A group of 20 finance ministers and central bank governors from leading economies will meet in Indonesia on Friday to discuss the fallout from Russia’s invasion of Ukraine, which has roiled markets, pushed up food prices and fueled breakneck inflation.
The two-day meeting comes on the resort island of Bali in the shadow of war, a week after the forum’s foreign ministers visited Moscow’s top diplomat, prompting him to walk out of the talks.
Global finance leaders, including US Treasury Secretary Janet Yellen, will discuss the recovery from the coronavirus pandemic. But the fallout from the Ukraine war – weighing on an already brittle global recovery – will now be high on the agenda.
A day before the meeting, Yellen set the tone by calling Russia’s war in Ukraine the “biggest challenge” facing the global economy and saying members of the Putin government have “no place” at the talks.
“We are seeing negative spillovers from this war in all parts of the world, particularly in relation to higher energy prices and increasing food insecurity,” she said.
Yellen is expected to urge G20 allies to put a price cap on Russian oil to choke off President Vladimir Putin’s war chest and pressure Moscow to end its invasion while cutting energy costs.
The talks will also reveal any divisions among the world’s leading economies over Moscow’s unilateral offensive, but Russian Foreign Minister Sergei Lavrov found himself vastly outnumbered at last week’s gathering.
Russian Finance Minister Anton Siluanov will only attend the ministerial meeting virtually, according to official sources, while Ukraine’s Finance Minister Serhiy Marchenko will address ministers virtually at the start of talks on Friday.
Yellen led a multinational strike by finance officials in April as Russian delegates spoke at a G20 meeting in Washington. No communiqué was issued at the end of this meeting.
It’s unclear whether a similar strike will take place at that meeting after no foreign minister left last week, but Yellen would not be involved if they repeated their joint action on Friday.
A final communiqué is also unlikely to be issued after talks conclude on Saturday, as disagreements over Russia are at the root of the current global economic headwinds.
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G20 leader Indonesia – which pursues a neutral foreign policy – has refrained from inviting Russia, despite Western pressure.
Finance ministers of Italy and Canada will be in attendance, but Chinese finance minister Liu Kun will only attend virtually, according to Indonesian state media, as will Britain’s new finance minister, Nadhim Zahawi.
International Monetary Fund chief Kristalina Georgieva will appear in person after saying on Wednesday the global economic outlook had “deteriorated significantly” because of the Moscow invasion.
European Central Bank President Christine Lagarde will attend 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, which was set to focus on the global recovery from the Covid-19 pandemic.
But attention has shifted to Moscow’s brutal campaign in Ukraine after it blockaded the ports of one of the world’s top food producers.
Finance chiefs are expected to discuss how to mitigate the impact on poorer nations, which will suffer supply shortages as a result of the war.
Other issues to be addressed by ministers include digital financial inclusion – with more than a billion people around the world still without access to a bank account – and the deadline for an overhaul of international tax rules.
The Organization for Economic Co-operation and Development (OECD) will provide ministers with an update on progress on 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 passing the laws underpinning the new rules – which also aim to redirect a quarter of large multinationals’ profits to the countries where their customers are based – has been set for mid-2023, according to the OECD.
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