Ukraine war is exacerbating fragilities in the global economy: G20 Ministers

An ‘Outcome Document’ released at the end of the meeting also hinted at differences of opinion among the G20 members

Union Finance Minister Nirmala Sitharaman addresses a media briefing after the first G20 Finance Ministers and Central Bank Governors meeting in Bengaluru on February 25, 2023. YouTube/@g20orgindia

 At a meeting of G20 Finance Ministers and Central Bank Governors (FMCBG) on Saturday in Bengaluru, most members called for a “complete and unconditional withdrawal” of the Russian forces from Ukrainian territory.

An ‘Outcome Document’ released at the end of the meeting also hinted at differences of opinion among the G20 members.

“Most members strongly condemned the war in Ukraine and stressed that it is causing immense human suffering and exacerbating existing fragilities in the global economy — constraining growth, increasing inflation, disrupting supply chains, heightening energy and food insecurity, and elevating financial stability risks,” the Outcome Document stated.

Impact of sanctions

A section of the members also raised the impact of the anti-Russia sanctions.

The Hindu had reported earlier that the Indian side was expected to highlight mainly economic and developmental issues that are vital for the Global South but the Outcome Document stated clearly that “Recognising that that the G20 is not the forum to resolve security issues, we acknowledge that security issues can have significant consequences for the global economy.”

The apparent difference in opinion is significant as the FMCBG is the first ministerial under Indian Presidency of G20 and gives a sense of the mood among member countries ahead of the Foreign Ministers Meeting to be held on March 1-2.

The document came out strongly in support of international law and the U.N. reiterated the comment that Prime Minister Narendra Modi had made at last year’s Shanghai Cooperation Organisation (SCO) summit at Samarkand that “Today’s era must not be of war.”

The group also called for strengthening of the Financial Action Task Force (FATF) and FATF Style Regional Bodies (FSRBs) to ensure continued crackdown on money laundering and terrorism.

The Outcome Document also called to address “debt vulnerabilities in low and middle-income countries” saying, “We welcome the conclusion of debt treatment for Chad and call for a swift conclusion of the work on debt treatment for Zambia and Ethiopia. We also look forward to the rapid formation of the official creditor committee for Ghana to work on the requested debt treatment. Further, we look forward to a swift resolution to Sri Lanka’s debt situation. We task the International Financial Architecture Working Group to develop a G20 Note on the Global Debt Landscape in a fair and comprehensive manner.”