us, but also for Americans, and also for everyone who believes in this values.
And third, it's very effective, also an efficient thing to do because Putin has been very clear, not only on February 24th, but even before that and definitely after that, that he's restoring some kind of empire. That he is actually – that it's not only about Ukraine, so God forbid, if he will attack other countries, especially NATO countries, it's going to be much more expensive. And the NATO countries, including U.S., will have to send the people to defend those that are allies in the NATO alliance. Ukrainians do not request the troops on the ground. We never ask for the military. We only need the tools and we still have enough people who are ready to defend our country. So from any perspective you see, whether it's the moral thing to do, the right thing to do, the internationally required thing to do, or the most efficient thing to do, it's just the – our all duty to stop Russia while it's still in Ukraine and we can do it.
ADMINISTRATOR POWER: And may I just add just one thing which is that the supplemental that I've mentioned, that we are drawing from to provide this energy support, direct budget support, that the President, the Secretary have drawn upon this week to provide additional security assistance – I mean this was not, you know, something passed a year ago, this was passed just before the end of the year and passed with resounding majorities. And in addition, there's a poll done, I think just, this week or last week by Gallup that shows that 65 percent of American adults support providing – the United States providing – support to help Ukraine reclaim its territory, even if that support is seen to prolong the conflict.
I mean, that's a pretty nuanced way the question was posed but I'm struck by the enduring recognition by a majority of the American people, reflected by a majority in Congress, that the values at stake and the interests at stake in this conflict are far too precious to jeopardize.
And even put in it’s reverse – to do the counterfactual and to imagine U.S. security interests, and this is where the Ambassador took her comments as well, but to imagine U.S. security in a world where someone can commit an act of blatant aggression and commit war crimes at this scale as, you know, with a degree of at least apparent intentionality. What it would mean to walk away from holding such an actor accountable. What it would mean to walk away from people who are willing to put their lives on the line to defend freedom, independence, democracy, and to challenge such impunity, even to turn it on its head and think about those consequences – I do think that that as well is going to help us retain, the very, very strong bipartisan majorities that we have seen for support over the course of this year. I would also note that I think you are seeing many more members from both parties taking the trip to Ukraine, which we really recommend – as many lawmakers, legislators to take as as possible – because by going, you see not only the bravery, which you can also see from afar, but you see the society-wide investment in building this democracy in the long term and for the long haul. And that, I think, doesn't get the headlines back here but that is one of the reasons I think so many lawmakers come back wanting to double down and even expand the kind of support that we are offering.
REPORTER: I have a question for you both.
Ambassador Markarova, I know that the Ukrainian government estimated a budget shortfall this year, about $38 billion. Between the support Administrative Power outlined and other countries, do you feel like your – the Ukrainian – government is going to have enough to plug that budgetary gap?
Administration Power, you mentioned that you've sent a team – a Deloitte team – to Ukraine to kind of monitor their verification systems, is that a report that you expect you’ll make public, that we’ll get to read at some point?
AMBASSADOR MARKAROVA: So in the budget needs, and actually to fund the budget is as important as to fight. We need to sustain the effort not only in the front lines but every way. According to the adopted budget, the $38 billion gap, which we now have not only commitment, but today, as you heard, the $9.9 billion from the U.S. are going to be dispersed. We have $18 billion from the European Union. We have other countries committing more, and recently when the director of the IMF has visited Ukraine, there was already information that we are working on a new program, full-fledged program, hopefully soon this year that also will help us to finance the budget. Now, is it going to be enough? We don't know. And we are working very hard with all of our friends, not only in G7, not only in the European Union, but beyond to get all the support that we can in order to be able to fund it.
We, on our side, Ukraine has cut all the expenditures that we could. We are trying. The Ukrainian businesses are doing unbelievable efforts in order not only to stay working in the situation, when you don't have electricity, you don't have sometimes water sewage, you don't have all your logistical networks are disrupted, but Ukrainian business, and I'm very proud that American business – which I call Ukrainian, because there are so many American companies that were in Ukraine before and not only stayed but expanded. Think about it. Like Boeing, for example, that expanded their center in Ukraine. They are hiring people during the war to work in Ukraine. So all these efforts. It truly will take a village for Ukraine to succeed.
And, you know, the USAID programs, also, which we count in the humanitarian portion of the assistance but actually working with small entrepreneurs, helping women entrepreneurs, helping people on the ground to start their own businesses, even at this time – all of that helps not only the effort now to win but also to allow people to stay because there are so many people that want to stay, and also people that want to come back. Out of more than 12 million people who were internally displaced in Ukraine and almost six million outside of Ukraine, the majority of them want to come back. And it’s work, shelters – bomb shelters in schools, and housing that they need, in order to come back.
So, all these efforts – we are working hard, I can not tell you that everything is secure for this year yet. But I am positive that with this alliance, with the leadership of the U.S. and the European Union, with the start last month of the coordinating platform, which is going to be the third coordinating platform after the security platform, which we call Ramstein – energy platform, which is also led by the U.S. and G7 countries – the start of this platform, the coordinating platform for reconstruction and finance and economic issues is going to be very helpful in that regard.
ADMINISTRATOR POWER: I’d actually just add to Oksana’s comments with regard to your first question. One distinguishing feature, I think, of the $9.9 billion that I announced that we’ve begun dispersing today, and the European Union commitment, and indeed the Norwegian commitment, is the predictability of that financing. Because in year one there was a lot of confusion on the battlefield, on how long the war was going to last, I think now we all know we are in it for the long haul. And to provide that kind predictability. And to allow commensurate budget planning and so forth, I think we’ve moved out of the more ad hoc phase of this conflict and that’s important.
I want to just build on what the Ambassador said and that is the importance of revenue generation within Ukraine and how important we feel that is, as USAID, in providing catalytic funding for SMEs, for young entrepreneurs. It sounds so counterintuitive, given what one sees of, again, the Russian bombardment but Ukrainian people are getting on with it – they're still starting businesses, many of them are relocating their businesses, Ukrainian farmers are getting on with it and attempting to plant and harvest, even as the Russian Federation has left unexploded ordnances in territory that Ukrainians have liberated and have actually taken – occupied, you know, very significant arable land.
But that's why I actually wanted to chime in here, which is, the importance of the Black Sea Grain Initiative, to the broader budget support question, should not be overstated. And right now, the Russian Federation is slow rolling inspections. Ukrainian farmers are now, you know, have reaped their harvest, have the grains that they're seeking to get out onto the open market, including to very vulnerable developing countries where famine is lurking, as in Somalia. They they've done the work, they have the grains, and yet, this mechanism is not working as we know it can because the output from the Black Sea Grain Initiative is much much lower. And it is because ships are idling in port for much, much longer. It is about $20,000 a day to idle in a Black Sea port in lieu of moving on and going through the inspection and getting your grain out to the open market where vulnerable people need prices to come down and need that grain to be made available. And you know, the average for some of the ships in port right now is about 20 days, do the math. That expense is an expense that a farmer who's trying to sell their goods is going to have to bear. And so the renewal is up – or the authorization is up. But it is not just about re-upping something that is slowing down. It is about bringing the pace of export up to what it had been for the sake of the Ukrainian economy, for sure, and having that domestic revenue and then that can be taxed and that becomes state revenue. But also for the sake of people in developing countries who cannot afford for this sort of de facto slow walk. And it's no longer a full blockade, but there is way less getting out to the open market than could be getting out if there was political will.
To your second question. Part of the exchange with Congress now around the $9.9 billion is a new set of reporting requirements. And those reports will be coming from USAID to the Hill. We've been reporting consistently about the World Bank mechanism and how those safeguards have existed. We've briefed continually up on the Hill about Deloitte and its findings, but now you will have I think, a sustained flow. You will also probably – we will be seeing more occasions where I and my colleagues will be engaging in public ways on the Hill around direct budget support and again we're more than happy to do that the American people certainly deserve full transparency into the mechanisms that we have in place. Thank you.