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G20 finance meetings in Bali overshadowed by war in Ukraine

Indonesia’s Finance Minister Sri Mulyani Indrawati (Pool via AP)
Indonesia’s Finance Minister Sri Mulyani Indrawati (Pool via AP)

Financial leaders of the Group of 20 economies agreed at meetings on the Indonesian resort island of Bali this week on the need to jointly tackle global ills such as inflation and food crises, but failed to bridge differences over the war in Ukraine.

As G20 host this year, Indonesia has sought to bridge divisions between G20 members over Russia’s invasion, but enmity over the conflict was evident even as the finance ministers and central bank chiefs concurred on other global challenges that have been worsened by the war.

All involved agreed the meeting took place “under a very challenging and difficult situation because of the geopolitical tensions”, Indonesian finance minister Sri Mulyani Indrawati said.

She said delegates had “expressed sympathy that Indonesia has to manage this situation”.

Ms Indrawati and Indonesian central bank governor Perry Warjiyo said Indonesia would later release a G20 chair’s statement that would include two paragraphs describing areas where the participants failed to agree.

There were still issues that could not be reconciled, “because they want to express their views related to the war”, Ms Indrawati said.

In the statement “related to the war there are still views that are different within the G20”, she said.

Ms Indrawati outlined a range of areas where the members did agree, including the need to improve food security, to support the creation of a funding mechanism for pandemic preparedness, prevention and responses, on working toward a global tax agreement and on facilitating financing of transitions toward cleaner energy to cope with climate change.

Indonesia G20 Finance Ministers Meeting
South African finance minister Enoch Godongwana and US treasury secretary Janet Yellen (Pool via AP)

“The progress is more than expected,” Mr Warjiyo said.

With inflation running at four-decade highs – US consumer prices were up 9.1% in June – Mr Warjiyo said participants were “strongly committed to achieving price stability”.

“There is a commitment among the G20 to well calibrated macro economic policy to address inflation and slowing growth,” he said.

The meetings in Bali follow a gathering of G20 foreign ministers earlier this month that also failed to find common ground over Russia’s war in Ukraine and its global impacts.

During the talks that began Friday, US treasury secretary Janet Yellen condemned Moscow for “innocent lives lost and the ongoing human and economic toll that the war is causing around the world”.

“Russia is solely responsible for negative spillovers to the global economy, particularly higher commodity prices,” she said.

Canadian finance minister Chrystia Freeland likened the attendance of Russian officials at the meetings to having “an arsonist joining firefighters”.

War is waged by economic technocrats, as well as generals, she said in a post on Twitter.

Russian officials reportedly blamed Western sanctions over the war for worsening inflation and food crises.

Ms Indrawati said the closed-door G20 talks did not include discussion of proposals for a price cap on Russian oil – one of Ms Yellen’s key objectives as the US and allies seek to curb Moscow’s ability to finance its war.

Indonesia G20 Finance Ministers Meeting
Delegate members listen as Indonesian Finance Minister Sri Mulyani delivers her speech (Pool via AP)

Such discussions would have occurred on the sidelines of the meeting, she said.

The Bali talks saw more progress than an earlier G20 finance meeting in Washington in April, when officials from the US, UK, France, Canada and Ukraine walked out to protest the attendance of Russian envoys. That meeting also ended without the release of a joint statement.

Caught in the middle as host, Indonesia has urged officials from all sides to overcome mistrust for the sake of a planet confronting multiple challenges.

“The world needs even more and more collaboration. No matter what country … they cannot solve this problem alone. Food security, energy, climate change, pandemic … all are interconnected,” Ms Indrawati said.

“We all agreed we need to continue the spirit of collaboration and multilateralism,” she said.

Indonesia G20 Finance Ministers Meeting
The meeting of G20 leaders will take place in the autumn (Pool via AP)

The meetings also addressed the problem of mounting debts in countries like Zambia, Myanmar and Sri Lanka.

While the G20 is “not a creditor forum, there is a recognition that there is growing debt”, Ms Indrawati said.

The talks centred on a framework to enable creditor and debtor nations to work out solutions to help countries in need.

“When a country has a debt that is unsustainable they have to communicate with their creditors,” she said.

“This mechanism needs to be more predictable. That is what we have been discussing within the G20.”