G20 finance talks overshadowed by Ukraine war

BALI:

A two-day meeting of finance ministers from the Group of 20 major economies ended on Saturday in Indonesia without a joint communique, after Russia’s war in Ukraine divided the global forum.

During talks on the Indonesian resort island of Bali, the finance chiefs looked for solutions to food and energy crises, while accusing Russian technocrats of exacerbating
the problems.

US Treasury Secretary Janet Yellen, Australia’s Treasurer Jim Chalmers and Canadian Finance Minister Chrystia Freeland on Friday blamed the invasion of Ukraine for sending a shockwave through the global economy.

In place of a formal communique, there would be a 14-paragraph statement issued by Indonesia, the G20 chair’s Finance Minister Sri Mulyani Indrawati said in closing remarks.

She said there was consensus on most of the document but two paragraphs would focus on members’ differences regarding the war’s impacts and how to respond. “I think this is the best result,” she said.

At the beginning of the second day of talks, Indonesian central bank governor Perry Warjiyo called on ministers and global finance leaders to concentrate on recovery in a world economy reeling from the Covid-19 pandemic.

The meeting took place after the International Monetary Fund (IMF) slashed its global growth forecast, with another downgrade expected this month as US inflation stokes fears of a recession.

But the talks have been overshadowed by the Ukraine war after it roiled global markets, caused rising food prices and added to breakneck inflation.

The Kremlin calls the war a “special military operation” and blames retaliatory Western sanctions for blocking food shipments and rising energy prices.

Russian Finance Minister Anton Siluanov and Ukrainian Finance Minister Serhiy Marchenko participated virtually in
the meeting.

Russian Deputy Finance Minister Timur Maksimov attended the talks in person a week after Foreign Minister Sergei Lavrov walked out of a G20 meeting over Western criticism of the invasion.

Maksimov was in the room as Western officials expressed their condemnation, according to a source present there. Marchenko called for “more severe targeted sanctions”
against Moscow.

Indonesia has refrained from not inviting Russia from G20 meetings, including a leaders’ summit in November, even as Western nations repeated their calls for Moscow to be frozen out of the group.

Both Yellen and Freeland, who has Ukrainian heritage, said representatives of Russian President Vladimir Putin’s government had no place at talks.

Observers said the failure to agree on a joint communique would hinder coordinated efforts to solve rising inflation and
food shortages.

“The lack of a G20 finance ministers’ communique means it will be more difficult for the G20 to forge a consensus on vital issues in the fall,” said Eric LeCompte, Executive Director of Jubilee USA Network, an NGO that lobbies for developing nation debt relief.

“Internal divisions hinder the G20’s ability to act decisively and leave the world in uncharted waters.”

Yellen held bilateral meetings with counterparts from Indonesia, Saudi Arabia, South Africa, Australia, Singapore and Turkey, the Treasury said, lobbying their support for a price cap on Russian oil to cut off Putin’s war chest.

In response to the food crisis, the IMF, World Bank, World Food Programme, Food and Agriculture Organisation and World Trade Organisation also called for action in four areas.

 

Published in The Express Tribune, July 17^th, 2022.

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