A Better Future for Ukraine and Its Partners

Transcript

Barry Pavel

Thank you all for joining us today. Both those of you at a nice, nice large crowd in person and also online. Welcome to this to this event on Ukrainian reconstruction and how that leads to a more secure future. I'm Barry Pavel. I'm a RAND vice president and director of the National Security Research Division at the RAND Corporation. And also, I wanted to offer a thank you to the Dachau Bacon house for hosting us here today. It's a really beautiful setting and will really help us to get creative ideas going for this really important set of strategic tasks. I just got back from Europe yesterday where I participated in the NATO's Public Forum at the Vilnius Summit, and I was fortunate enough to be in the public square, also in downtown Vilnius for President Zelensky's historic speech. I don't think there's anything else I would I would call it last week as well, right after he arrived in Vilnius. And it really seems that historic milestones are coming at us quite often these days in what I consider a real geopolitical moment. Decisions taken this year, particularly on Ukraine, but not only on Ukraine, will have major geopolitical impact for decades to come. We're truly in an inflection year, I think, not just an inflection point. So I'm really thrilled that our team that you'll hear from today, you know, developed this really important analysis and is bringing it to bear to help inform ongoing policy and strategy decisions. Ukrainian reconstruction, which is intertwined with security arrangements, has, as this ran report, which I strongly encourage people to download and get, as it points out, maybe at the very core of the momentous decisions that are needed. However, I'd also strongly encourage policymakers to think ambitiously about how the decisive defeat of Putin's invasion, which also will damage Xi Jinping in China, could help catalyze a new era of prosperity and security across the advanced democratic world. If we're creative and if we work to lock in the unprecedented unity that we're seeing across the major democratic powers on the three continents North America, Europe and Asia. And they can do so by creating new structures, new arrangements, etc.. When you look back at the immediate postwar period after World War Two, decision makers at that time thought very ambitiously and did develop new institutions using creative new approaches to ensure what has been the the most prosperous period in human history. So with that, now let's get to today's program. We'll begin with a brief presentation by two of my colleagues, Howard Schatz, a senior economist, and Gaby Tyranny, an associate policy researcher, both at the RAND Corporation. And it was their recent report, Reconstructing Ukraine Creating a freer, more prosperous and Secure Future that distills lessons from a wide range of other reform and reconstruction efforts to help policymakers plan for what lies ahead. Well, then turn to a very distinguished panel that includes Natalie Jaresko, former Ukrainian minister of Finance Doug Lute, a colleague and former U.S. ambassador to Naito. Bob Zoellick, former president of the World Bank Group, and our moderator, Charlie Reese, who is Iran senior fellow, former U.S. ambassador to Greece. We'll leave lots of time for questions and answers, because the goal here is to stimulate the right conversations about the right issues so that we can help policymakers develop more informed policy. But before we begin, this is a bit of a bittersweet moment for us at RAND. Earlier this month, earlier this month, we lost our colleague, Ambassador Jim Dobbins, who was one of the coauthors of this report and one of my predecessors who ran the National Security Research Division at RAND. Jim was a real giant in U.S. diplomacy and one of the great intellectual forces of land. And I even relied on him in my short time at RAND for a number of areas of of help on geopolitical and other issues. Charlie Reese, who worked closely with Jim for many years, is going to pay brief tribute to the impact of Jim's work and his amazing legacy of service. And so with that, let me turn over to my good colleague Charlie, and looking forward to the discussion.

Charles Ries

Very well. Thanks very much, Barry, and welcome, everybody. It's a it's really kind of fitting that we should begin our discussion today with a short remembrance of Jim, because he was. The his it was his vision, his his drive that made. This project. And he firmly led us throughout all of our research. As Barry said, we lost Jim two weeks ago and but his great insights and strategic insights and and his humanity will live on. I was privileged, as. Barry said, to work for Jim.As his deputy twice DCM at the U.S. mission to the U.S.. And in Brussels, and later on as principal deputy in the European Bureau at the State Department. He also, of course, had a big role in recruiting me to Iran some 14 years ago. But during the presidency of George H.W. Bush, Jim worked very closely with Secretary of State Baker and one of our speakers today, Bob Zoellick, on the two plus four process and other aspects of the reconstruction of Europe after the fall of the Soviet Union. And I know Bob will say something about that. But after those. Accomplishments, Jim. Sought and was chosen for the ambassadorship to the. European Community. With his extraordinary foresight, Jim could see that the. EEC. Later to become the EU would be a vital political as well as economic player in the transatlantic community and indeed to the wider world, which is the backdrop, of course, to our discussion of the impact of the Ukraine conflict these 30 years later. Within days of my arrival in Brussels, Jim took me to a private meeting he had with Jacques Delors, the President of the European Commission, and a similar big thinker to Jim. I recall. It. Vividly, not least because the meeting took place entirely in French and it took all of my concentration to. Keep up with the depth and flow. Between these two great thinkers in a language who wasn't my own. After his days in Brussels. Jim took on a number of incredibly thankless but vital assignments coping with Somalia, the Aristide crisis in Haiti, the Balkan wars to stand up a constitution in Afghanistan, and the reopening of the U.S. Embassy in Kabul. He returned even reluctantly to government under President Obama to manage Afghanistan for a year. Jim Dobbins took on all these assignments with. A sense of patriotism. And a conviction that the United States can and must do better. That was the approach he took at RAND, as well as director of International Security and Defense Policy Program and one of Barry's predecessors, as he mentioned, and as a distinguished scholar working on the dilemmas of nation building and other challenges. He was a good friend to me, my family. And we'll miss. Him. Now to set out briefly that our approach to the constant reconstruction of Ukraine and the feelings and the findings of our study, please to introduce Rand policy researcher Gabriel Tyranny and senior economist Howard Schatz. I'll introduce our guest, our distinguished guests panel afterwards.

Gabrielle Tarini

Thanks, Charlie. So, as Charlie mentioned, Jim Dobbins worked in a range of crises from the Western Balkans to Afghanistan. And while he was at Rand, he researched an even wider range of cases. Jim saw the need for a study on Ukraine's reconstruction that differed from the existing research in two important ways. The first is that some have compared the challenge of Ukraine's reconstruction to that of the U.S. experience in Iraq and Afghanistan. But in Jim's view, and in our view, these are not comparable cases. More relevant is Europe's long experience with postwar rebuilding. Unlike Iraq and Afghanistan, Ukraine is a modern country with a highly cohesive society and a functioning government. It is not facing insurgency. It's not facing a civil war. Second, we felt that the security dimension of reconstruction was incredibly important to include Without durable security arrangements for Ukraine, reconstruction is likely to falter. So let's turn to the reconstruction challenge first.

Howard Shatz

Thanks, Gaby. We looked at a number of cases, including after natural disaster reconstruction, but especially Western Europe after World War Two, Central and Eastern Europe after the Cold War and the Western Balkans, six after the Yugoslavia wars. And we drew a number of conclusions from these very relevant cases. Number one, successful reconstruction has entailed and will will entail creating links to the international economy, expanding trade, attracting foreign direct investment, and reforming the domestic business environment. This leads naturally to how reconstruction will be financed. And our second conclusion is that aid is going to be very important here. It's going to attract other financing, and it can take risks that the private sector won't take. But in past reconstruction events, aid has only been a small portion of total financing. There will need to be substantial private sector investment, new and existing foreign investors, Ukrainian investors, Ukrainian government funds and in this case, money from the diaspora. There are also there's also the possibility of using frozen Russian assets, assets that are frozen in the West, both official reserves and private assets. Now, there are some legal issues involved in this, as well as concerns about the use of international reserves, how those might affect the international financial system. It's notable that several major jurisdictions are already advancing legislation to put the use of those reserves toward reconstruction. The amount of aid is one issue. How it's used is another. Donor coordination will be a challenge. Donor coordination could slow reconstruction and create a burden for Ukraine. So there needs to be a donor coordination mechanism that will prevent donor freelancing. Each major jurisdiction will need to appoint a senior full time empowered coordinator and have senior representatives on the ground coordinating with Ukraine. Periodic donor conferences will not be enough in this case. Finally, this is not just about reconstruction. This is about reform. This is a chance for Ukraine to change what has been 30 years of unsatisfactory economic and political performance. Partly or in large part, this will be driven by conditionalities and those conditionalities will come from the European Union as part of its accession, as part of Ukraine's accession as well. This could take a long time. Fraud. Waste, abuse. Corruption could decrease Western interest in staying with Ukraine, and therefore there should be an inspector general and donors should insist on that inspector general and strong monitoring and evaluation. Let me conclude with one other aspect Who should lead this effort? This should be a joint European EU, U.S. effort, with the U.S. leading on security assistance and the EU leading on economic assistance. But the United States should be involved in economic issues and European countries in security issues. And most important, Ukraine should set the priorities, even if all of this works well. Reconstruction will not succeed if Ukraine is under attack or faces the threat of likely attack. And that's where we lead to security.

Gabrielle Tarini

So durable security arrangements are going to be essential for Ukraine as reconstruction progresses. And these arrangements are critical if donors and investors are going to have the confidence to take the risks and make the long term commitments that a successful reconstruction will require. And our historical case studies NATO's provided security for Europe after World War Two and after the Cold War, and then again in the form of deployed peacekeepers to the Western Balkans after the breakup of Yugoslavia. After the war ends in Ukraine, peace will endure only if both sides see peace as preferable to renewed conflict. And Ukraine, for its part, will have powerful positive incentives to keep the peace in the form of EU accession and in the form of a massive internationally mounted reconstruction effort. Russia, for its part, will have no such comparable incentives and receive no such benefits, and its adherence to the peace will rest principally on deterrence. So in our view, the U.S. and its allies have three basic options to deter Russia from attacking Ukraine as reconstruction is ongoing, and these options are not mutually exclusive. So first, the U.S. and its allies could perpetuate the current arrangements for Ukraine security by providing Western arms, advice and training. This is essentially what the G7 nations announced on the margins of the Vilnius summit last week. The G7 nations will launch bilateral negotiations with Ukraine to formalize long term security commitments to that country to include weapons training, intelligence sharing, support to Ukraine's industrial base and support Ukraine's resilience. On the U.S. side, this may end up looking like the Israel model of security assurances. Second, and a stronger measure of deterrence, the U.S. and its allies could introduce some form of Western military presence into Ukraine. And finally, there's NATO's membership. Netto is a clear option for Ukraine and would represent the strongest possible deterrent. The Vilnius summit made clear that NATO's membership for Ukraine will likely not occur for some time and will be conditions based. As Jim Dobbins like to point out during his work on this study, NATO's may not need Ukraine to deter Russian aggression successfully and Ukraine may not need NADO to enjoy meaningful material support for its defense. So the evolving European security architecture should reflect changes in the balance of power that have occurred since the breakup of the Warsaw Pact. NATO's has grown stronger and more powerful, while Russia has seen its influence considerably diminished. So it's possible that security arrangements for Ukraine may result in new models that go beyond the binary choice that NATO's membership offers. And Howard will conclude with some implications from our research.

Howard Shatz

Thanks. We drew a number of conclusions, but we had three immediate conclusions and policy implications when the report came out. First was that the United States should strongly consider the types of security arrangements that it could lead and coordinate with allies. That's in process. Second, the United States Congress and the president should approve, should pass, and the president should approve a modern version of the laws that Congress passed to enable our activities and reconstruction of Central and Eastern Europe and former Soviet Union. That will get planning started and appoint a senior coordinator. Finally, there needs to be a bipartisan effort to explain to the American people and to build support for a long term, longer term participation in Ukraine reconstruction. The Marshall Plan is justly celebrated as being fundamental to Europe's reconstruction after World War Two. But it wasn't guaranteed that Congress would even approve the Marshall Plan. There was a bipartisan effort to get it through and a very strong effort to talk to the American people about it. No less needs to happen now. We published our report in June. A lot has happened since then. A donor conference, a NATO summit. And now to talk further about these issues, lead a conversation and bring us up to date. I'd like to hand the floor to our colleague, Ambassador Charles Reece.

Charles Ries

Thank you. Thank you very much. Abu Dhabi, the main. Call on our. Our. Panelists to come up. Natalie. Natalie Gyroscope. General Doug Lute and Bob Zoellick. Come on up. Have a seat. Before I introduce them, I just wanted to say that it's our intention following this discussion and with such a knowledgeable. Such a knowledgeable. Audience. Both here and online. We will have a question and answer, period. For those of you watching. On. Zoom. Please place your questions in the chat. And Gaby three, who was just part of a with Howard describing the report, will aggregate those questions and ask. Them on your behalf. And the people. Of course, here in the room will ask you to to say something. So it's now my great pleasure to introduce our distinguished panel and to discuss the issues associated with Ukraine's recovery. Now, you've seen their link, their extensive bios and links in our invitation to this event. I'd just like to mention a few relevant accomplishments of each of the panelists. To my immediate left, a minister, Nathalie Jaczko served as Ukraine's minister of finance from 2014 when the Russian seizure of Crimea and parts of Eastern Ukraine began until 2016. From 2017 to 20 and 23, she served as executive director of the Puerto Rico Financial Oversight and Management Board, overseeing strengthened budgetary practices, financial reporting and transparency in the context of Puerto Rico's debt rescheduling and. Recovery from Hurricane. Irma and Maria. Ambassador and Lieutenant General, Retired DeGroot has had a distinguished Army career. He was director of operations for CENTCOM. He was director of operations for the Joint Staff. And in 2007, President Bush appointed General Lute as assistant to the president and coordinator for the wars in. Iraq and Afghanistan. He was the only senior White House official retained into the Obama administration, and particularly on South Asia at that time. And he was named ambassador to NATO in 2013 and served until 2017, including during the first phase of the Ukraine war. I'm sure he'll have a lot to say about that. And Doug is now chair of for International Defense Practices for the BGR Group and CEO of Cambridge Global Advisors, LLC. And finally, Ambassador Robert Zoellick, who mentions the alphabetical presentation, as that is the last form of discrimination. It comes last, but is certainly not the least. As I mentioned earlier, Bob, I worked closely with Jim. Dobbins in managing the. European aspects of the fall of the war and many other things. When Bob was counselor and then undersecretary of State for economic affairs in the Bush 41 administration, I had the pleasure of working briefly with him as well. In the context of the G-7 ambassadors. Eric was U.S. trade representative from 2001 to 2005 and Deputy Secretary of state from 2005 2006, and president of the World Bank Group from 2007 and 2012. He's now a non-executive chairman of AllianceBernstein Global Investment Management Group and senior fellow at the Belfer Center at Harvard Kennedy School. And both before I in our first economic minister to Ukraine's independence. It was Natalie. That's right. Thank you very much. So let me start a panel discussion by asking each of you for your overall take on a report that we capture the important issues or the recommendations sound. So let me start with you, Natalie.

Natalie Jaresko

So I think the report was very timely and very sound. I take away from it just a handful of key things to start off. One is the focus on security being an absolute precondition for everything else. I think we often jump to what reconstruction will look like. Reconstruction really cannot succeed in full and lesser security, and I think that that point came out very successfully. I think it's very valuable to take lessons learned not just from other wars, which in many cases is, as the report says, are not applicable because of the state of civil society and democracy being so well-developed in Ukraine as compared to many war zones. But I think the addition of lessons learned from other disasters and experience in Puerto Rico, my experience in Puerto Rico tells us there is an enormous amount to be learned in terms of looking at reconstruction post-disaster, not just postwar. I think the emphasis on coordination and again here the report does quite a good job on talking about the need for stronger international coordination, but also mentions, if you haven't seen it, the need for coordination at the Ukrainian level, within the Ukrainian government in terms of actionable projects and actionable reconstruction. I think the one area maybe that I would. Disagree. There has to be something. Is having a special age. I think we should not have a special age for Ukraine. I think establishing a new bureaucracy didn't necessarily work for Iraq. I also think that if the purpose of our desire to have an inspector general is to to defend against, to stop, to mismanage, to avoid mismanagement, fraud, corruption in Ukraine, an IG is after the fact, and that will accomplish none of those tasks. And so what we need to look at look at instead is the use of technology, the use of mapping and reporting to including potentially blockchain to ensure that with with the technologies that are available that we're getting the money to the intended recipients, that we're tracing it in real time, and that if there's ever a sign of anything, which I hope there will not be in civil society in Ukraine, is adamant that there should not be and they will be fighting on the side of cleanliness and transparency, that we get it on a timely basis, corrected, and we don't wait five years for report to come out and have an audit that no longer can change the path. Those are my my key takeaways.

Charles Ries

Thank you very much, Bob.

Robert B. Zoellick

So first, if you'd permit me, I'd like to my. There's no don't mind about that. No, that's okay. All right. Since since Jim Dobbins, who was a he contributed to this report, passed away recently and was a friend for of mine going all the way back to 1989 when he was deputy assistant secretary in the European Bureau. And we worked on all the events of the turmoil of of the end of the Cold War, including German unification. But, you know, Jim was a person who, when I knew him, was seen as the classic European host. One of his first assignments was working for Sergeant Shriver in Paris, where he had the extremely difficult assignment of being youth liaison with the young people of Paris. But this was 1968. It was kind of a revolutionary moment. But, Jim, you were recognizing his fortitude, put on his beret and drank some wine and did his job extremely well. So he was someone who, during my era, we thought would could only serve in countries where you could drink the water. We then started this whole different career with Somalia and Haiti and Bosnia and Kosovo and Afghanistan, which too I think his credit and appreciating Rand he was able to memorialize in a series of very important books only for if there was a set of would be young foreign Service officers. He also wrote a book called Foreign Service, which I think is a should be really foundational reading for anybody going in the Foreign Service, because you get a real sense not only of a career, but one thing that really distinguished Jim was while he was he was excellent in the field and a good analyst. He was extremely rigorous in terms of his integrity, of trying to analyze policy and solve problems in a very practical way. So he wasn't just an analyst. He managed to do it with an extremely dry wit, which sort of eased some of the sharp edges that you would otherwise encounter. And he was the sort of person who, if you had to be in a diplomatic foxhole, would be the one you would try to choose. So he was a wonderful friend and I his career at Rand and even this report is a wonderful combination, I think, of that. So on the record, what I wanted to just add, Charlie, is to set a little bit of the context. I think that this report is critical in trying to underscore that we're in a war of attrition and it's natural in any combat, as General Lute knows, that people focus on the military side. It's like kids with the soccer game. They all go towards the ball. And we decided, well, whether we have tanks or F-16s or other military equipment, and that's very important. But the economic side of a war of attrition is equally important, and it hasn't gotten the same degree of attention. And this is the question in a war of attrition, whether under this theory, the war of the West will break and the will of Ukrainians will break. And so it's not only a question of survival for Ukraine today. And as Nathalie knows, you take about $3 billion a month has to come to sort of sort of keep simply keep the lights on. But it's a question of sort of morale and focus for the future that one can try to figure out how the timing of this now is also important. Well, we have to be honest. I think we're going to face a winter of discontent here in the Ukraine war. People's expectations for the offense was probably unrealistic. It's going to be slow, sluggish progress. The munitions supplies that are coming to Ukraine are too slow. We've been giving equipment too slowly. And so not surprisingly, it takes a while to integrate. That is, as again, General Lute would sort of know. And so we're in a period where and frankly, my own view of that, the NATO summit was miscast to be very frankly, I think it focused on a zero sum issue of NATO's membership, and it should have focused on a lot of issues that are relevant to sort of war fighting capacity and support over the next couple of years. But we are where we are. And so I think the question will be. Whether you can have a another counteroffensive on the economic side. And I think the reconstruction, some other ideas that Larry Summers and Phil Zelikow and I have pushed about getting Russian reserves into this process could be very fundamental in changing the set of of expectations in this war of attrition. Now, one other point that Charlie mentioned and the RAND report mentioned, people always refer to the Marshall Plan. And 99 times out of 100, it's a misapplication. And it means lots of money from the United States to serve whatever sort of purpose is to be accomplished. In this case, as they explain, it probably does fit reasonably well. And we can talk a little bit about that, but it takes a while to set up. The Marshall Plan, took a year between the speech and sort of activity. So, frankly, one of the things that I hope this report will help create some momentum is that the G-7 and NATO countries and all the partners and allies by the end of this year should be pushing an initiative on this economic recovery and reconstruction front that recognizes the nature of the true campaign in Ukraine. And I hope this report will help do that. A couple other sort of minor points that I want to draw on the report, because I just I heard the opening, but the organization matters. Okay. And this is not only the U.S. government organization, but I was president of the World Bank. The World Bank has a lot of experience with this. The ECB has the the European Bank for Reconstruction and Development, the European Investment Bank. You're going to have the European Commission, the European Union. You've got aid agencies. It is absolutely critical the way that this be put together. And here again, I think the Marshall Plan had an interesting sort of lesson with the creation of the European Cooperation Administration, which actually coordinated and went out of business and also works that are closely with the private sector. So organization matters critically. Obviously, you have to have Ukrainian ownership as part of this process as you would in any development case. Expect course corrections. None of these things ever go right, just as in battlefield. In terms of the economic process, cooperation with neighbors is absolutely critical. So whether it's Moldova, Romania, Bulgaria, Poland, how do they fit into this process? There's better and worse ways to mobilize capital, as you mentioned in the report, and this depends on phases. So, for example, we're now in a survival phase. There needs to be a quick recovery phase. You've had displaced about 13, 14 million people, some of them going to other countries, some of them inside. What's going to happen if the women and the kids are living in Poland and Germany and the men decide, well, we just that's not a bad place to go. Maybe we'll go there. So can you do things that would help with shelter, with schools, with medical support so that people come home and similarly sort of keep the economy sort of running in some fashion? Congressional and public support, which you said at the closed with, is absolutely vital. You told the story of the Marshall Plan. You know, you'd have to be blind and deaf and dumb not to recognize that this is now an issue with the Congress. This is going to have to be a major responsibility. The administration, frankly, I'm suggesting one way they could pick up $300 billion and I don't know why they haven't done it. The one other point that I want to flag that isn't in the report, but I pick up from other discussions. We're in a tension in the North-South economy now. I was talking recently with the head of the IMF, Christina Georgieva, a former colleague. She's just gone to the G20 meeting in India. All the issue, the help that the United States and Europe and Canada and Australia, some others have tried to have for Ukraine leads a lot of people in the south to say, Hey, we get people killed all the time in Ethiopia. And by the way, this put a lot of pressure on us in terms of food prices, in terms of energy prices, different types of stress. By the way, you want us to spend a lot of money on climate change at the same time. This is going to be a big issue that Europe and the United States are going to have to figure out how to remove some of the tensions that have developed in the north. So which not surprisingly, Russia is trying to play on. And by the way, this is one other little idea. The notion that Summers and Zelikow and I have come up with the use Russian assets to provide a claims process for other countries that have been hurt by this warfare, and maybe that's not a bad way to sort of broaden out the coalition. So as you look towards and fund meetings in October, the administration ought to be thinking about how to do this. So. I didn't. And thanks very much. There's a lot in there. And we'll we'll be talking about it. Doug, what about you?

Douglas Lute

Well, a couple of points. We are. Yeah, I don't think so. I'm looking for the magic button. Thanks, Natalie. Yeah. Okay. So. So much has already been said about the report. I'd like to just highlight that I, too, connected with Jim Dobbins sort of on the field of friendly strife here, both in the Balkans and then later on Afghanistan. And we will miss his voice. We will miss his his sort of instinct and his curiosity for getting things right, not only in Washington at places like Rand and the State Department, but also in the field in the most difficult circumstances. So Tim will be missed to the report. I think the report's very important right now because we're in the midst of a fixation on the military fight and we tend to discount that there's a war beyond this war. There's there's a second major phase of this war, and it's the reconstruction. It's the post-conflict fight. It could be just as decisive. It will prove, I think, even as decisive as the military conflict. So it's important to think about the war after the war. And the report highlights that. I think one of the key findings, as others have already mentioned, is this notion of what might be referred to as a security threshold. That means in my in my view, sufficient security to allow the politics of Ukraine to revert to normal or something more like normal beyond martial law. Right. And sufficient security to allow reconstruction and so forth to begin to take place. And the. strategy here is that he can he can lose the first war if he can win. The second. That's the long war strategy of Vladimir Putin. If he moves a fractured, divisive, destroyed Ukraine in the wake of the first phase, he can stay in. He can still dominate Ukraine. Right. So it's it's just as important that we focus on the second phase as the first phase. And by the. Way, you know. Our track record here in terms of following up and having persistent attention and sustaining attention after the fighting is done is. Not great. So I think we really have to contend with this notion that there is a second phase and that that's Putin's strategy. He's losing the first phase. His army is being destroyed in the battlefields in Ukraine. But the second phase is is equally important. And then this question of coordination is important. You know, I have a sort of a personal experience with czar. Okay. And we should beware. This is our government czars. You know, it sounds great. I remember my five year old daughter when I was at one time called the czar or something. Figured that that made her a czarina. Right. And that's like, I can imagine putting out a good phrase for Ukraine. But the point is that. We. Frequently appoint a czar for that and so forth. But we don't really get ourselves organized, too, as Bob and Natalie would suggested, to coordinate things here in Washington. Right. But then more a more important globally as well. And if we're not careful, we will bureaucratized our approach to the second fight. Frankly, I think in somewhat bureaucratized phase one, the current fight by way of these incremental military assistance packages and so forth. Right. We've bureaucratized this in an unhealthy way. And phase two, the second fight lends itself to to bureaucracy as well. So we have to be really careful about that. And our our track record here in terms of czars is not great. So I think we need to put a lot of thought into that. And a czar appointed today. Well, look, so czar, like a year from now in the face of a presidential election campaign. So how does that work across the 20 2014 or 2024 election cycle?

Charles Ries

Thanks very much. Just to speak on the czar from the standpoint of how we looked at it, we were looking at the seed. Coordinator back in. 1991, 92, and first first one of which was Larry Eagleburger. And the secret to that, I totally agree with you that they're way, way overused is the proposition of sort of a coordinator or special envoy or whatever. But in the seed case, the seed coordinator had control over the money and also. Had what they call. In. Congress notwithstanding. Authority. That is to say that he could use money in ways that were otherwise exceptional from the standpoint of the legislation of the agencies. And that got the attention of the agencies. But it was the secretary of state at the time, something he did. It did devolve to a to an official at the levels of the State Department. But as long as they controlled the money, the hearts and minds of the interagency would come along and a little bit more easily. So let me go back to you, Bob. Could you talk a little bit about if there is this use, I suppose people aren't talking so much about the seizure of the 300 billion of Russian assets now, but they're talking about the use of this. Of the of the assets to jumpstart the reconstruction of Ukraine. How would you see that working? How would it how would it be managed with. That's a big checkbook. How would decisions be made about how it was used and the records and all the other issues associated with that? So let me again start with some context, because I think before you dive into policy, it's good to have the overview when we're Larry Summers and Phil Zelikow and I agreed to write this article on foreign Affairs. Larry made a comment that in some ways catalyzed it, which is in all our government experience. And Larry and I covered different administrations over some 30 years. Rarely do you come across an idea that is strategically sound, good policy, politically appealing and ethically correct. So that's a good starting point. Okay. The second point is that. There's a certain elegant justice to the notion that Putin starts a war, leads this destruction, but he leaves his reserves in countries that can capture it and use it. You got to find that appealing. On the third point, which has not been stressed as much, but I think is important is as a as a former diplomat and negotiator, I'm always looking for other variables to put in play. Okay. We've got the military variable. We've got the battlefield. If we can access 2 to $300 billion through escrows and trust funds, it's not going to all be spent right away. And Ukraine couldn't take that money. Maybe you have other claims for other countries, but it becomes something that maybe if you get to the point where you have to negotiate a settlement, could help with Ukrainian politics, maybe, who knows? If even Russia agrees to back off, it could help. I'm not forecasting that. But as a diplomat, I look for other tools that I can sort of use in the process. Now, the two big issues are sort of the international law issues, which has international domestic. And does this hurt the dollar issue? Okay. And without sort of getting, you know, sort of too wonky about this, but we've stated in different points is that there's a principle in international law called countermeasures, and it's different than a sanctions paradigm. It was established, I mean, in there's people who know, law knows there are often international law commissions. There was one in 2001 that sort of wrote up this principle. It was accepted by the U.N. sort of General Assembly. So it's got a heritage to it. And by the way, it was used in 91, 92 for Kuwait. So the United States, Britain, France, transferred Russian assets to an escrow fund that was used for a claim spread Iraqi assets through a claims process that I think was over ten or 11 countries. It wasn't just Kuwait. So you have a you have a precedent which lawyers often sort of liken this model as well. So the notion of countermeasures does have limitations. It has to be an especially egregious act. But we certainly have that as determined by U.N. General Assembly resolutions and International Court of Justice findings. It has to be proportionate. You have to give notice. By the way, Rutan has actually tried to use this authority against German and Finnish businesses. So we've already got him starting to to use the process. It's only focusing on state reserves. This is not going after the oligarchs funds, which does raise various complicated sort of private sector and constitutional sort of issues. And then you have a situation where people say, well, what about sovereign immunity? What they're misunderstanding is sovereign immunity, including under the US law. The Foreign Sovereign Immunities Act is designed to prevent private parties from taking governments to court in the United States or in other actions for allegedly wrongful acts. This is a state action. It's state to state. It's never going into the court system. Some people say, well, what about constitutional rights? It's been a while since I've been law school. I didn't see Russia under constitutional rights in the United States. And frankly, there are Supreme Court findings that this is not a viable issue. So then you get to the domestic law question in here, you invoke something called IPA, which was passed in 1977. It's the Emergency Economic Powers Act. And this interesting you use the word has the authority to transfer because of an amendment in 2000. One seizure would require actually being at war, but transfer does not. And there is a Supreme Court decision to that effect. So you got that legal issue. But if there's any doubt, fine. Let's ask Congress to pass something. And you already have bipartisan bills in the House and the Senate, which, by the way, would support your suggestion that you get the Congress behind this action as opposed to sort of leaving them in the side. Then this leaves the question about the dollar. And one reason why military and I both wrote this is we've had some experience in financial markets. He was the secretary of Treasury. I was at president the World Bank. And remember, the idea is to do this with your partners. So this would involve the euro, the pound, and frankly, most of the reserves are actually in Belgium now and they're sort of held in the euro. So that's a very important sort of principle. But the second one is I think there's an overwrought anxiety here about whether people will not hold dollars. Having dealt with this for 30 years, if you're not going to hold dollars, you have to hold something else. Okay, What do you want? Crypto renminbi. Renminbi, struggling in about 2% so people don't hold dollars out of friendship for the United States. They hold dollars because they earn. Run them through our current account deficits. And it's a liquid appealing market. They want them for macroeconomic stability. Would you have some more people hold gold? Probably, yes. You can already see that in the process from the freezing. But gold isn't exactly a liquid instrument. And remember, 90% of foreign exchange transactions are all conducted in dollars. 59% of reserves are in dollars. That's down from 70% around 2000. By the way, the gap was made up with not China, but Canada, Australia, some other sort of middle income allied sort of countries in the process. So I think the dollar concern is frankly overwrought. But then I guess where we could spend this is that when I talk to people in the administration who find out 70 ways not to do something, there are two thoughts. One is, do you think the American public or the European public are going to agree to give this money back to Russia? Does that sound politically realistic to you? If not, why not use it through an escrow for various types of purposes? And the other sort of, frankly, political point in this process is you're actually strengthening the international law system. I mean, what we're talking about here, if at the end of the day, we say countries cannot use U.S. dollar reserves if they have blatant aggression against their neighbors, that's okay with me. Okay. Even if they don't use the dollars. So there's an irony here, which is there's a small sea conservatism, including our government on this as well as others, that it's it's almost like some combination of international lawyers and bankers say, oh, we can't upset the system. You started out with 8990, okay? And we use the example. All the stuff that you talked about came out of the time when I was working with Baker and we were moving forward the agenda. And when you have an issue like this, if the U.S. is going to lead, you have to shape the agenda. Frankly, we've teed up something that if you had a policy person with some spine would say to the lawyers, there's a good argument here. There may be arguments. On the other side is FDR said, get it done. Okay, well. Thanks for that, Bob. I'd like to turn we our report as as Howard and Gaby explained talked about from the standpoint of economic policy and for that matter, security policy. We think that Ukraine should have agency, that Ukraine should have a leading role. And I'd like, Natalie, to talk us through some of the, if you will, postwar economic policy challenges that the.

Howard Shatz

Ukrainians.

Charles Ries

Will face related to management of their financial sector, infrastructure, agriculture and so forth. Give us a feeling for kind of what is the debate that's kind of under the surface of the wartime economy now.

Natalie Jaresko

Thank you very much. And Ukraine definitely should have and does have agency and has been working to prove that over the last 500 and some days, despite many other views in the marketplace. I think when we talk about reconstruction, there are kind of four more things that we need to have in place. One is a concept. And a vision. What are we rebuilding? We're not rebuilding what we had. In fact, reconstruction. Rebuilding is probably not the right term. Renewal is probably a better term. And Ukraine has outlined that vision. And that vision starts with EU accession. It's building a European economy. It goes on to stress democracy. It is a decentralized democracy. And you have to keep this in mind because it comes in later as to how you organize things. It is a green country, meaning they want to rid themselves of the Soviet legacy of inefficient energy as well as pollution. And they have an opportunity to do so with green steel, with green hydrogen, with less fossil fuel usage. And they want to build a digitized digital economy. They want to take advantage of the extraordinary leapfrogging that they've done in technology to further leapfrog, whether it's in fintech, whether it's in moving to a cashless economy, or whether it's in digitizing their government services, which, by the way, has a great effect on reducing corruption. If you're never dealing with a bureaucrat and you're doing everything online. So the concept, the first of my forces is, is in place. We can envision the kind of Ukraine built for humans. Again, when you think about urban design, very important, not Soviet cities. The Ukrainians have had agency and they've put this out there. You've seen it at multiple conferences. They talk about it all the time. It's available if you want to look at Ukraine recovery conference websites. The second is capital. And I think Bob Larry Summers and fills out those arguments are really critical. Where's the money going to come from? Well, I actually don't have a doubt that this will happen. It's not happening fast enough. But I have no doubt, as you said, Bob, that we're not going to give the money back to Russia. I actually don't even believe Russia thinks they're getting the money back. I think they moved on. And so I think that money's available. I think our international financial institutions will be there for Ukraine. In terms of the EBITDA, EIB, DFC, Alphabet Soup, IFC and so on. And I think that bilaterally countries will pitch in. Most importantly, I think Ukraine is intent on getting the private sector to the table and all the reforms that have to get them there. And I think that private sector element is critical. If, again, you go back to concept technology. GREEN the only way to bring that to be is the private sector. That innovation can only come from the private sector. So I'm not so worried about the concept. I'm not so worried about capital coordination. We talked about a much more worried about coordination, and I'm less enthused about whether it's a permanent agency or a coordinate in the State Department. Any of those things would be fine with me. I'm much more focused on Ukraine, what that coordination in Ukraine will look like in the sense that in a decentralized government and I had this experience in Puerto Rico, a lot of powers devolved down to the local governments, and local governments don't always have the capacity. And so how you determine which projects are of national priority and why, what that criteria is, it shouldn't be political, it shouldn't be something personal. How do you define the criteria as to what is national and what is local? How do you coordinate? If you have an education system who we build schools where on the basis of what demographic forecast, on the basis of what refugee return policies, even if schools are local and being built locally, we have to have an education policy that wraps together both demographic return of refugees as well as whether we're building, you know, schools for I.T, for math, for language like foreign language labs. What is our policy? What are we. Ukraine has just adopted English as the second language, whereas in the process of doing so. So what does that mean about schools and how do you fit in with universities and pedagogical universities, the teachers that are necessary for those schools? You don't want to build schools that don't have teachers. And so I think the coordination, the third C is really critical. And on the Ukrainian side, there's still an enormous amount of work to be done as to how to define that prioritization, how to have the underlying national policy for what happens locally. And then we get to the fourth C, which is I think is probably the most critical mass capacity. And the capacity to develop projects on the ground. So if the Japanese want to rebuild 100 schools, the rumor has it. And they're giving the money to the UNDP to implement. Are there 100 school projects that have been developed with land rights, with architectural standards that meet EU standards of accessibility and hygiene and and and other and energy qualifications? Ukraine hasn't adopted the EU regulations for building. So right now, every project needs to be done with under Ukrainian building standards. But for every project that's built under Ukrainian building standards, when we get to that EU Ossetian chapter, it will be in conflict. So secondarily, we need to organize ourselves to say, okay, these are urgent, you know, views, FEMA categories A and B, life preserving recovery is ongoing today in Ukraine, and there's no reason to wait for EU standards and there's no reason to wait for local governments. This is a national priority to rebuild in, for example, liberated territories, the life preserving infrastructure that's necessary, or after a series of bombings all winter to keep your electricity on, you do whatever it takes nationally to keep the lights on. And Ukraine would did very well with that. They actually not only kept the lights on, but started exporting electricity again within months. How do we prepare for the winter season, which could be colder than last year, and we will be bombed if we don't have the proper air defense and if we don't get the F-16s, if, if and if so, how do we prepare for that? That's a national policy. You do it now, but for the longer term, we're going to need to do a lot more coordination. It's going to need to be sector specific, and they're going to have to be priorities. All the money will be available at one time, and you don't have the capacity to do everything at one time. So which are the priorities in terms of schools? If, for example, your priority is return of refugees, where do you want them to resettle? And then you need to pair that again in the coordination with small business programs. I'm really glad you brought enterprise funds into the mix. I am. I led the Enterprise fund in Ukraine, Moldova and Belarus, a little bit of Belarus for about 15 years in Ukraine, Western Alliance Enterprise Fund, that kind of impact investment fund, as well as blended finance opportunities where you take the public monies and you do some first loss and or other mechanisms to bring private sector money in are what are going to need to be directed to the priorities. But the Ukrainians need to then have those lists in the energy sector, in the housing sector, across geographies coordinated with, unfortunately, demining. Because you can't do this until you demand. In many areas, a third of the country has been mined. 200,000 square kilometers the size of Austria. How do we then prioritize that across food security for the world? Russia has just said they're not going to renew the export corridor. Fine. That means that the transport corridor to Europe has to be one of the absolute top priorities. Because even if Russia comes back later today and says they will extend what happens next time and the next time, the lessons learned is that the economy is a political tool for Russia. We should diversify away from it now. So how do we how do we make that border a priority? How do we change the rail gauge so that the shipment can be more of ease and efficient on and on and on? But you have to literally have someone thinking across geography, demographics, big picture. The concept, the vision isn't enough. And so I think for Ukraine, which has shown itself to be very resilient as an economy, the banking sector has not stopped for a day. We see the government, with the support of Western allies, able to deliver government services every day from pensioners to IDP, internally displaced people to the medical system to emergency services. When a building is bombed, you know, they're there immediately in every town across the country. They've shown themselves to be resilient. How do we take that resilience and now plan a path that can actually implement the concept that requires very detailed coordination and capacity at the ground level?

Charles Ries

Thank you very much. I want to get to questions from the audience, but let me just wrap up by asking Doug to say a little bit about the NATO's summit last week. And also in talk about coordination, we sometimes see people talk about the Ramstein Process, where a lot of the allies have put people on the ground in Rammstein to help facilitate the flow of supplies. If you could say something about both of those, so I'd appreciate it. Sure. So last week in Vilnius, Lithuania, NATO's held its typically.

Howard Shatz

Annual, sometimes every other year.

Charles Ries

NATO's summit and 75 years of Naito. Next year, 75 years, every summit really has only one deliverable, one desired outcome, and that is unity, cohesion and the vehicle to cohesion is compromise. So what you got out of Vilnius last week was a series of compromise outcomes.

Douglas Lute

Right?

Charles Ries

They achieved unity. But when you look at any one of those individual outcomes, they're not very satisfying to include the one having to do with the NATO's future relationship with Ukraine. Part of the security threshold that we talked about in the last round, right, probably has something to do with not only the current fight on the ground, but also what is Ukraine's relationship down the road eventually with Naito. And for those who have studied this, you appreciate that for the last 15.

Howard Shatz

Years, since 2008.

Charles Ries

NATO's had a policy position that Ukraine will be a member then. This did not really move us off that mark. It was not an advance on the state of play. And in fact, the communique language was that when everybody agrees. Right. And conditions are met, then we'll talk about membership. And that's really not anything more than we've had over the last 15 years. So it's quite old house, quite unsatisfactory or unsatisfying with regard to Ukrainian membership. But I think we must to some extent, we, as Bob said, with the kids soccer game, you know, where everyone gravitates around the ball. Now, we we missed an opportunity here. We had an opportunity in Vilnius last week to say more about the current fight. What can we do before membership, before that? Right. Ukraine's got to win this fight with all of the rest of this is, you know, just blah, blah, blah. Okay. And we didn't get much further on that on that mark last week. We missed opportunities. So, for example, you came out of Vilnius and Russian forces that strike Ukraine with long range precision weapons from Russian territory and from the Black Sea via the Black Sea Fleet limited in sanctuary. I imagine Ukrainians do not have the capability to fight back. And that being said, nothing on that front. The U.S. is still I guess we're now talking about this long range precision missile system called the attack EMS. It's an acronym. Don't worry about it. And we're just talking about it's just the next bureaucratic increment of support, as though we have all the time in the world to provide the support Ukraine needs to actually win this fight. And we can get on to the enormous task that Natalie has outlined in Ukraine. It's so frustrating as a military professional to appreciate that we're penny packaging this support to Ukraine and the delivery by way of the rhythm stone process, which is where some 50 countries come together on a monthly basis and and assess the Ukrainian request list and then they figure out who's going to provide what. And typically, they provide too little, too late. That's been the history of the last 18 months. The most important thing that could be potentially useful coming out of Vilnius last week is not the natal meetings. It's the G7 meetings at the G7 meeting committed to those seven largest economies on a bilateral basis, signing assistance agreements with Ukraine that codify the kind of support that has happened over the last 18 months. So what I'm going to watch carefully in the coming weeks and months is first to sign the bilateral agreement with Ukraine and what exactly is promised. And we'll see. But the short my shorthand experience on these things is it's easier to sign those communiques than it is to actually do them right to actually implement them. So implementation here will be key. And and in particular, I'll be watching the G7, the G7, the G7 agreements. Thank you very much. Who knew that the G7 would be a core of the defense relationship? So, you know, seven is more agile than 31 July, that's for sure.

Howard Shatz

So that's for sure.

Charles Ries

All right. Well, to quote Doug, we don't have all the time in the world. So I'd like to ask a question from the audience. And is there is there a microphone? Roving microphone. Process. It will come from here. Anybody? Yes, right here in the front row, second row. Introduce yourself, please. Yeah. I'm Don Kersh. I'm a veteran of the Cold War, of German reconstruction, Balkan reconstruction and attempts to get the EU to be more cooperative. It's great that you've done this, study this forward thinking. However, my question really is how do we bring this war to an end? Because the Ukrainian counteroffensive has been disappointing some thus far. I'm worried about their military resources over time. And what do we do for Russia in terms of any incentives or disincentives to bring this war to an end so we can start the process that you so ably have outlined? Thank you, Don. Thank you. I mean, the shorthand is give Ukraine what it needs to win and we know what Ukraine needs to win. And we have not yet provided it or if we have provided it, we provided it six months too late. And and unfortunately, the Ukrainian military and the Ukrainian.

Howard Shatz

Citizenry, the.

Charles Ries

People of Ukraine are paying the price for this bureaucratic, incremental approach to military support. So I would get on with it and let's give them what they need to win. I mean, you mentioned the Ukrainian offensive. Look, we organized, trained and equipped nine Ukrainian brigades, Right. Which are supposed to be the heart of the fist.

Howard Shatz

Here in the.

Charles Ries

Ukrainian offensive. By and large, the assessment is they haven't yet been committed. Right. The challenge here is that they were organized, trained and equipped over just the last few months. They're riding on vehicles that are brand new to them for which they don't have the sustainment required. And they're attempting the most difficult task, tactical task in ground combat, which is breaching fixed obstacles. If I were a U.S. brigade commander, right, so a U.S. counterpart to one of these brigades we just formed, I would train for six months with my brigade on equipment that we've owned and operated for years before going to the National Training Center. And being defeated repeatedly in the same task, right. In training, in a training environment. And when Ukrainians have don't have any of those advantages, it's a hodgepodge of equipment, too little artillery. Not enough combat engineer support to beach the minefields and so forth. So it's not surprising tactically that this has not taken off, as maybe some of us expected. So the short answer is give them what they need and let's get on with this. So let me complement this with a strategic diplomatic perspective. So I agree with everything that Doug said about the military side and the need to provide Ukraine with more more quickly so they can. He is successful in their offense, as they might be, but we're in a world of huge insert gear. Where to? What will happen by the end of the year? What will happen six months after that? Which then brings us back to where I was trying to go by putting more variables in the table. Okay. Number one, I have to have an economic variable to keep Ukraine alive. Okay. Number two, I'd like to have some economic variables to help strengthen Ukraine. Number three, I'd like to have some economic variables to sell Putin. You will not win a war of attrition against Ukraine. Okay. Now, what does that leave? Could there be some settlement? I don't know. Okay. It might end up being like North Korea. Okay. Now people talk about cease fire. Of course, as you know, North Korea has an armistice. Never had a peace settlement. But look at then where the economics came in for South Korea. South Korea became stronger. It became a successful democracy. It had additional ability to defend itself with its partners. Okay. So that's one possible scenario. Now, another scenario is that because of events in Russia, which we frankly can't foresee, that Russia decides maybe with some effort by China, which is not a high probability. But if I were running U.S. diplomacy, I've been working this angle a little bit more as opposed to having a new historic confrontation with China. And then I would try to see whether maybe there's something that could lead Russia back. Okay. Now, in that environment, might I also have some things that could also ease it for Russia, which, by the way, I've got $300 billion I'm trying to play with. Okay. But so we don't know now. But the point is, when you have fast moving events and I'm using the 8990 event, you know, in the start of 89, even November 89, who expected we be able to unify Germany, NATO? We did. But it was certainly no sure thing. But we had a lot of pieces they were trying to move. If you take Doug's point on military, Natalie's point and mine on sort of economics, we're too slow putting the pieces on the table. Okay. And I would also say, and this will be a topic for discussion for people, is that you need to have some sense ultimately what your strategic objective is. When I've asked people in the administration, they won't answer this question. Okay. So my strategic objective is a economically successful, secure, democratic Ukraine linked to the European Union on an accession process as part of the transatlantic community. Now, I know that doesn't get everything that some people may want. I didn't exactly say where the borders are. Okay. But that's a strategic objective that I think serves U.S. interests. And by the way, I'm speaking for the U.S. here, not just Ukraine. Okay. So those are the sort of issues that we have to be engaging on as we watch each day's sort of news process in this report. To its credit, is trying to prod one aspect of that debate that has been missing.

Natalie Jaresko

Just to add, you know, we've done the same thing in sanctions that we did with the military. We've done this in small, tiny bits and pieces. Our strategic objective was much too limited, which was to deny the Russian military capability. We never intended for sanctions from the very start to to hurt the Russian economy, quote unquote. And by not having secondary sanctions in place and having the whole Global South, as Bob mentioned, not aligned with us in this process, we have a very strong Northern Alliance, but we have a very weak global south. We have really not had the effect of sanctions even in our limited get a limited objective because everybody is able to to avoid them through China, through parts of former Soviet Union, through India and otherwise. So if we really want this to end all of the tools and Bob said, you know, a whole diplomatic way, everything has to be put on the table. We shouldn't have 75 sanction packages. I think we're number 18 right now. I would like it to be 19 and done and then bring that bring that elements to the end.

Charles Ries

There's a slogan for your 19 and done. I know I have a lot of questions in the room, but I'd like to ask Abby because we have more.

Howard Shatz

People online than we.

Charles Ries

Do actually in this crowded room. So would you say something about some of the questions you're getting from the online audience? What is proportionate?

Gabrielle Tarini

Sure. We've got a very timely question from Voice of America on Russia's withdrawal from the Green Deal. So how will Russia's withdrawal from the Green Deal affect food security in Ukraine and in the world? And what can the West do now to help Ukraine still earn incomes from agricultural export?

Natalie Jaresko

So first of all, I don't see it having an effect on Ukrainian food security. Ukraine's food security is well in hand, even notwithstanding and despite the mining farmers have farmed and planted this season without a substantial decline from last season. So Ukrainian food security is not an issue. Global food security is at issue, and it is up to, at this point narrow the G7 and in particular Turkey to determine whether or not they can do what Turkey has suggested it might do, which is to provide convoys for the security of the export while doubling down on exporting through the European border by rail and by river to get more and more food out. I don't think that we should be negotiating with Russia swift transactions for their banks. We should not be giving them anything. I think we should stand our ground. In fact, the last few months when this was in place, the Russians were not inspecting ships at a rate that was convenient for export. And, you know, it was not functional functioning the way it should have in the first place. So I think we should find an alternative, multiple alternatives to ensure global food security. And we should let the Global South know that Russia is using this without any care for their food security.

Charles Ries

Right. And so I just want to keep trying to put this each of them in a in a diplomatic context. Okay. So as I do everything Natalie said, but then I would certainly reach out to all the global South countries and make the point about what Russia is trying to do to harm them. I would go to China and I would say China. Do you think it's a good idea that food supplies are being reduced to poor countries, or do you think maybe you should join with us in some such process? By the way, all these ideas with China would work better if we had a relationship with China. But that's a different question. And then also, at the end of the day, this would actually give an opening. And the idea about the $300 billion in reserves to say, look, this war has hurt a lot of poor countries as well. We need to have a principle basis for them to also make claims because of these dangers. And so get them to support the transfer of Russian assets. So what I'm trying to say is, in each one of these situations, I don't mean to be too critical. The U.S. is I think, you know, President Biden has tried to keep native together. He's tried to sort of take the right position against some. And the United States is trying to get the support from Congress. But we're always about a half step behind. We're not trying to think about how we can actually move the pieces on the chessboard to our advantage. Where to reactive. Thank you very much. One question over here. Thank you very much. My name is Matthew Murray and I teach at Columbia University. And I also do project work on good governance and anti-corruption globally, including in Ukraine. And so I've been honored over the past 18 months to be working with the Ministry.

Howard Shatz

Of Digital Transformation under USAID and state grants to.

Charles Ries

Help them design the post-victory digital state of Ukraine, which in which they hope to change the culture of governance in Ukraine, frankly. And they have very high ambition. And it's laudable. And what we're about is trying to help them design the business processes and back office that will support this going forward. So the question is. Around. The missing pieces on the table. And I'm wondering.

Howard Shatz

If the panel agrees that one of the missing pieces on the table economically is the capacity for economic governance within Ukraine, not here, but within.

Charles Ries

Ukraine. And what we could be doing more to make sure that that economic governance capacity exists now and is being built now so that we're not suddenly, you know.

Howard Shatz

Faced with a huge and bigger capacity problem when we're when we're in the position to win the peace.

Natalie Jaresko

No, Matthew, I'm not really sure what you mean by economic governance. I would not agree that economic governance does not exist in Ukraine. It certainly does. Even that digitalization has been going on for eight years. It started with electronic procurement on an open source platform so that every government, including local governments, could afford it with no licensing fees. It eliminated not only a massive amount of costs and corruption, but it also gave access to small businesses, foreign businesses to bid on contracts. It involves GEO, which is the platform I referred to earlier. We don't have that in the United States, and I don't know that any maybe a Baltic countries, any European country has the ability to get all your documentation online, your pensions, and you never have to deal with humans, which, you know, I just moved back to the mainland of the U.S. for the first time in 30 years, and this has been an experience.

Charles Ries

I wish someone would answer the damn phone.

Natalie Jaresko

Exactly. I think when I think about the biggest risk to economic governance, what I would say is it's rule of law and judicial reform. It's not something that can be resolved through digital technologies, frankly. It can be resolved by making that one of the priorities in EU accession. One of the priority chapters should be judicial reform. Remember, Ukraine is an enormous country, so to do judicial reform is not changing 100 judges. It's thousands, tens of thousands of judges in systems. And the way Eastern Europe did that moving from communism, they did it by being pulled into the EU system. Ukraine has had 30 years to try and reinvent the wheel. We've created an entire parallel system in terms of anti-corruption under IMF prospects. So we have an anti-corruption prosecutor, an anti-corruption court, an anti-corruption bureau, and an anti-corruption agency. But it doesn't flow into this society as a whole. It's a separate little parallel path trying to show that they're putting people away for corruption. And it's happening. People are being arrested, tried and imprisoned. But it's not enough to change what I would call the critical issue, which is contract enforcement. You want to have confidence in the system for both local investors as well as foreign investors, that any court I go to, I will get a fair hearing. It's best. It's the most basic thing. When I meet with the tax official, I will get a fair hearing. And if not, I will then go to court and I will get a fair hearing if there's a dispute. So the judicial reform for me is the crux of the piece of economic governance that we need to focus on. And we haven't for 30 years. We focused on changing the communism to capitalism. We focused on the form of ownership, privatization certificates, a land reform. We focused on ownership. But that means nothing when you don't have rule of law, contract enforcement and a court. So I think right now, if there was one thing to do, it would be to focus all efforts on judicial reform. And given EU accession being the path, it would have to be done with the Europeans in that context.

Charles Ries

So I want to draw this out a little more, Charlie, just because a and it's an area where I think Rand can follow up in a very constructive way. What you've just picked up in this soliloquy is the sensitivity on the Ukrainian side for people that have their back against the wall, people like Natalie, who courageously sort of pushed reforms that recognize that this is an issue, but they also don't want it to become an excuse not to do things. On the other hand, and again, I'm an American, I'm not a Ukrainian American. People have to recognize you have 40 years of underperformance here as an economy and you had serious corruption problems. Ukrainians don't like to hear the word corruption because they're afraid it's a Russian ploy to undermine their support. We need to understand the sensitivity, but we also need to understand the nature of the problem. Natalie knows what I was at the World Bank. I tried a couple of times to try to see working with the Germans or the U.S. or even the Russians at a point to try to sort of put this on a different path. We also and this is where Rand could come in. The the world has changed in Ukraine, frankly. A lot of the oligarchs had their authority in power in the eastern sort of sort of industries that have now been rebel. And so that's going to change their power structure. You've got an experience with a decentralized system on security and including the use of technology and other things like that. So on the one hand, we need to press Ukrainians to be honest about the fact that the under-performance and corruption is a potential serious problem we have to get at. On the other hand, when Ukrainians say look at when they bridle at this, we need to understand the origin of that. And and this comes back to Natalie. You know, people have done heroic things. Natalie's one of them. One of the ones that she mentioned to me she didn't mention here we have a huge Ukrainian diaspora in the United States and Canada and elsewhere, including judges and others. Maybe we could link that in. Notice how Hong Kong had British judges for a while, So maybe there's some other options we could be more creative with here to deal with the judicial system. Well, as you can see, there are a lot of issues.

Howard Shatz

Here and it's a fantastic panel and integrate.

Charles Ries

Description of all the things we do. And we could spend another couple of hours, but our time.

Howard Shatz

Unfortunately, is coming to an end and.

Charles Ries

It's my great pleasure to bring back Barry about. It closes out.

Douglas Lute

Thanks a lot.

Barry Pavel

Thank you. Thanks a lot, Charlie. And wow, what a really insightful discussion I was. My hand is tired from taking and typing a lot of notes, so really appreciate the sort of granularity in the strategic frame, too, from all of our panelists. We heard today about the both the security and the economic aspects. As Doug Lute said, the first fight and the second fight. And I think that's a really interesting way to put it. As you might expect, Rand. Is looking. At all aspects of the ongoing conflict to help policymakers across the coalition to better understand what could be done in the in the coming months. And these. Issues are wide. Ranging from escalation lessons learned to impact so far of the war on Russian recruiting, military recruiting and retention, Russian logistics and sustainment failures, Ukraine's civil based resistance actions, and a lot more. So these are publications that are coming from Rand in the in the coming months. And so, you know, even though this is clearly going to be a long and challenging road, I do think based on this discussion, there really isn't a moment to lose to get some of the core issues such as reconstruction. Right. And I just learned so much from the panel discussion and from the really excellent report by. By. Gabby Howard and their and their colleagues. So thank you all. Very much for joining. Us. Thanks again to the really great Decor Bacon House. This is a really fantastic venue. And to our our. Fantastic panelists today. And please remain engaged everyone in these issues. Ideas are needed and the urgency and the importance are really high. So thank you all very much.