Finance ministers and central bank governors of the Group of Twenty ended their meetings in India on Saturday without reaching a joint statement, due to differences with China over the war in Ukraine and ways to alleviate the debt burden of troubled developing countries.
India, which chairs the Group of Twenty, published, on Saturday, a “summary” of the discussions that took place between the G20 finance ministers and central bank governors at the conclusion of the meetings, but without a joint statement.
The finance ministers and central bank governors gathered since Friday in India’s technological capital, Bangalore, had sought to agree on solutions to meet the challenges posed by the global economy, in the context of the war in Ukraine and high inflation.
Participants in the meeting of finance ministers and heads of central banks in countries G20 On Saturday, they reported the existence of differences between the financial leaders of the world’s largest economies regarding The war in Ukraine And ways to reduce the debt burden of poor countries.
The envoys pointed out that the United States and its allies in the Group of Seven major industrialized countries are insisting on demanding that the statement strongly condemn Russia for its invasion of its neighbor, which was opposed by the Russian and Chinese delegations.
Russia, a G20 member, describes its actions in Ukraine as a “special military operation” and avoids calling it an invasion or war.
Neutrality and abstention
G20 officials told Reuters that India was pushing to avoid using the word “war” to describe the conflict in any communiqué of the meeting. India, which holds the G20 presidency this year, has stuck to a largely neutral stance on the war, refraining from blaming Russia for the invasion, while seeking a diplomatic solution and boosting its purchases of Russian oil.
Envoys said the meeting, hosted by India, would conclude later in the day, likely without issuing a joint statement, given the lack of consensus on the characterization of the conflict in Ukraine.
India and China were among the countries that abstained on Thursday, when the United Nations overwhelmingly agreed to demand that Moscow withdraw its forces from Ukraine and stop the fighting.
The G20 includes the G7 countries in addition to Australia, Brazil, Saudi Arabia and others. A senior G20 source said negotiations over the statement had been difficult, with Russia and China blocking proposals from Western countries.
The source and several other officials indicated that a consensus on the statement is unlikely unless a last-minute surprise occurs, and it is likely that the meeting will conclude with a statement from the host country summarizing the discussions.
Disagreements about the debt of poor countries
The Director of the International Monetary Fund, Kristalina Georgieva, said that the fund held a meeting on the sidelines of the G20 meeting on Saturday with the World Bank, China, India, Saudi Arabia and the Group of Seven regarding restructuring the debts of troubled economies, but there were differences between the parties.
“We just finished a session in which it was clear that there was a commitment to building bridges for the benefit of countries,” Georgieva told reporters after the meeting, which she co-chaired with India’s Finance Minister Nirmala Sitharaman. Pressure is mounting on China, the world’s largest bilateral creditor, and other countries to offer a significant cut in loans to problem developing countries.
In a video address to the G20 meeting on Friday, Chinese Finance Minister Liu Kun reaffirmed Beijing’s position that the World Bank and other multilateral development banks should participate in debt relief by taking debt reduction measures alongside bilateral creditors.
US Treasury Secretary Janet Yellen said ahead of the debt meeting that she would press all bilateral creditors, including China, to engage in meaningful discussions, adding that addressing Zambia’s debt and ensuring funds for Sri Lanka were the “most pressing” issues.
Zambia owes Beijing about $6 billion of a total external debt of $17 billion through the end of 2021, according to government data. Ghana owes China about $1.7 billion, according to the Institute of International Finance, a financial services trade association focused on emerging markets.