Kristina Kvien: “The largest impediment to economic transformation is the continued need for further judicial reform”

16 May 2020, 00:01

How do you see the prospects of sanctions regarding the construction of Nord Stream 2?


 – The United States believes Nord Stream 2 would seriously undermine European regional energy security and provide Russia a tool to coerce Ukraine and other European partners. The energy security of our European partners and allies is a longstanding strategic priority of the United States. That is why the recently passed U.S. National Defense Authorization Act included sanctions against Nord Stream 2. These sanctions allow the U.S. government to, if necessary, make decisions to revoke visas and block property of identified individuals. Those involved with Nord Stream 2 construction will have to weigh the heavy consequences of the sanctions against moving forward with the project.

Could Ukraine become a partner for the U.S. in supplying LNG to Europe? What does it take?

– Ukraine’s post-Maidan energy sector inherited a legacy of inefficient state-owned enterprises and oligarchs using corrupt schemes to enrich themselves at the expense of ordinary people and the state budget. Despite the odds, Ukraine has made remarkable progress on reforming the energy sector since the Revolution of Dignity. Ukraine has passed and started implementing legislation that promises to create transparent energy markets in line with European standards. Once the implementation process is complete, it will enhance Ukraine’s integration with the rest of Europe and help create an environment that attracts investment and promotes economic growth. The United States is actively supporting Ukraine in this process.

Diversifying energy sources is critical to Ukraine’s energy independence. To that end, increasing Ukraine’s imports and storage of LNG can help strengthen its energy security. We will continue to work with our EU and Ukrainian partners to promote reforms of and capital upgrades to the Ukrainian gas transit system. The opportunities in the energy sector are immense. But to fully realize those opportunities, Ukraine needs to continue energy reforms, creating true market conditions that will attract and protect foreign investment while offering a level playing field. The United States, for its part, will continue to help Ukraine transform the sector into a modern, market-oriented engine of growth.

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What major U.S. economic projects are ready to be implemented in Ukraine in the near future? How do you see the prospects of installing Holtec’s small SMR-160 nuclear in Ukraine?

– The United States, through USAID, is undertaking a variety of projects to strengthen Ukraine’s economy. For example, a Financial Sector Transformation project is focused on improving financial service delivery for citizens and businesses. USAID also has several activities focused on supporting small and medium enterprises: one focuses on helping SMEs become more competitive both domestically and internationally; another supports agricultural enterprises to increase their productivity and access to markets; and a third works specifically with small and medium enterprises in eastern Ukraine to build their economic resilience. We are also promoting the development of competitive energy markets through a separate energy-focused project, which will ultimately provide Ukraine with affordable, reliable, resilient, and secure energy.

Our U.S. Foreign Commercial Service team actively assists U.S. companies interested in the Ukrainian market and local businesses interested in working with a U.S. partner. They also work with Ukrainian companies wishing to invest in the United States. These efforts benefit both of our nations’ economies and serve to strengthen and grow the bilateral trade relationship. The United States strongly supports the deployment of safe, reliable SMR technology to Ukraine. The many advantages of SMR technology, such as its relatively small size and reduced capital investment, provide tools to help improve Ukraine’s energy security.

We see pretty close cooperation in the defense field between the U.S. and Poland. Should the Ukrainian government pursue achieving a similar level of partnership? Is it possible at all?

– The U.S.-Ukraine defense partnership is strong and expanding. Since 2014, the U.S. has provided more than $1.6 billion in security assistance to help Ukraine defend its territorial integrity, deter further Russian aggression, and progress toward NATO interoperability. Recently, we welcomed Ukraine’s steps toward purchasing additional U.S. Javelin missile systems.

The United States and Ukraine co-host two annual military exercises: Rapid Trident, an annual, multinational exercise focused on situational training and field training, and Sea Breeze, a multinational maritime exercise held in the Black Sea to strengthen regional maritime security.

The U.S. also trains and advises Ukrainian security forces through the Joint Multinational Training Group-Ukraine to help improve Ukraine's internal defense capabilities. The U.S. is committed to continuing to closely partner with Ukraine in support of Ukraine’s sovereignty and territorial integrity – including the Donbas, Crimea, and Ukraine’s territorial waters. 

Do you see any danger threat of Ukraine becoming a "banana republic" in the economic sense and how can it be avoided?

– In short, no. Ukraine has a diverse economy and is working hard to attract foreign investment, and is making significant progress. We are encouraged that President Zelenskyy’s team has made a firm commitment to addressing critical economic reforms, such as land reform, energy liberalization, and privatization. There have been many significant economic reforms since the Revolution of Dignity – the return of central bank independence, pension reform, health reform, and much more – but the process is clearly not complete. The largest impediment to economic transformation is the continued need for further judicial reform. To achieve economic growth rates that would be truly transformative, Ukraine needs more foreign direct investors. Ukraine is making progress on this issue, but some potential investors are likely still deterred by the perception that Ukrainian courts do not effectively enforce contracts and protect personal, corporate, and intellectual property rights.

What are your priorities as CDA?

– I feel privileged to be serving as the interim head of the U.S. Embassy in Ukraine, and working closely with Ukrainian partners in the government and civil society at this dynamic time in the country’s history – politically, economically, and socially. 

The start of my term as Chargé d’Affaires closely coincided with the tragic crash of a Ukrainian flight near Tehran. It has been my solemn responsibility to lead the U.S. Embassy team in doing all we can to support the people of Ukraine at this difficult time. I’d like to commend President Zelenskyy and his team for their professional and effective response. We will continue to offer all possible support to the Ukrainian government in responding to this tragedy. The United States also stands in support of the people of Iran who are protesting their oppressive regime and fighting for their right to choose their own future.

This remains a deeply challenging time for the Ukrainian people due to Russia’s continuing aggression and violation of Ukraine’s sovereignty and territorial integrity. The United States remains steadfast in its support for Ukraine against Russia’s aggression; our Minsk-related sanctions will remain in place until Russia fully implements the Minsk agreements and withdraws from the Donbas. Similarly, our Crimea-related sanctions will remain in place until Russia returns control of the Crimean peninsula to Ukraine.

Meanwhile, the United States remains dedicated to promoting prosperity for the Ukrainian people through Ukraine’s transformation into a modern democracy, firmly rooted in the West. My team and I are focused on helping Ukraine to build strong and resilient democratic institutions; to reform the court system and improve the rule of law; to achieve economic and energy security; to level the economic playing field; and to confront those who refuse to recognize that the rules have changed. Ukraine’s prosperity depends on the government’s ability to foster an attractive investment climate by reducing corruption, increasing economic competition, and tapping into the entrepreneurial skills and creativity of the Ukrainian people.

Success will depend on sustained efforts throughout Ukrainian society – from the grassroots to those in business to the upper echelons of the government. And we’ve seen the Rada, the Cabinet of Ministers, and the Office of the President making fast progress to tackle some of these issues. The recent reboot of the Office of the Prosecutor General, for example, is a promising step forward. These efforts will take time, but the progress made in the past six months is truly impressive. Ukraine is clearly moving on the right track and in the right direction, and the U.S. will continue to provide our steadfast support and partnership.

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Kristina Kvien is a native of California, with a BA in Political Science from Occidental College and an MS in Strategic Studies from the U.S. Army War College. Previously, Kristina served as Acting DCM and Economic Counselor at U.S. Embassy Bangkok, Thailand; Economic Counselor at U.S. Embassy London; and Director for European Union, Ukraine, and Belarus Affairs at the National Security Council in the Executive Office of the President. Kristina has also served at U.S. Embassy Moscow, Russia; the U.S. Mission to the European Union in Brussels, Belgium; and the U.S. Embassy Manila, Philippines. At the Department of State in Washington, DC, Kristina worked on European Union issues and on bilateral relations with Slovenia. From 2016 – April 2019, she served as Acting DCM/Minister Counselor for Economic Affairs at U.S. Embassy Paris. She arrived at U.S. Embassy Kyiv in May 2019. 

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