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BALI (Reuters) – Major G20 investors kicked off a meeting in Indonesia on Friday that is likely to be dominated by the repercussions of Russia’s invasion of Ukraine on the global economy as inflation rises and growth prospects dim.

“The world is watching us,” Sri Mulyani Indrawati, finance minister of host country Indonesia, said at the opening. “The actions we take will have a very significant effect on every nation in the world.”

The two-day meeting of finance ministers and central bank governors is being held on the Indonesian island of Bali, a week after foreign ministers sent a series of accusations about the invasion of Ukraine from Russian diplomat Sergei Lavrov.

Discussions were initially expected to focus on how best to encourage a return to growth after the coronavirus pandemic, but it is the impact of the war in Ukraine, with the food and energy crises, that is now high on the agenda.

“We are very aware that the price of not agreeing is higher than we can pay,” warned the Indonesian minister. “The humanitarian consequences for many low-income countries would be catastrophic.”

On the eve of the meeting, US Treasury Secretary Janet Yellen felt that “the biggest challenge” for the global economy came from the war in Ukraine, stressing that “representatives of the Putin regime should not have a place in this forum”.

“We are seeing the consequences of this war in every corner of the world, especially in energy prices and increasing food insecurity,” she noted.

The talks are expected to reflect a dividing line between Westerners who want to isolate Moscow economically and major developing countries who oppose sanctions on Russia, with China in a key position.

Russian Finance Minister Anton Silouanov is expected to attend the meeting virtually, while his Ukrainian counterpart Sergei Marchenko was also invited to speak online.

Janet Yellen had participated in a boycott of the G20 meeting in April, when Russian officials spoke in Washington. The meeting ended without a final statement.

In the absence of consensus among countries on the causes of the current economic problems, and Russia’s responsibility, the publication of a press release is again uncertain.

“It’s a G20 that engages in a very specific context,” a French finance ministry source said ahead of the meeting. “This context creates risks for poor and emerging countries, linked to the normalization of monetary policies and the risk of credit crunch.”

many absent

Indonesia, the host country of the G20 this year, wanted to remain neutral and did not give in to Western pressure to keep Russia out of the meetings.

If finance ministers from Italy, Canada, India or South Africa in particular traveled, many countries sent lower-level representatives. France is represented by the Director General of the Treasury and the Governor of the Banque de France.

European Central Bank (ECB) President Christine Lagarde will attend remotely, as will Chinese and Brazilian ministers, while World Bank President David Malpass will be absent.

International Monetary Fund Managing Director Kristalina Georgieva, who warned on Wednesday of a “darkening” global economic outlook, is expected to attend in person.

Big fundraisers must discuss solutions to alleviate the impact of inflation and the food and energy crises in the most fragile countries.

Financial inclusion and global tax reform must also be on the menu.

The Organization for Economic Co-operation and Development (OECD) must present a progress report on global tax reform, with a minimum tax rate of at least 15% on multinational profits. Its implementation was postponed to 2024, compared to mid-2023 initially planned.

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