G20 finance talks end divided as response to Russia dominates discussion

G20 finance talks end divided as response to Russia dominates discussion

A TWO-DAY MEETING of finance ministers from the Group of 20 major economies ended today without a joint communiqué after Russia’s war in Ukraine divided the global forum.

During talks on the Indonesian resort island 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, Australian Treasurer Jim Chalmers and Canadian Finance Minister Chrystia Freeland blamed the invasion of Ukraine for sending a shockwave through the global economy.

In place of a formal communiqué, a 14-paragraph statement is being 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 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. Marchenko called for “more severe targeted sanctions” against Moscow.

Indonesia has refrained from uninviting 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 leaves 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 Organization and the World Trade Organization also called for action in four areas.

“Support the vulnerable, facilitate trade, boost food production & invest in climate-resilient agriculture,” IMF chief Kristalina Georgieva tweeted late yesterday, summarising the call to action.

Members also discussed sustainable finance, cryptocurrencies and international taxation on Saturday.

Mulyani said “progress” was made on international tax rule changes that will set a global minimum corporate tax rate of 15% by 2024.

© AFP 2022

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