There is no complete consensus; Food security, inflation and the Ukraine war agenda

Indonesia’s Finance Minister Sri Mulyani Indrawati delivers a speech during the opening of the G20 Finance Ministers and Central Bank Governors meeting in Nusa Dua, on the Indonesian resort island of Bali, on July 15, 2022.

Made by Naji | AFP | Getty Images

Bali, Indonesia – Finance chiefs at the G20 meeting in Bali “strongly” condemned the war in Ukraine and expressed concern over “an alarming increase in food and energy insecurity”.

That’s according to a statement issued by Indonesia, which hosts the G20 on Sunday.

The group, which met for two days in the resort island of Bali, was unable to reach consensus on several issues and did not issue a joint statement. The previous meeting of G20 financial leaders in Washington in April also ended without a joint statement being issued.

Instead, a statement issued by Bank Indonesia on Sunday summarized the main discussion points of several rounds of meetings held in private. In particular, the group’s finance chiefs and central bank leaders pledged to fight food insecurity and price hikes that continue to “disproportionately” affect vulnerable countries.

“Many members agreed that the recovery of the global economy has slowed down and is facing a major setback as a result of the Russian war against Ukraine, which was strongly condemned, and they called for an end to the war,” the Indonesian center said in a statement. said the bank.

Many members are willing to take immediate collective action on food security, including by working with other initiatives.

Bank of Indonesia

G20 host

“Members noted that existing challenges had exacerbated, including supply-demand mismatch, supply disruption, and increased commodity and energy prices, adding to rising inflationary pressures and contributing to increased food insecurity risks.”

“Many members noted the importance of continued work on climate change, as well as on addressing debt vulnerabilities,” she added.

All members of the meeting – which included Russia and Ukraine by default – pledged to use all available policy tools to tackle the food crisis. However, there was no indication that commitments had been made to ensure that future sanctions against Russia involving food and key supplies would be avoided.

The volatility of supply chains during the pandemic – now exacerbated by the Russia-Ukraine crisis – has delayed and curtailed the delivery of food, fertilizer and fuel to many parts of the world including countries in Africa and the Middle East.

“Many members are ready to take immediate collective action on food security, including by working with other initiatives,” the statement said.

In general, all the central banks of the Group of Twenty agreed to tackle inflation and calibrate monetary policies that would rein in high prices.

From climate change to cryptocurrency

Central bank chiefs and finance ministers also reaffirmed their commitment to bring the COVID-19 pandemic under control.

“We welcome the establishment of a Financial Intermediate Fund (FIF) for epidemic prevention, preparedness and response as developed by the Joint Group of Twenty between the Financial and Health Task Force and hosted by the World Bank,” Indonesia’s statement said.

The International Finance Fund – voluntarily funded by members – will ensure adequate, sustainable and better coordinated financing of pandemic responses.

Climate change was discussed and members pledged to meet their COP26 commitments to reach carbon neutrality and net zero targets.

The group promised to phase out and rationalize “inefficient fossil fuel subsidies that encourage wasteful consumption” in the medium term.

“We continue to recall and reaffirm the commitment made by developed countries to the goal of jointly mobilizing climate finance of $100 billion annually by 2020 and annually through 2025 to meet the needs of developing countries, in the context of targeted mitigation actions,” the statement said.

The group acknowledged progress in the use of digitization in financial transactions worldwide and agreed to intensify efforts to combat money laundering and terrorist financing.

“We welcome ongoing discussions about central bank digital currencies as they may be designed to facilitate cross-border payments while maintaining the stability of the international monetary and financial system,” the statement said.

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