G-20 Finance Meet Ends Without a Communique But Progress on Food

(Bloomberg) --

Division over Russia’s war with Ukraine meant a meeting of Group of 20 finance chiefs ended without the usual communique, though there was incremental progress on issues such as food and energy security.

While countries agreed on most of a briefer chair summary released by host nation Indonesia, which included the need to respond to the food and fuel crisis, disagreement over the root cause prevented them for a second time this year from issuing a communique. The war in Ukraine is “an issue they cannot reconcile yet,” said Finance Minister Sri Mulyani Indrawati.

Focus turned instead at the meetings in Bali, Indonesia, to avenues for supporting the most vulnerable -- including through bolstering food security and raising alarm over sovereign default risks. The G-20 is considering setting up a fund similar to one for the global health crisis, which received additional pledges to reach $1.28 billion in size. The gathering also saw progress in discussions on the debt treatment for Chad and Ethiopia.

“So these are some of the very concrete results,” Indrawati said at a press briefing after the meetings ended. “With all G-20 member countries, we agree that we need to continue to defend and maintain this G-20 as a global economic cooperation forum.”

An oil-price cap initiative to mitigate global inflation while punishing Russia over what she calls “horrific consequences” of the war in Ukraine has been high on the agenda for US Treasury Secretary Janet Yellen, but a non-starter for others like China and India. Indrawati said she will discuss the proposal with Indonesia’s energy-related ministries.

Treasury said in a statement Yellen held a number of bilateral meetings including sessions with Saudi Arabia’s Finance Minister Mohammed Al-Jadaan, Australian Treasurer Jim Chalmers, South African Minister of Finance Enoch Godongwana and Singapore’s Deputy Prime Minister Lawrence Wong. The statement didn’t include details with how ministers responded to Yellen’s appeal on the oil price cap. 

In the official sessions, all country representatives reportedly remained in the room when Russian officials spoke on the first day, in contrast to an earlier G-20 gathering that featured a US-led walkout.

Developments overnight in Washington provided a hurdle to Yellen’s push on a second priority -- securing more momentum for a global tax deal that last year brought together almost 140 countries to establish a 15% global corporate tax minimum rate. Many participants in the negotiation have met political challenges in implementation, most notably the US Congress, where a member of the president’s own party has now delayed a crucial vote.

Other developments reached from the meetings:

• Warjiyo highlighted areas of progress, including the Financial Stability Board’s work toward setting a roadmap for climate risks
• Indonesia kicked off the Energy Transition Mechanism as a model for “just, affordable” way for developing countries to wean themselves off of coal
• An FSB statement this week sets out how crypto assets, including stablecoins, could pose a threat to global financial stability. The recent crash in the value of stablecoins such as Terra have led global regulators to call for more oversight to keep the meltdown from contaminating other assets. The FSB will issue global rules for crypto in October

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