Treasury Secretary Janet Yellen predicted that the world will see “enormous economic repercussions” from the Russian invasion of Ukraine.
In prepared remarks delivered on Wednesday to the House of Representatives’ Committee on Financial Services, the Biden administration official began by affirming the importance of international financial institutions — such as the International Monetary Fund and World Bank — as “critical to addressing the challenges we face today,” such as recovery from COVID-19 and climate change.
Condemning Russia’s invasion of Ukraine as “an unacceptable affront to the rules-based, global order,” Yellen said that the conflict would “have enormous economic repercussions in Ukraine and beyond.”
For one, global food security is threatened by disruptions in both Ukraine and Russia — which together control nearly one third of the planet’s wheat exports. “Russia’s invasion disrupted the flow of food for millions of people around the world and caused prices to spike,” Yellen said, explaining that financial institutions are “doing essential work to address both the short-term and long-term effects on global food prices and supplies” while “fast-disbursing budget support, financing to support domestic food production, and social safety nets.”
For another, Yellen argued that the Ukraine conflict highlights “the need for sustainable, affordable, clean, and secure energy for economic growth and security for the United States.” She noted that financial institutions are promoting “energy efficiency and capital investment in diverse energy sources — and away from suppliers such as Russia — toward solar, wind, and other non-fossil fuel-based energy sources” — a move that she claims “strengthens energy security and reduces short-term fossil fuel price risks, all while addressing the long-term threat of climate change.”
Yellen further detailed the aid offered to Ukraine by international financial groups — such as $1.4 billion in rapid financing from the IMF and $3 billion from the World Bank.
“President Biden has rallied over 30 countries, representing well over half the world’s economy, to impose swift, severe sanctions and export controls on Russia,” she said. “Treasury is also working collectively with our partners to block Russia from accessing benefits from IFIs. Both the World Bank and the European Bank for Reconstruction and Development (EBRD) had ceased approving new financing for Russia since the unlawful annexation of Crimea in 2014. Since the invasion, these institutions have announced further measures to prevent Russia’s and Belarus’ access to financial and non-financial assistance.”
Yellen’s speech came as the United States announced another $100 million in military aid to Ukraine. Since Russia’s invasion of Ukraine on February 24, the United States has invested more than $1.7 billion in security assistance toward the former Soviet republic.
“The world has been shocked and appalled by the atrocities committed by Russia’s forces in Bucha and across Ukraine,” Secretary of State Antony Blinken said in a statement. “Ukraine’s forces bravely continue to defend their country and their freedom, and the United States, along with our Allies and partners, stand steadfast in support of Ukraine’s sovereignty and territorial integrity.”