G20 finance chiefs make few policy breakthroughs at Indonesia meeting

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

Amid growing doubts about the G20’s effectiveness in addressing major global issues, US Treasury Secretary Janet Yellen said the differences had prevented finance ministers and central bankers from issue an official statement, but that the group had a “strong consensus” on the need to address a worsening food security crisis.

Host Indonesia will issue a statement from the President instead. Finance Minister Sri Mulyani Indrawati said most of the topics were agreed by all members except for particular statements on the war in Ukraine. She described it as the “best result” the group could have achieved in 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 G20 countries, including China, India and South Africa, have been more muted in their response.

“It’s a difficult time because Russia is part of the G20 and doesn’t agree with us on how to characterize the war,” Yellen said, but stressed that 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 “tougher targeted sanctions”.

Indonesian Sri Mulyani said the presidency of a fractured G20 had been “quite overwhelming” due to the war in Ukraine, all members agreed that food insecurity needed special attention and she called for the removal of trade protections that impeded the movement of food supplies.

The G20 will set up a joint forum between finance and agriculture ministers to address the issue of food and fertilizer supply. A similar forum has been set up for finance and health ministers for pandemic preparedness.

Analysts said the failure to agree on a statement reflected weakness in the once powerful economic grouping.

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

G20 members united at the start of the pandemic, but initiatives to cushion the blow for heavily indebted poor countries have failed to yield significant results.

Western countries, concerned about the lack of transparency in China’s loans, were pressuring Beijing to restructure debt contracts and transform its role into “a role that (contributes) to the country rather than a role of ‘indebtedness and bondage,’ US Ambassador to Japan Rahm said. Immanuel. But they were frustrated that Chinese officials did not attend the meetings in person, making side talks impossible.

Kristalina Georgieva, director of the International Monetary Fund, warned that more than 30% of emerging and developing countries – and 60% of low-income countries – were in debt distress or close to debt distress. Read more

“The debt situation is rapidly deteriorating and an effective debt resolution mechanism should be in place,” she said.

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

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

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Additional reporting by Stefanno Sulaiman in Nusa Dua and Leigh Thomas in Paris; Editing by William Mallard, Kanupriya Kapoor, Tom Hogue and William Mallard

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