The President of the World Bank David Malpass has warned that Russia’s invasion of Ukraine could potentially impact the global economy, including Russia itself.
Appearing on CBS' “Face the Nation” on Sunday, Malpass said the invasion could affect the Russian ruble and as a consequence, the people of Russia.
“So one thing to watch is the ruble that really affects the Russian people. They’ve been having a hard time. You know, this is a tragedy right now for Ukrainians, for the neighbors of Ukraine, but also for Russians,” Malpass said.
“Their per capita income has fallen below China’s. So as you think about the sanctions, it hits the banks and Russia, but apparently not the oil and gas industry. But if they go, if they’re able to stop the Central Bank of Russia from operating, that would really have an effect on Russia and the people,” Malpass added.
Multiple countries around the world, including the European Union, Japan, Australia, New Zealand, and Taiwan have imposed sanctions on Russia amid the Moscow-led invasion.
Previously, Biden has announced sanctions against some of Russia’s largest state-owned banks, Russian sovereign debt, and elite members of Russian society with close ties to Putin.
Malpass on Sunday said that the ongoing conflict could also impact the global economy, driving up the cost of energy and food, prices of which have already increased around the world as inflation levels have skyrocketed.
The president of the World Bank noted that the cost of energy and food was “already at a point of fragility because inflation really hits the poor.”
“This is going to drive up energy and food. We can wait and see what Russia does, what China does. Right now China’s buying more from Russia and allowing the sanctions to be eroded or circumvented a bit. We'll have to see where that goes as well. A big thing is the U.S. can supply a lot more if it puts its mind to it.”
While the United States has thus far stopped short of targeting Russia’s energy sector in its sanctions, White House press secretary Jen Psaki said on Sunday that “on the energy sector, no option is off the table.”
However, Psaki noted that Biden’s sanctions are “designed to harm Russia’s economy, not our economy,” while also noting that such sanctions to the country’s energy sector could “actually benefit President Putin and pad his pockets because, given high oil and gas prices, cutting off Russian oil and gas could drive prices up to Putin’s benefit.”
Malpass said Sunday that the invasion of Ukraine could result in a short-term upward pressure on things like liquefied natural gas that is exported from the United States to Europe, but noted that while Europe would need a lot more, “it’s available.”
“Markets look forward so they can look at the five-year time horizon and realize that there’s a lot of energy available if it’s mobilized, there are alternatives to the Russian dominance of the gas market, for example. And so whether those changes are made will be important,” he said, noting that Iran’s nuclear activities and how “quickly is it going for nuclear weapons” also play an important role as the country is also a source of oil for the world.
