Observations From Berlin: Twelve Comments About Financial Support For Ukraine By Conference Participants That Need To Become A Mantra
Observations From Berlin
Twelve Comments About Financial Support For Ukraine By Conference Participants That Need To Become A Mantra
“Converge, Not Compete”
Last Tuesday, 25 October 2022, in Berlin, Germany, leadership of the European Commission (EC) representing the twenty-seven member countries of the European Union (EU), heads of state (four; two virtually), heads of government (three; one virtually), representatives of international financial institutions, experts from think tanks, and participants from non-governmental organizations (NGO’s) convened at the Westhafen Event and Convention Center (WECC) for the International Expert Conference on the Recovery, Reconstruction and Modernisation of Ukraine hosted by the government of Germany (which holds the current G7 presidency (Japan is next)- Canada, France, Germany, Italy, Japan, United States, United Kingdom) and the EC.
The conference was not a forum to thrash out specific policies- and then craft the legislative and regulatory pathways for implementation. While there were conversations about the micro aspects as to what should be done and how to do it, the focus was about the macro aspects as to what issues are important and why those issues are important. So, no solutions presented.
The conference in Berlin was presented as a follow-up, chapter two of an expected multi-volume tome with many competing authors writing in various languages, to the 4/5 July 2022 Ukraine Recovery Conference (URC022) in Lugano hosted by the Swiss Confederation.
That conference was scheduled prior to 24 February 2022, but retitled subsequently. Prior to the end of the that conference, the government of the United Kingdom (England, Scotland, Wales, and Northern Ireland) reported it would host a similar conference in 2023. And prior to the conclusion of the conference in Berlin, the government announced that it would host another conference in 2024.
Expected are announcements by other governments along with public sector financial institutions (World Bank, International Monetary Fund (IMF), European Central Bank, European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), Organization of Economic Cooperation and Development (OECD), etc.) for conferences, symposiums, gatherings, dialogues, expositions, and colloquies at which government officials will tout taxpayer-funded disbursements directed towards Ukraine- and the opportunities for companies located outside of Ukraine to participate in projects within Ukraine. Unsurprisingly, companies located within Ukraine will have their perspective as to who should do what within the territory (however measured). The race, marathon, has commenced as company executives, and the lobbyists and advocates they retain, seek a piece of a US$300+ billion multi-year construction pie- perhaps, the world’s largest thus far…
Consequential Conference Take-Aways
The conference in Berlin commenced with an Opening Plenary featuring heads of state and heads of government who promptly departed the venue only to return for Closing Remarks. In an error of presentation, one government official included in their closing remarks a list of what was most striking from the comments throughout the day. One problem- the individual was not in attendance throughout the day. One lighthearted moment- a senior international financial institution official took a seat to listen to a panel, but then realized there were no other senior government officials in attendance- so with an assistant quickly departed, to return later, with appropriate-level colleagues. Unfortunately, the official missed a useful conversation.
Next were five panels- each distinctive and each with competent perspective. These speakers knew their subject matter- and that mattered to this particular audience.
There was unanimity among the two hundred participants (and 124 government representatives) that corruption and lack of democracy and lack of transparency remains in Ukraine post-24 February 2022 as it has since 1991 and again past 2014 and through recent elections. NOTE: There were two reserved seats for representatives of the United States Government: Mike Pyle, Deputy National Security Advisor at The White House, and a colleague. Neither official’s presence was announced; some other government officials questioned the low profile considering the higher profile three months ago at the conference in Lugano. Some of the most insightful panelist comments:
“Ukraine must have a democratic transformation.”
“Ukraine must continue its democratic transformation in order for European integration to be a reality.”
“Democratic reform not implemented after 2014.”
“Since 1991, choice by successor governments in Ukraine toward command-control like U.S.S.R. has hampered development and transformation of the economy.”
“Energy is the poster-child of corruption in Ukraine. Solution: 1) Integration into EU market- business practices. 2) Coordination of international assistance (Ramstein Format possible). 3) Use donor funds to leverage private capital.”
“Investment Funds should manage the state budget of Ukraine to mitigate corruption.”
“For Ukraine to be bankable there must be substantial reforms.”
“Investment projects must be bankable not only supportable.”
“We lend money, and we want money back.”
“Need predictability in money deliveries.”
“Donor competition is a problem”
“Converge, not compete. There are too many ‘Marshall Plans’ as governments want to put their name on things.”
“Ukraine was immensely corrupt prior to the invasion by Russia on February 24th [2022]. The war has not miraculously vaporized that thirty-plus year developed DNA. Everyone needs to remember this.”
These specific messages which represented the theme throughout the day were uncomfortable for representatives of the government of Ukraine, including the Prime Minister and the Minister of Finance. Yet, they served an important purpose- a welcomed speed brake and reality check for too much self-congratulation and “thank you for your leadership…” by one official to another official.
Disturbing remains, however, that the thus far virtually-created USS Ukraine supply vessel has yet to be budgeted, let alone designed or constructed, and some government officials in Berlin (as some also did in Lugano) were commenting about how much they enjoyed the inaugural cruise. This is cart-before-the-horse thinking on steroids.
