G20 Meeting: Finance ministers end meet without consensus on Ukraine war, decision likely in September summit

The third meeting of G20 Finance Ministers and Central Bank Governors (FMCBG) in Gujarat's Gandhinagar ended on Tuesday without a consensus on the “language” of a communique regarding the Russia-Ukraine conflict. 

However, it did manage to make good developments in addressing debt vulnerabilities and strengthening Multilateral Development Bank (MDB). 

Following the two days of talks, which started on Monday, there was no final communiqué on the Ukraine issue. India, as the host nation, was forced to issue the G20 Chair’s summary and an outcome document. 

“We still don’t have a common language on the Russia-Ukraine war. So, it must be left to the leaders during the (G20 Leaders’) Summit in September to take a call on that. We did not think it was right for us to change it,” Finance Minister Nirmala Sitharaman told reporters after the two-day meeting ended in Gandhinagar.  

According to the chair summary issued by India, China and Russia objected to paragraphs referring to the war which said it was causing “immense human suffering” and “exacerbating existing fragilities in the global economy”.  

As host, India has been unable to find a consensus with some of the participating countries insisting that the Ukraine conflict be called “war” and mentioned as such in the final communique. 

“Everyone had an agreement on issues, but needed more time on what language to be used,” Sitharaman added. 

 

Here are the top points mentioned in the chair summary 

1. Most G20 members 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. 

2. The countries agreed that it is essential to uphold international law and the multilateral system that safeguards peace and stability. 

3. The countries concluded that global economic growth is below its long-run average and remains uneven. The uncertainty around the outlook remains high. With notable tightening in global financial conditions, which could worsen debt vulnerabilities, persistent inflation and geoeconomic tensions, the balance of risks remains tilted to the downside. 

4. The countries agreed to enhance macro policy cooperation and support the progress towards the 2030 Agenda for Sustainable Development. The members reaffirmed that achieving SSBIG will require policymakers to stay agile and flexible in their policy response, as evidenced during the recent banking turbulence in a few advanced economies where expeditious action by relevant authorities helped to maintain financial stability and manage spillovers. 

5. Members also raised Russia's move to halt the deal that allowed grain to flow from Ukraine via the Black Sea to parts of Africa, the Middle East and Asia where high food prices have pushed more people into poverty. 

6. The members welcomed the G20 Report on Macroeconomic Impacts of Food and Energy Insecurity and their Implications for the Global Economy, which was supported by analysis from the IMF, WBG, IEA and FAO. 

Multilateral Development Banks reforms 

According to the chair summary, the countries agreed to be committed to pursuing ambitious efforts to evolve and strengthen Multilateral Development Banks (MDBs) to address the global challenges of the 21st century with a continued focus on addressing the development needs of low- and middle-income countries. 

This has been regarded as a major achievement, though it added that there will be more clarity on capital infusion once the roadmap for reforms would be ready in October. 

N K Singh, the co-chair of the independent G20 expert group on Multilateral Development Banks reforms, said early initiation of capital increase of MDBs would send the right signal to credit rating agencies, the market, and other stakeholders. 

The group, co-chaired by former US Treasury Secretary Larry Summers, has backed tripling sustainable lending levels of MDBs by 2030 to $300 billion per year. 

Singh said the first part of the report, given to finance ministers on Monday, was welcomed by all countries.

The group will give the second part of the report on October 13 to G20 finance ministers at their next and last meeting under the Indian presidency. 

Since assuming the presidency of the G20 this year, India has been stressing the member countries to reach a consensus on issues of particular concern to poorer countries, like debt distress, inflation, and the threat of climate change. 

Also read: Tata all set to announce new EV battery plant in UK for JLR cars: Report

Also read: Monsoon session 2023 to begin from July 20; UCC, Digital Personal Data Protection Bill likely to be tabled, Oppn to rake up Manipur crisis