G20 finance chiefs resolved on food security; Ukraine war prevents formal communique

by Jul 15, 2022Business0 comments

G20 finance chiefs resolved on food security; Ukraine war prevents formal communique

NUSA DUA, Indonesia: The Group of 20 finance chiefs from major economies pledged Saturday (July 16) to tackle global food insecurity and rising debt but made little political progress amid divisions over Russia’s war in Ukraine at a two-day meeting in Indonesia.

With growing doubts about the G20’s effectiveness in tackling the world’s major problems, U.S. Treasury Secretary Janet Yellen said differences had prevented finance ministers and central bankers from issuing a formal communique, but that the group had a “strong consensus” on the need to address the worsening food security crisis.

The host country, Indonesia, will issue a chairman’s statement instead. Finance Minister Sri Mulyani Indrawati said most issues were agreed upon by all members, except for particular statements on the war in Ukraine. She described it as the “best outcome” the group could have achieved at this meeting.

Western countries have applied strict sanctions against Russia, which says it is conducting a “special military operation” in Ukraine. Other G20 nations, including China, India, and South Africa, have been more muted in their response.

“This is a challenging moment because Russia is part of the G20 and disagrees with the rest of us on how to characterize the war,” Yellen said but emphasized that disagreement should not impede progress on pressing global issues.

Russia’s finance minister attended the meeting virtually while his deputy attended it in person. Ukraine’s finance minister addressed the session virtually where he called for “tougher targeted sanctions.”

Sri Mulyani of Indonesia said that while chairing a fractured G20 has been “quite overwhelming” due to the war in Ukraine, all members agreed that food insecurity requires special attention and called for the removal of trade protections that impeded the flow of food supplies.

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The G20 will establish a joint forum between finance and agriculture ministers to address food and fertilizer supply issues. A similar forum has been established for finance and health ministers for pandemic preparedness.

Analysts said the lack of agreement on a communique reflects the weakness of the once-powerful economic grouping.

“We are at a rudderless moment in the world economy with the G20 paralyzed by Putin’s war and the G7 unable to lead on global public goods,” said Kevin Gallagher, who directs the Center for Global Development Policy at Boston University.

G20 members rallied at the onset of the pandemic, but initiatives to cushion the impact of heavily indebted poor countries failed to achieve significant results.

Western countries, concerned about the lack of transparency in China’s lending, were pressing Beijing to restructure debt contracts and transform its role into “one that (contributes) to the country rather than one of indebtedness and servitude,” said U.S. Ambassador to Japan Rahm. Emanuel. But they were frustrated that Chinese officials did not attend the meetings in person, making side discussions impossible.

Kristalina Georgieva, head of the International Monetary Fund, warned that more than 30 percent of emerging and developing countries, and a staggering 60 percent of low-income countries, were at or near over-indebtedness.

“The debt situation is deteriorating rapidly and there should be a well-functioning mechanism for debt resolution,” he said.

Sri Mulyani said the G20 also encouraged further progress in implementing the Common Framework for Debt Treatment beyond the initiative to suspend debt service in a timely, orderly and coordinated manner.

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She said there were discussions on how to make the framework more effective for countries in need.

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