'Russia's economy has become increasingly isolated', says US Treasury Secretary Janet Yellen

US Treasury Secretary Janet L. Yellen on Thursday said 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,” Yellen said.

Speaking to reporters in Bengaluru, she said the Russian military is struggling to replace over 9,000 pieces of heavy military equipment that it has lost since February 2022. It has suffered production shut-downs at key defence-industrial facilities.

“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,” she added.

Yellen was speaking to reporters 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.

“As US President Joe Biden has said, we will stand with Ukraine in its fight for as long as it takes,” the Treasury Secretary said. “We commend our allies for stepping up their direct assistance. And we believe it’s critical that the IMF move swiftly toward a fully financed programme 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.”

“When Russian President Vladimir Putin launched his brutal assault one year ago, some believed Russia would secure a quick and decisive victory over Kyiv,” she said.

“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.