Bengaluru: US seeks to strengthen sanctions against Russia and would like to see strong condemnation of its war against Ukraine and its impact on the global economy, Treasury Secretary Janet L Yellen said on Thursday.
Yellen, who is here to attend a key G20 meeting, also stressed on additional support for the war ravaged Ukraine.
“I believe the communique is still under discussion, certainly we would like to see a strong condemnation of the war, the impact it has had on the Ukraine and the global economic outlook, it is one of the most significant factors that is reducing growth and causing very negative spillovers, especially for low income countries,” she said.
She said, “We very much want to see the IMF negotiate an agreement to lend to Ukraine….it is something we will emphasise in our discussions.”
Yellen was speaking at a press conference ahead of the First G20 Finance Ministers and Central Bank Governors (FMCBG) meeting under the G20 Indian Presidency scheduled on February 24 and 25 here.
“Of course in meeting in which we will participate in G20, I have always expressed my own and US’ point of view that Russia’s behaviour is not only a clear violation of international law and unprovoked hostility,” she said, adding it is one of the leading factors shaping the global outlook with respect to food, energy, and harming the global outlook generally.
It is something, she said, she will emphasise in her meetings here.
“We have ongoing work on sanctions, working with our partners, we are seeking to strengthen sanctions and make sure we address violations of sanctions…”
Yellen also noted that Russia’s economy has become increasingly isolated and the impact of sanctions against that country for war against Ukraine is being seen.
“Since the early days of the war, we have partnered with a multilateral coalition of over 30 countries to impose severe economic costs on Russia for its brutal assault. Our twin goals are to degrade Russia’s military-industrial complex and reduce the revenues that it can use to fund its war. We are seeing the impacts of these actions,” she said.
Pointing out that the Russian military is struggling to replace over 9,000 pieces of heavy military equipment that it has lost since February 2022 and it has suffered production shut-downs at key defence-industrial facilities, she said, “Further, Russia’s economy has become increasingly isolated. Estimates indicate that nearly a million Russians may have left the country last year. This is putting downward pressure on its productive capacity going forward.”
The Treasury Secretary also felt it’s critical that the IMF move swiftly toward a fully financed program for Ukraine – as they have said they will do. “Continued, robust support for Ukraine will be a major topic of discussion during my time here in India.”
Observing that US’ economic assistance is making Ukraine’s resistance possible by supporting the home front: funding critical public services and helping keep the government running, she said, in the coming months, we expect to provide around USD10 billion in additional economic support for Ukraine.
When Russian President Vladimir Putin launched his brutal assault one year ago, some believed Russia would secure a quick and decisive victory over Kyiv. Putin himself thought he would win “at minimal cost,” she said recalling CIA director Bill Burn’s words.
“One year later, Putin’s war has been a strategic failure for the Kremlin. Ukraine still stands. And NATO and our global coalition stand united behind it.”
Responding to a question on concerns about China’s deepening ties with Russia and her message to China, Yellen said, “With respect to sanctions and aid to Russia, we have made clear that providing material support to Russia or assistance with any type of systemic sanctions evasion would be a very serious concern to us.”
“We would certainly continue to make it clear to the Chinese government, and to companies and banks in their jurisdiction about what the rules are regarding our sanctions and the serious consequences they would face for violating them,” she added.
Earlier in the day, Union Finance Minister Nirmala Sitharaman met Yellen here and held discussions.
The Treasury Secretary said the global economy is in a better place today than many predicted just a few months ago, and the outlook has improved.
She also stressed on the need for working together to ease the debt overhang that is holding back too many countries.
“While there are significant headwinds, it’s fair to say that the global economy is in a better place today than many predicted just a few months ago. In the fall, many were worried about a sharp economic slowdown across the world. The challenges we face are real, and the future is always uncertain. But the outlook has improved since we gathered in the fall,” Yellen said.
Pointing out that in December, the United States and its coalition partners implemented a cap on the price of Russian crude oil, and earlier this month they placed caps on the prices of Russian refined products like diesel and fuel oil, she said, so far, we see clear signs that our policy is working to reduce Russian revenues and stabilise global energy markets.
Emphasising the need to work together to ease the debt overhang that is holding back too many countries, Yellen said, the IMF estimates that around 55 per cent of low-income countries are close to or in debt distress.
“I will continue to push for all bilateral official creditors, including China, to participate in meaningful debt treatments for developing countries and emerging markets in distress. Most urgent is the need to provide debt treatment to Zambia, and to commit to specific and credible financing assurances for Sri Lanka.”
