G-20 finance meeting ends without joint statement again
Finance Ministers from the Group of 20 economies wrapped up their two-day meeting on Thursday, but again failed to issue a joint statement apparently due to clear disagreements over Ukraine conflict, posing a threat to efforts to strengthen coordination amid slow growth, debt distress and banking concerns.
Indian Finance Minister Nirmala Sitharaman, who co-hosted the meeting, said they discussed issues including the current status of the world economy and how to strengthen the international financial architecture.
Sitharaman said challenges posed by crypto assets were also addressed and there was a “greater acceptance” that any action on them has to be coordinated globally, rather than each country dealing independently.
She told a press conference their discussions were “very intense” and India, this year’s chair of the group of major economies, was happy to hear many “substantive inputs.”
Still, there was not even the issuance of a chair’s statement, at a time when the G-20 is facing a test of its relevance and effectiveness as a multilateral framework to cope with crises.
The G-20 meeting was held on the fringes of gatherings hosted by the International Monetary Fund and the World Bank in Washington.
All members of the group have criticized Moscow for invading its neighbor, except China and Russia, a deep gulf highlighted in the previous finance chiefs’ meeting in February.
Since then, fears about the health of the banking sector have gripped financial markets and uncertainty has grown about the pace of aggressive rate hikes by central banks in major economies.
The IMF this week cut its global growth forecast for 2023 to 2.8 percent from 2.9 percent three months ago.
The development comes as the U.S. Federal Reserve and other major central banks have been raising interest rates to tame inflation, benefiting their currencies, such as the U.S. dollar.
Higher rates and a strong dollar, however, make it difficult for mid- and low-income nations that have taken on huge debts to repay them in dollars. Weaker currencies have boosted import costs of energy and raw materials for such nations.
In the previous meeting, the G-20 finance chiefs called for “well-calibrated” monetary, fiscal and other policies to promote growth and ensure financial stability.
Sri Lanka is among the nations whose debt vulnerabilities have been exposed, prompting the IMF to approve a $3 billion loan. Its major creditors — China, France, India and Japan — are part of the G-20.
The financial aid came after China, which had shown reluctance, decided to support Sri Lanka’s debt restructuring.
Japanese Finance Minister Shunichi Suzuki, who is in Washington with the new Bank of Japan Governor Kazuo Ueda, has called for more accuracy and transparency in debt data to prevent future crises, apparently in view of China’s lending practices which have been criticized as opaque.
“We expect this exercise of sharing data to be an established practice and to be widely spread among more creditor countries,” he told a meeting of the IMF and World Bank on Wednesday.
The G-20 includes Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey. Along with the Group of Seven nations – Britain, Canada, France, Germany, Italy, Japan and the United States plus the European Union.
A point to consider now is that combined GDP of BRICS nations has now crossed the Combined GDP of G7 nations. So too many disagreements may just see a major split in G20.
