You're reading: Pritzker, US commerce secretary, calls existing sanctions against Russia ‘quite severe’

U.S. Commerce Secretary Penny Pritzker, the billionaire Hyatt hotel chain heiress who has the ear of President Barack Obama, said in Kyiv that she will tell her boss that Ukraine’s leaders are committed to change, but need more help.

In a brief interview with the Kyiv Post on Sept. 27, Pritzker said that
some more aid may be forthcoming – but more of a “granular” nature than any
grand-scale program.  

Pritzker is making her first trip to Ukraine, the ancestral
homeland of her great-grandfather Nicholas, who emigrated 133 years ago. Her
family is now among America’s wealthiest. “My family has been blessed to live
in a country that allowed us to start business and fulfill our dreams,” she
said, tying in her personal situation with Ukraine’s need to become more
attractive to foreign investment.

Frustration is high among many Ukrainians and others – including
even members of Obama’s Democratic Party in Congress — who believe the U.S.
could and should be doing more than the $1 billion in new loan guarantees and
$291 million in direct assistance that Pritzker talked about at an earlier
press conference.

“What I was optimistic about is that the requests were granular. It wasn’t rhetoric. It was: here’s what I need now; as opposed
to flying at 50,000 feet,” Pritzker told the Kyiv Post, recounting her meetings
with Poroshenko, other Ukrainian officials and business leaders. “They need
advisers in certain areas, technical assistance; tax or setting up a leasing
program, a commercial law development program … I am hopeful the
anti-corruption bill will pass.”

 But Ukraine should not expect more sanctions soon against
Russia.

“I think the sanctions have been quite severe and frankly
are having a significant impact,” Pritzker told the Kyiv Post.

However, sentiment for stronger sanctions against the
Kremlin appears to be building.

Some favor blocking Russian access to the international
SWIFT money transfer system – thereby crippling its financial system – and
taking other strong steps to drive down the price of Russian oil and natural
gas, which finance Russian President Vladimir Putin’s war machine. 

Also, some
in the West believe the aim of sanctions should be to drive Putin out of power. But this is not a view that Pritzker shares.

“The aim of sanctions is to get Russia out of Ukraine and to
get Ukraine on its own two feet. The latter requires peace and requires Ukraine
to do the tough work we’ve talked about on the economic front,” she said.

She said that she wants to wait and see the outcome
of peace talks between Poroshenko and Putin. “We need to give this peace
process a chance,” she said.

“Right now, the sanctions that have been put in place,
American businesses are paying a price as are European businesses,” Pritzker
said, stressing the importance of unity among allies.

“It is so important that we are aligned with our allies. The
Europeans. The Japanese. The Americans. Canadians, etc. We are acting hand-in-glove. It’s having an effect on
the Russian economy, on the Russian currency. That will affect the Russian
people, unfortunately. But the Russian leadership needs to understand that you
cannot willy-nilly violate the sanctity of another nation, its borders and
expect the world will turn a blind eye.”

During an earlier news conference at the Ukraine Crisis
Media Center, lawyer and British Ukrainian Chamber of Commerce president Bate
C. Toms asked Pritzker about the need for governments, including the American
one, to support business investment in Ukraine with risk insurance. Toms said
he didn’t think that much investment
would take place otherwise and estimated that Ukraine has lost $2 billion in planned investments because of Russia’s war against Ukraine.

Pritzker said that while no large-scale risk insurance is likely,
the International Monetary Fund, World Bank and others might be able to help.

The expectations from Pritzker’s visit, however, are low in
business circles since her department’s major thrusts are to promote U.S.
exports and to oversee economic regulations.

Her visit comes as fighting continues in parts of the eastern
Donbas between Ukraine forces and Kremlin-backed militants, despite a shaky
cease-fire plan.

Her two-day trip also comes as concerns mounts over the
shaky state of the Ukrainian economy, including a hrvynia that has lost half of its value this year alone. Major energy giants such as ExxonMobil and others
appear to be exiting, which could deliver a blow to Ukraine’s drive to wean
itself from Russian energy.

Moreover, continued fighting in the Donetsk and Luhansk
oblasts would make it difficult for electricity generating stations to get
coal, much of it in the Donbas, raising the prospect of power outages in the
winter. Additionally, Russia has shut off natural gas to Ukraine and bullied
such western neighbors as Hungary into not supplying Ukraine with
“reverse-flow” gas that originates from Russia.

Investment of the scale that Ukraine needs, however, may not
happen until the conditions are right, Pritzker said. 

At the news conference,
Pritzker – in response to a journalist who asked about the prospects of a grand
Marshall Plan aid program to Ukraine – called it an “interesting analogy.” But
she noted that the post-World War II program to rebuild devastated Europe,
required “not only economic support; but adoption of a tremendous number of
reforms for the economy to be more open for foreign direct investment.”

She told the Kyiv Post: “The time is now for economic
reforms. The president and prime minister are committed to taking action now,”

The U.S. will not turn away, she said, nothing
that Obama has spent most of his time on the Middle East and Ukraine issues in
recent months as a sign of America’s constant support.

Echoing the same message of many U.S. government officials
and politicians who have come before her, Pritzker said: “We absolutely stand
side-by-side with Ukraine as they’re going through this difficult time.”

Kyiv Post chief editor Brian Bonner can be reached at [email protected]