WASHINGTON – U.S. Treasury Secretary Janet Yellen will press multilateral development banks to channel positive net financing flows to countries hit with food insecurity prompted by the Ukraine war, she said in congressional testimony released on Tuesday.
Yellen, in prepared remarks to the House of Representatives Financial Services Committee for a hearing on Wednesday, said she will ask institutions including the World Bank and the African Development Bank to expand ways to address food security, “including long-term investments in agricultural productivity and agricultural infrastructure.”
The international financial institutions, including the International Monetary Fund, will play a critical role in addressing spillovers from the Ukraine conflict that are heightening economic vulnerabilities in many countries battered by the COVID-19 pandemic, she said.
“The IMF, World Bank, and EBRD (European Bank for Reconstruction and Development) will be critical partners in rebuilding Ukraine, alongside bilateral donors, and they also will provide vital support to neighboring countries welcoming refugees,” Yellen said.
The IMF has provided $1.4 billion in rapid financing for Ukraine, while the World Bank has provided $490 million in rapid financing for Ukraine, part of a $3 billion package of support planned in coming months. The EBRD has proved an initial 2 billion-euro package for Ukraine.
Yellen said this assistance has given Ukraine fiscal space to pay salaries for soldiers, doctors, nurses and civilian government employees while meeting its external debt obligation.
“These are admirable acts of credibility by a government under siege,” she said.
Yellen added that the multilateral development banks should promote energy efficiency and capital investments to help governments diversify away from fossil-fuel-based energy sources including Russia.
She said the Biden administration was seeking congressional authorization to provide financing to bolster IMF lending facilities for poor and vulnerable countries — the Poverty Reduction and Growth Trust and the new IMF Resilience and Sustainability Trust. – Reuters