Heather A. Conley on Coordinating Multinational Support for Ukraine

Transcript of GMF President Heather A. Conley’s remarks from the April 13, 2023, U.S. – Ukraine Partnership Forum hosted by the Department of State, Department of Commerce, and USAID, supported by the Embassy of Ukraine.

Six Steps for Ukraine’s Reconstruction

I'm so grateful that the German Marshall fund is here on the stage because we were created 50 years ago as a gift from the German government to thank the American people for the Marshall Plan, and I suspect in 50 years, the Ukrainian Rada will be sending a gift of gratitude for the reconstruction of many of the donor countries.

In some ways we forget our history, which I think is why the German Marshall fund is a living Memorial to the Marshall plan. That's why we've leaned in so heavily in supporting a modern Marshall Plan for Ukraine, because as the prime minister has said, if we are united in defense, we must be united in recovery. We have to, I believe, think of the parallels of, not only is the Ukrainian counteroffensive going to be absolutely essential in liberating the occupied territories, but equal weight has to be given to Ukraine’s recovery.  Because if Russia believes it has the power to destroy, we have the power to build. That's the message of hope. That's what the Marshall Plan did 75 years ago for the 16 recipient countries of Europe. And it's no accident that the head of the Marshall Plan—the European Recovery Program—was the foremost CEO of the United States, Paul Hoffman. And it was the unleashing of the private sector, great American companies sending their manufactured equipment. Great American know-how, which is what allowed Europe to fully recover in such a short period of time. We did it then, and we can do it now. But we have to do it in a modern way.

This is where the German Marshall fund has tried to think through what are the key steps that we have to take. For the time constraints, let me just point out what I think are the six steps for success:

• Number one, as the prime minister again was saying so clearly, transparency. That has to be built into the recovery. The transparency and the accountability—accountability that we need from the top down—that's government and procurement. And we know the government is working very hard on that, but it's also the bottom up. It's civil society. It's municipal leaders. It's everyone making sure that this is a transparent recovery process.
• We have to have accountability. Russian assets must be put to work in order to allow Ukraine's recovery.
• Unleashing the private sector. We need war insurance. We need a strategic investment fund. We have to encourage these important integrative market principles into the process.
• We have to expand the donor base as much as these three gentlemen represent this fantastic G7 donor coordination platform, we have other donors that need to be part of this process. We have to expand that.
• We have to provide adequate capital to the international financial institutions.
• Finally, you know, Ukrainians will rebuild Ukraine. This is their private sector, their people. We want to make sure that again, civil society is at this table.

So we think those are the six steps, and we really need that policy framework to allow this recovery to happen.

We Need Action Now

We believe the G7 multinational donor coordination platform was actually a direct recommendation from our report in September. But Paula, I want to bring this fast forward a little bit because I think what's missing in this conversation is urgency. It's speed. It's flexibility. We're talking, we're having lots of conferences. We're talking. We're not moving. We need to move, and the move that we need to make is at the London Ukraine Recovery Conference June 21–22. The British government has placed the private sector as a key element in this conference and I want to talk through our recommendations.

We need to move the policy framing needle at London. There needs to be a shared agreement on use of Russian assets. There needs to be more insurance and a risk-sharing investment fund mechanism. We need mechanisms for war bonds so Ukrainian diaspora and others can create investment pools so the Ukrainian private sector can access that. We need absolutely, what the minister said, we need that sectorial focus, but here's the great news: We have a vibrant Ukrainian private sector that needs the capital. They need to cut through this. We need to start these early recovery projects in the west and in the center where we can rebuild.

We can produce a thousand reports and other great think tanks are producing similar reports, but we have to move forward and this is why we think it's so essential to unleash the private sector. Let them get started, let the policy be framing and supportive of that. But if we continue to…. This is sort of the analysis paralysis and quite frankly, I think it's a lot of leftover fear [from] reconstruction efforts over the last 20 years that have not been fully successful in the minds of many. So we have to clear that clutter from our minds and put forward a bold action plan.

Again, just speaking from a US perspective, but I would say [to] other European countries, if we have committed this much to defending Ukraine, why in the world are we not leaning in and saying we are going to be right there rebuilding Ukraine. I don't understand the political hesitancy, and we don't have time. Exactly as Secretary Raimondo said, we keep saying for as long as it takes. Ukraine doesn't have for as long as it takes. 2023 is an essential year for the counteroffensive and beginning reconstruction. We can keep talking at conferences or we can start to move. We really do need action right now.

Road to London

The EU integration piece could not be more important. And just for your history lesson, it was the requirement of the original Marshall Plan. We were not recovering 16 different countries; we were creating markets and that was the vision of Paul Hoffman, the CEO then of Studebaker. He said, I'm not reconstructing these, we have to build market integration. This is why it is so important - and thinking regional integration. We have an extraordinary opportunity in Ukraine's recovery to create the most modern, sustainable—it can be a leader of in the European economy on all of these issues, an economy of the future. That is the positive vision that I think we have to look forward to.  Those are two incredibly important points. I'll just say, and as I mentioned, what needs to be done at London, an agreed framework on use of Russian assets and agreed framework on war insurance, a donor coordination mechanism that opens its aperture for the private sector. I would also argue there has to be a role for civil society and municipal leaders who are eager to be part of this great democratic rebuild project. But I will tell you, and I'm the biggest supporter of this conference and pushing for all of these achievements, but if we leave London with more papers written, more conversations, and we have not moved the needle, we have failed. And I don't want to see that failure. So we've got a very short period of time, but I think this room speaks to the importance, that people want to get involved. They're trying to figure out how to get involved. We have to create that framework for their involvement, and then let's unleash them.