KYIV, Ukraine — U.S. Treasury Secretary Janet Yellen made a surprise visit to Ukraine Monday, in which she reaffirmed America's support for the country and announced $1.25 billion in economic aid for things like schools and hospitals.
The money is the first part of a new $9.9 billion package of civilian aid for Ukraine as its war with Russia enters a second year.
"Our funds help pay for emergency personnel: from firefighters who answer the call when missiles strike to medical professionals who treat sick and wounded civilians," Yellen said at a Kyiv school that the United States helped rebuild after Russian shelling broke most of the windows and doors last spring.
Last month, Ukraine's government said it faced an almost $25 billion budget shortfall since Russia invaded the country in February 2022, particularly after making income taxes optional during wartime. Various ministries have struggled to cover expenses without foreign support.
"Our salaries have stayed the same throughout the war, in large part thanks to the Americans' support," high school chemistry teacher Lara Chuvikina told NPR. The U.S. also funded a bomb shelter and elevator at the school.
"We want our students to return to normal," Chuvikina said.
As well as visiting the Ukrainian school, the U.S. Treasury chief met with Ukrainian President Volodymr Zelenskyy and the country's prime minister, Denys Shmyhal.
Her visit came a week after a surprise appearance in Kyiv by President Biden — both trips signaling the administration's continued support for the country.
Yellen said the United States has provided about $50 billion to Ukraine in military, economic and humanitarian aid over the past year.
"Just as security assistance bolsters the front lines, I believe that this economic assistance is fortifying the home front, thereby strengthening Ukraine's resistance," she said.
Yellen stopped in Kyiv on her way home from a prickly meeting of Group of 20 nations' finance ministers in India. Several large economies including India, China and Turkey have refused to join U.S.-led sanctions against Russia. Over the weekend, China declined to sign onto a G-20 declaration condemning Russia's invasion.
During her remarks Monday, Yellen noted that sanctions remain an important tool to counter Russia's "military-industrial complex," but acknowledged that Russia buys many goods secondhand through neutral countries.
That makes manufactured goods like microchips, which are vital for manufacturing weapons, relatively easy to acquire in Russia. And microchip imports into Russia have increased dramatically in the past year, according to research from Elina Ribakova, deputy chief economist at the Institute of International Finance.
1/ Russia substantially increased chip imports in 2022, past the pre-war peak. The value of chip imports is up from $1,8 bn recorded for Jan-Sept 2021 to $2,45 bn over the same period in 2022. pic.twitter.com/oBAWRzIazU
— Elina Ribakova 🇺🇦 (@elinaribakova) January 30, 2023
Yellen said that sanctions evasion would be a priority for the Treasury Department in 2023, but did not provide many details about how to tackle it.
She also refused to answer questions about whether the U.S. would levy sanctions on China if it exported weapons to Russia, following U.S. Secretary of State Antony Blinken's remarks on CBS News that Beijing is allegedly considering supplying lethal support to Moscow.
"Our coalition of over 30 countries has mounted the swiftest, most unified and most ambitious sanctions regime in modern history," Yellen said.
While the sanctions have been broad, observers note that many figures have still gone unpenalized for helping Moscow.
"There are Russian companies, oligarchs, and organizations contributing to the Russian war effort that the U.S. hasn't sanctioned yet," said Mykola Murskyj, director of government affairs at Razom for Ukraine, a U.S.-based human rights group.
Yellen touted U.S.-led efforts to place price caps on Russian oil and other fuel products. Yet some analysts say these measures have not had the desired effect.
"Clearly this is an insufficient incentive for Russia to end the invasion," Murskyj said.
