Kristalina Georgieva and South Korean Finance Minister Choo Kyung-ho on the sidelines of the G20 Finance Ministers and Central Bank Governors Meeting in Nusa Dua, Bali, on Saturday. Associated Press
The Group of 20 major economies’ finance chiefs on Saturday pledged to address global food insecurity and rising debt, but made few policy breakthroughs amid divisions over Russia’s war in Ukraine at a two-day meeting in Indonesia.
IMF chief Kristalina Georgieva warned officials from the Group of 20 major economies to take urgent action to combat inflation, warning that the “exceptionally uncertain” global economic outlook could turn worse if higher prices persisted.
Georgieva, speaking at a G20 finance officials meeting, said Russia’s intensifying war in Ukraine had increased pressure on commodity and energy prices, and global financial conditions were tightening more than expected.
At the same time, pandemic-related disruptions and renewed supply chain bottlenecks continued to weigh on economic activity.
Pressure was mounting on heavily-indebted countries, and the debt situation was “deteriorating fast,” she said, according to a text of her remarks.
With questions growing about the effectiveness of the G20 in tackling the world’s major problems, US Treasury Secretary Janet Yellen said the differences had prevented the finance ministers and central bankers from issuing a formal communique but that the group had “strong consensus” on the need to address a worsening food security crisis.
Janet Yellen said she had productive meetings about a proposed price cap on Russian oil with a host of countries on the sidelines of a meeting of the finance chiefs of the Group of 20 major economies.
Yellen said her bilateral meetings and the overall G20 sessions in Indonesia focused on the human and economic cost of Russia’s invasion of Ukraine, with the United States and other countries “unequivocal in condemning their (Russia’s) shameful actions.”
The US Treasury Department said Yellen met finance leaders from Saudi Arabia, Australia, South Africa, Turkey, and Singapore. She also had dinner with Canadian Finance Minister Chrystia Freeland, a Treasury official said.
“On energy costs, I had productive bilateral meetings with over a half-dozen of my counterparts where we discussed the merits of a price cap and how it can help us achieve our goals of denying (Russian President Vladimir) Putin revenue for his war machine, while dampening energy costs,” Yellen told reporters outside the meeting venue.
She said a price cap was one of “our most powerful tools to address the high prices people are facing in America and around the world.”
Yellen said she also underscored the importance of taking action at the G20 to address the global food security crisis.
Yellen met Saudi Finance Minister Mohammed Al-Jadaan, Australian Treasurer Jim Chalmers, South African Finance Minister Enoch Godongwana, Deputy Prime Minister Lawrence Wong of Singapore and Turkish Finance Minister Nureddin Nebati, the Treasury said.
Host Indonesia will issue a chair’s statement instead. Finance Minister Sri Mulyani Indrawati said most topics were agreed by all members except for particular statements about the war in Ukraine. She described it as the “best result” the group could have achieved at this meeting.
“This is a challenging time because Russia is part of the G20 and doesn’t agree with the rest of us on how to characterize the war,” Yellen said, but stressed the disagreement should not prevent progress on pressing global issues.
Russia’s finance minister attended the meeting virtually while his deputy attended in person. Ukraine’s finance minister addressed the session virtually where he called for “more severe targeted sanctions”.
Indonesia’s Sri Mulyani said 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 she called for removal of trade protections that prevented flow of food supplies.
The G20 will set up a joint forum between finance and agriculture ministers to address food and fertilize supply issue. A similar forum has been set up for finance and health ministers for pandemic preparedness.
Analysts said the failure to agree on a communique reflected the weakness of the once-mighty economic grouping.
G20 members pulled together at the start of the pandemic, but initiatives to cushion the shock for heavily indebted poor countries failed to produce significant results.
Western countries, concerned about the lack of transparency in China’s lending, were pressuring Beijing to restructure debt contracts and transform its role to “one that (contributes) to the country rather than to one of indebtedness and servitude,” said US Ambassador to Japan Rahm Emanuel. But they were frustrated that Chinese officials did not attend the meetings in person, making sideline discussions impossible.
Kristalina Georgieva, head of the International Monetary Fund, warned more than 30% of emerging and developing countries - and a staggering 60% of low-income countries - were in or near debt distress.
“The debt situation is deteriorating fast and a well-functioning mechanism for debt resolution should be in place,” she said.