Group of 20 finance chiefs and central bank chiefs from top economies met in Indonesia Friday for talks on the fallout from Russia’s invasion of Ukraine, with the host warning them failure to tackle energy and food crises would be catastrophic.
The two-day meeting on the resort island of Bali started under the shadow of a war that has roiled markets, spiked food prices and stoked breakneck inflation, a week after Moscow’s top diplomat walked out of talks with the forum’s foreign ministers.
In her opening remarks, Indonesian Finance Minister Sri Mulyani Indrawati called on ministers to work together with a spirit of “cooperation, collaboration and consensus” because “the world is watching” for solutions.
“The cost of our failure is more than we can afford,” she told delegates. “The humanitarian consequences for the world and for many low-income countries would be catastrophic.”
Top global finance figures, including US Treasury Secretary Janet Yellen, will discuss the rebound from the coronavirus pandemic. But the impact of the Ukraine war –- weighing on an already brittle global recovery –- will top the agenda.
A day before the meeting, Yellen set the tone, calling Russia’s war in Ukraine the “greatest challenge” to the global economy and saying members of Putin’s government “have no place” at the talks.
“We are seeing negative spillover effects from that war in every corner of the world, particularly with respect to higher energy prices and rising food insecurity,” she said.
Yellen is expected to press G20 allies for a price cap on Russian oil to choke off President Vladimir Putin’s war chest and pressure Moscow to end its invasion while bringing down energy costs.
Both Russian Finance Minister Anton Siluanov and Ukrainian Finance Minister Serhiy Marchenko are participating virtually in the meeting.
Yellen in April led a multinational walkout of finance officials as Russian delegates spoke at a G20 meeting in Washington. No communique was issued at the end of that meeting.
It is unclear if a similar walkout will take place at this meeting, after no foreign minister walked out last week, but Yellen would not be drawn on if they would repeat their joint action.
There is also unlikely to be a final communique issued when talks end on Saturday because of disagreements with Russia.
World Tax Overhaul Deadline Set
G20 chair Indonesia -– which pursues a neutral foreign policy –- has refrained from uninviting Russia despite Western pressure.
Italy and Canada’s finance ministers are in attendance, but Chinese Finance Minister Liu Kun and Britain’s new Finance Minister Nadhim Zahawi are only attending virtually.
International Monetary Fund chief Kristalina Georgieva will appear in person after saying Wednesday the global economic outlook had “darkened significantly” because of Moscow’s invasion.
European Central Bank president Christine Lagarde is participating virtually, but World Bank chief executive David Malpass will not attend.
The meeting is a prelude to the leaders’ summit on the Indonesian island in November that was meant to focus on the global recovery from the Covid-19 pandemic.
Other issues to be tackled by the ministers include digital financial inclusion –- with more than a billion of the world’s population still without access to a bank account -– and the deadline for an international tax rules overhaul.
The Organisation for Economic Cooperation and Development (OECD) will present the ministers with an update on the progress of international tax changes that will set a global minimum corporate tax rate of 15 percent by 2024, a year later than originally planned.
The deadline for the passing of legislation underpinning the new rules was set at mid-2023, the OECD said.