Treasurer Jim Chalmers attended the G20 finance summit in Indonesia for crucial talks with finance ministers and central bankers.
Lead up to the G20 finance summit
Dr Chalmers attended the two-day finance ministers and central bank governors’ summit in Bali alongside Reserve Bank of Australia head Philip Lowe.
Soaring global inflation and the economic outlook dominated conversations, as well as the Ukraine war.
The Treasurer stated that the meeting of finance ministers came at a critical time.
While tensions over the Russian invasion of Ukraine have dominated prior discussions, Russia’s finance minister will address the summit remotely and send his deputy in person.
Ukraine’s finance minister was invited to the G20 summit and will give a virtual address.
When the G20 finance ministers last conversed in Washington in April, no directive was issued, and officials from some western nations left the room when Russia spoke.
The International Monetary Fund pronounced in a blog post ahead of this meeting that the global economic outlook had “darkened significantly” since April.
Dr Chalmers said he would hold constructive discussions with regional neighbours and other G20 economies.
Prime Minister Anthony Albanese will attend the November G20 leaders’ summit in Bali.
G20 finance summit outcomes
The G20 Finance Ministers and the Central Bank Governors congregated in Bali on 15-16 July 2022, the third occurrence under the Indonesian G20 Presidency. The meeting comprised G20 members, invited countries (including Ukraine), and international and regional organizations.
Many members agreed recovery of the global economy has slowed. In addition, it is facing a significant setback due to Russia ́s war against Ukraine. The summit called a cease to the war. One member conveyed the view that the sanctions are adding to existing challenges.
Members noted that existing challenges had been exacerbated, including supply-demand mismatches, disruptions, and increased commodity and energy prices. These have added to rising inflationary pressures and contributed to the increased risk of food insecurity.
Many members mentioned the importance of continued action on climate change and addressing debt vulnerabilities. In addition, some members welcomed the G20 Presidency Note on Policy Setting for Exit Strategies to Support Recovery and to address the Scarring Effect to Secure Future Growth.
Many members agreed that there is an alarming increase in food and energy insecurity, which are felt inordinately by vulnerable groups. Some also conveyed concerns regarding fertiliser availability, which could further exacerbate the food crisis. Members affirmed their commitment to using all available policy tools to confront current economic and financial obstacles, comprising the risk of food insecurity.
Many members stand prepared to take prompt collective actions on food security, including by cooperating with other initiatives. Members supported multilateral initiatives. Some members appealed to international financial institutions to implement their Action Plan to Address Food Insecurity commitments.
Members also welcomed the High-Level Seminar on Strengthening Global Collaboration for Tackling Food Insecurity. Members concurred to preserve financial stability and long-term fiscal sustainability.
Call to end the ban on Aussie goods to China
Chalmers called for change from China at the G20 finance summit in Bali.
It should extend to the restrictions placed on some of our other exports in the interests of our employers and our exporters in Australia.
Overturning the coal ban will be focused on helping heal China’s economy rather than its relationship with Australia.
“I think if we misread it and see it as some kind of olive branch to Canberra, we’re making a fundamental error,” said Chris Richardson from Deloitte Access Economics.
Finance ministers and central bank executives from 20 major economies, including Australia, underwent crucial discussions talks on the global cost of living crisis, which ended in a stalemate.
Divisions overshadowed discussions over the war in Ukraine.
The war in Ukraine
Indonesia impelled G20 finance leaders to stay focused on global economic recovery. Still, their meeting in Bali ended without a joint communique as Russia’s war in Ukraine continues to divide the group.
Chalmers expressed that frustration is rife in the international community, primarily because of the human cost of this illegal, immoral, unjustified invasion of Ukraine.
It’s also because of the substantial economic cost.
“It’s the biggest bit of bad news for the world economy, for the Australian economy,” said the Australian Strategic Policy Institute’s Michael Shoebridge.
“It’s pushed fuel prices up. It’s pushed food prices up.”
Richardson said no one could argue that Russian President Vladimir Putin’s war in Ukraine was not the fundamental cause of the inflationary spiral.
Attendees failed to devise a joint proclamation with Moscow present.
Richardson described the situation as being a bit like you’re having a neighbourhood watch meeting about burglaries in your suburb. You have got the burglar there, so you’re not going to agree that you should call the police.
Russia disagrees with the Western nations
Initially, senior Western officials concurred that Russia was at fault for the economic repercussions generated by the war.
During bilateral meetings with senior officials from Saudi Arabia, Australia, South Africa, and Singapore, Yellen voiced that it was Russia’s “unprovoked war against Ukraine, which has caused global spillovers in food, energy, and other commodities.”
She encouraged other nations to back a price cap on Russian oil to limit revenue flow to its military.
Serhiy Marchenko, Ukraine’s finance minister, addressed the G20 meeting virtually and called for more severe sanctions against Russia.
Most G20 members, including most Western countries, have imposed sanctions on Russia. However, some member nations, including China, India, and South Africa, have been more subdued in their responses.
Russian Finance Minister Anton Siluanov also participated virtually in the meeting. The Kremlin blames the Western sanctions for blocked food shipments and rising energy prices.
Showdown at the G20 finance summit
The meetings of finance and foreign ministers last week set some preliminaries for the G20 heads of state and government summit occurring in November in Bali.
Putin plans to take part despite the objection of Western nation members, including US President Joe Biden.
Following a G7 meeting in Germany in June, Chancellor Olaf Scholz stated that G7 leaders would participate in the G20 summit in November regardless of Putin’s presence as he does not want to drive the G20 apart.
President Volodymyr Zelensky is invited, despite Ukraine not being a G20 country. He has expressed that he would attend if the security situation in his country allowed it.
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