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G20 finance chiefs made few political breakthroughs at Indonesia meeting

G20 finance chiefs made few political breakthroughs at Indonesia meeting

NUSA DUA, Indonesia, July 16 (Reuters) – The finance chiefs of the Group of 20 major economies pledged on Saturday to tackle global food insecurity and mounting debt, but made few political breakthroughs amid divisions over Russia’s war in Ukraine at a two-day meeting. in Indonesia.

As questions mount about the effectiveness of the G20 in addressing major global problems, US Treasury Secretary Janet Yellen said disagreements prevented finance ministers and central bank governors from issuing a formal statement but the group had a “strong consensus” on the need to address the deepening food security crisis.

Host Indonesia will issue the President’s statement instead. Finance Minister Sri Mulyani Indrawati said most of the issues were agreed upon by all members except for certain statements about the war in Ukraine. She described it as the “best result” the group could have achieved at this meeting.

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Western countries have imposed tough sanctions on Russia, which says it is carrying out a “special military operation” in Ukraine. Other G-20 countries, including China, India and South Africa, have been more muted in their response.

“This is a difficult time because Russia is part of the G-20 and doesn’t agree with the rest of us on how to describe the war,” Yellen said, but she stressed that the disagreement should not prevent progress on pressing global issues.

The Russian Finance Minister almost attended the meeting while his deputy attended in person. Ukraine’s finance minister nearly addressed the session as he called for “stricter targeted sanctions”.

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Sri Mulyani of Indonesia said the fractured G20 presidency had been “too overwhelming” due to the war in Ukraine, and all members agreed that food insecurity required special attention and called for the removal of trade protectionism that prevented the flow of food supplies.

The Group of Twenty will establish a joint forum between the ministers of finance and agriculture to address the issue of food and fertilizer supplies. A similar forum has been set up for finance and health ministers for pandemic preparedness.

Analysts said the failure to agree on an official statement reflected the weakness of the once-powerful economic rally.

“We are at a rudderless moment in the global economy, in which the G-20 has been paralyzed by Putin’s war, and the G-7 has been unable to drive global public goods,” said Kevin Gallagher, chair of the Center for Global Development Policy at Boston University.

G20 members met at the start of the pandemic, but initiatives to cushion the shock to the heavily indebted poor countries have failed to produce significant results.

US Ambassador to Japan Ram said that Western countries, concerned about the lack of transparency in lending to China, are pressing Beijing to restructure debt contracts and transform its role into a “(contributing) role in the state rather than that of indebtedness and slavery.” Emmanuel. 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% of emerging and developing countries – and 60% of low-income countries – were in or close to debt distress. Read more

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“The debt situation is rapidly deteriorating and there must be a well-functioning mechanism for debt settlement,” she said.

Sri Mulyani said the G20 also encouraged further progress in implementing the Common Framework for Debt Addressing after the Debt Service Suspension initiative in a timely, orderly and coordinated manner.

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

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Additional reporting by Stefano Soliman in Nusa Dua and Lee Thomas in Paris. Editing by William Mallard, Kanupriya Kapoor, Tom Hogg and William Mallard

Our criteria: Thomson Reuters Trust Principles.